Is Pet Insurance Worth It? Here’s What California Pet Owners Think
The soaring cost of veterinary care has led to increased interest in pet insurance. In California, the birthplace of the first pet insurance policy in 1982, the market is booming.
Veterinary costs have increased significantly over the past decade. According to a New York Times analysis of data from the Bureau of Labor Statistics, prices increased by more than 60% between 2014 and 2024, which is roughly double overall price increases. As a result, the price of pet insurance has also increased.
Recent changes in California law are aimed at regulating the pet insurance industry, with new requirements for transparency regarding coverage, deductibles, policy limits, and claim payment determination.
Pet insurance functions differently from human health insurance. It is common for pet insurers to decline coverage for pre-existing conditions, and premium prices can be increased without explanation. Moreover, pet insurers may choose not to renew policies, and most plans require full payment at the time of service followed by reimbursement.
What Pet Owners Say
Many pet owners have shared their experiences with pet insurance. Positive experiences include sizable and timely reimbursements for significant expenses like orthopedic surgeries and cancer treatments. One reader, Anne, felt confident about pursuing all available treatments when her dog developed cancer, knowing 90% of the bills would be covered. Another reader, Patricia, had her policy cover 90% of the costs for X-rays and exams after her cat ate one of its toys, following her deductible.
However, not all experiences are positive. Some pet owners have expressed frustration about having to pay large bills upfront. Others described substantial premium increases as their pets aged. A reader named Frank shared that the renewal of his French bulldog’s policy was approximately a $4,000 annual expense, significantly higher than the initial cost. Multiple people raised concerns about customer service, including a case where a pet insurer demanded remaining payments after a puppy died unexpectedly.
Understanding Pet Insurance Costs and Coverage
Despite the potential benefits, pet insurance isn’t always a straightforward financial decision. The North American Pet Health Insurance Association (NAPHIA), reports that most pet insurance prices have increased over the last five years. The average annual premium cost per insured dog for a policy in 2019 was about $970, and $532 per insured cat. By 2023, those averages had risen to $1,264 for a dog and $626 for a cat.
Several factors influence the cost of a pet insurance policy, including:
- Type and Breed: Dogs generally cost more to insure than cats, and certain breeds are more prone to specific health issues. Rottweilers, French bulldogs, boxers, and other breeds tend to have the highest insurance costs.
- Age: Older pets are more expensive to insure because they are at higher risk of developing health problems.
- Preexisting Conditions: Pet insurers can refuse to cover pre-existing conditions. However, California law mandates that if a policy covers a condition, it must continue to cover that condition upon renewal.
- Coverage Type: Comprehensive policies that cover accidents, illnesses, and routine care are the most expensive. Other options include policies that cover accidents and illnesses or only accidents. Wellness programs, which typically cover preventative care, can no longer be marketed as pet insurance.
- Location: Veterinary costs in urban areas tend to be higher.
NAPHIA data from 2023 shows that the most frequently filed types of claims are for gastrointestinal issues, infections, skin conditions, anxiety and behavioral conditions, arthritis, cruciate ligament issues, diabetes, hyperthyroidism, limping, dental diseases, and allergies.
Is Pet Insurance Right for You?
Roughly half of all pet owners never take their pet to the vet, according to Kristen Lynch, NAPHIA’s executive director. In that case, pet insurance is probably not worth it. However, if you plan to use insurance, evaluating affordability and policy features is an essential step.
Lynch recommends comparing pet insurance to home insurance; coverage is there if it’s needed, but no one wants to think about using it. When considering a policy, it’s essential to examine financial factors beyond premiums. These include deductibles, coverage limits for specific conditions, and annual or lifetime maximums. An alternative to pet insurance is saving the equivalent of the monthly premium. However, if your pet requires extensive care, the financial consequences could be substantial.
Unlike car or home insurance, pet insurance isn’t mandatory. But if you are concerned about your ability to cover substantial veterinary expenses, exploring pet insurance options may offer peace of mind for you and your pet.
