Gina Papini isn’t sure if she got a raw deal with her pet insurance, but it’s clear she didn’t get her money’s worth.
Papini and her husband added coverage for their two dogs and cat in 2021, bundled with their home insurance. It seemed like an easy way to protect their pets’ wellbeing, but it became a headache. Premiums cost hundreds of dollars a month, and the coverage was less comprehensive than expected. The couple didn’t use the insurance much for their younger animals. However, when their older dog, Kato, needed vet care, the process became a hassle.
“We thought it would save us money in the long run,” Papini said, “but then they would refute claims and say, ‘Well, this could have been a preexisting condition,’ and preexisting conditions aren’t covered. You need extra vet paperwork to back up that it wasn’t. You just get to a point where you’re jumping through so many hoops.”
Papini and her husband ditched the plan after a year, having paid thousands in premiums without a single reimbursement.
People love their pets and will spend on them. The American Pet Products Association estimated that Americans spent $147 billion on their animals in 2023, including $38 billion on healthcare. This attachment has grown the pet insurance market. The North American Pet Health Insurance Association found that pet owners in the US paid $3.9 billion in premiums in 2023—a 22% increase from the previous year. In the US, about 6.25 million pets had insurance by the end of 2023, according to NAPHIA. That’s a small fraction of all pets in the country, with more than 80 million dogs and 60 million cats, according to the American Veterinary Medical Association. But it’s growing.
As pet insurance rises in use, so do the questions about it. Some people swear by it, others see it as a scam. One thing is certain: the industry is getting as confusing as human health insurance. It’s barely regulated, and figuring out what it covers can be baffling. Like human health insurance, pet coverage often has fine print and loopholes that allow insurers to deny claims. Consumers pay upfront, so they might not realize they won’t be reimbursed until it’s too late. Pet insurance also gets more expensive, meaning many can no longer afford their coverage.
In short, some do use their pet insurance benefits, but for many, insuring their pets is a money drain. Pet insurance isn’t technically health insurance; it’s in the property-and-casualty category and is lightly regulated. There aren’t broad federal regulations, and only a few states have specific laws. Typically, people pay a monthly premium, and after a vet visit, they submit the bill to the insurer for reimbursement. As with human insurance, there can be deductibles, copays, and annual limits.
“The big problem with pet insurance is it’s just an expensive product,” said Kevin Brasler, executive editor of Consumers’ Checkbook. There are three types of pet insurance: accident only, accident and illness, and accident, illness, and wellness. Adding more coverage costs more. Accident and accident-illness policies pay only if something goes wrong—a dog fight or arthritis. More comprehensive policies cover wellness visits and preventive care, such as dental care and vaccines. Premiums generally go up each year as a pet gets older. Also, premiums nationwide are rising because of inflation and the rising cost of care.
“The big problem with pet insurance is it’s just an expensive product.”
Even if an owner finds an affordable policy, understanding what’s covered may be hard. Pet insurance rarely covers preexisting conditions. Getting a policy for a young puppy may be a good deal. However, if a dog has diabetes, it’s a different story. When the fictional dog, Dan, was six months old, the platform Pawllicy suggested a policy starting at $28 a month. However, if Dan were 10 and had some health problems, the first policy suggested was $125, with some plans costing around $350.
Michael San Filippo, a spokesperson for the American Veterinary Medical Association, said that the group supports pet health insurance, which can help lower vet costs and save animal lives, but he acknowledged that it can be hard to figure out. “It’s important that pet owners understand the scope of what their pet insurance does and does not cover, so they’re not caught off guard by unexpected payments,” he said.
Getting advice on the right policy can be tough. Endless articles recommend various policies, and websites compare insurers. The sheer volume of information makes it hard to sort. It’s also hard to tell the difference between genuine advice and paid endorsements. Many comparison tools get commissions for platform sales, so what they recommend may not be the best, but it’s the one they’ll profit off the most. This practice is now common across all financial products, not just pet insurance.
This corporatization hurts the industry. Doug Kenney, a retired veterinarian who writes about the pet-insurance industry, said that a decade ago, most pet-insurance companies were small businesses led by founders with a vision. Over time, they took on corporate structures, and some founders were pushed out. Now there are many large pet-insurance companies, which may only specialize in pets. Some are larger insurers that offer pet insurance, and many are publicly traded.
“This new structure has been a detriment to the industry with profit as the primary motive versus what is in the best interest of the consumer,” Kenney said. “I used to say that pet insurance was a win, win, win proposition with the insurance company, veterinarians, and the policyholders and their pets all benefiting. I don’t think that’s the case anymore.”
Reporting this story, the author found no clear answer to whether pet insurance is good or bad. There was a wide array of experiences, from great to awful. For example, one woman saved $4,000 on vet bills after her cat ate a pom-pom, and the doctor had to remove it. Another man looked into coverage for his two cats with extra teeth, but once they were documented, they became a preexisting condition. One woman adopted a dog with a noticeable wonky leg. At the first appointment, the vet suggested applying for pet insurance, but they agreed not to note the leg on the chart so the application would be approved, which is likely a form of insurance fraud. It’s not likely to save money down the road, and if it does, the owner is an outlier. Pet insurance seems worthless for many consumers, with too many exceptions and hoops to jump through.
“You really need to think carefully about ‘What kind of pet owner am I?’ No judgments,” Brasler said. “This is a really expensive product. It’s not likely to save you money down the road, and if it does, you’re an outlier.”
Ultimately, the value is often emotional. Doing calculations to figure out the lifetime cost is possible, but the personal side involves how much you’re willing to spend. Some feel that spending $10,000 on insurance is worth the peace of mind. Others forgo insurance, figuring that if their pet has a health problem, they deal with it then.
Papini won’t be getting pet insurance again. It was too difficult, and her husband doesn’t like the experience. She can afford to pay out of pocket, but Kato now has cancer, with treatments costing thousands of dollars. Would insurance be worth it? “Who’s to say they wouldn’t have been like, ‘Well, he had diarrhea in 2017, so therefore it’s a preexisting condition,'” she said. “Then we would’ve spent thousands of dollars for the insurance, never been able to use it, and still had to pay out of pocket on top of it.”
