More than a dozen companies now offer pet health insurance, promising to provide affordable, lifelong medical coverage. But when we analyzed policies offered by 12 insurers, we found none of the plans was a good deal if our sample pets, like most, had a low or moderate level of health problems. That’s mostly because pet insurance is expensive: We found that, over their pets’ lifetimes, most families will spend thousands of dollars more for premiums, copays, and other out-of-pocket costs with insurance, compared to paying all vet costs on their own.
It was only when we assumed our sample dog or cat needed a high level of medical care that we broke even or benefitted from buying insurance—but only if we avoided purchasing coverage from one of several companies that charge high premiums and copays.
Before you buy, start by determining what you would do if your pet required expensive medical care. While many pet owners will pay anything to save their pets, others won’t. If you are in the latter group, pet insurance likely isn’t for you. If you belong to the pay-any-price camp, purchase insurance if hefty vet bills would strain your finances, but be careful about which company and plan you select (our evaluations and advice will steer you to the best).
A big reason pet insurance is a bad deal for most families is that while most plans seem affordable early on, when pets are young, four or five years later premiums begin creeping up—purely because our furry friends got older. Eventually, some pet insurance plans will charge more than $3,000 per year to cover a 12-year-old mixed-breed dog, and even more for many pure breeds. Unfortunately, some companies use misleading marketing to describe these price hikes, sticking their customers with sky-high premiums when their pets reach age 10 or older and when they need veterinary care the most.
More big gotchas: Most pet insurance plans won't cover preexisting conditions. If your pet has suffered from a chronic ailment or one that was expensive to treat and could happen again, don’t think that you can cut costs by buying insurance coverage.
To assess the true value of pet insurance, we gathered premium and other coverage info, obtained price data showing what veterinarians charge for scores of services, and interviewed executives from leading insurers. We worked with the Purdue University College of Veterinary Medicine to develop a reasonable set of vet services for our model pets, Woof, a medium-sized male mixed-breed dog; and Kitty, a male mixed-breed cat. We then conducted a cost/benefit analysis of each plan.