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When is Pet Insurance It Worth the Investment?

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The decision to insure your furry loved one can be difficult and weighing the driving factors can be overwhelming. According to the 2019-2020 APPA National Pet Owners Survey, “67% of U.S. households own a pet, which equates to 84.9 million homes” and, “In 1988, the first year the survey was conducted, 56% of U.S. households owned a pet” 

Given the rise in household pet ownership, the rise in pet insurance investment is inevitable. Below is a graph that depicts spending on pets in the U.S. in 2019. The blue column represents “other services” which includes insurance and grooming amongst other services. Pet spending accounts for about $95.7 Billion in consumption in 2019. Due to this growing market demand, the economic factors driving high costs in the insurance market have caused hesitation for pet owners. 

Costs aside, there are many factors that go into the decision to insure a pet. Some of these factors include but are not limited to the type of animal, age, current/expected health, and life expectancy. In addition, there are various providers and plans to consider based on the coverage provided. Certainly, anticipation of standard procedures and check ups is far higher than the anticipation of emergencies. Unfortunately, the cost of emergencies can be much higher than a checkup. Mandy Walker of Consumer Reports found that, “You can

pick a plan that insures costs due to accidents (such as injuries caused by motor vehicles), or accidents and illness (including arthritis, cancer, and colitis). Some providers also offer wellness coverage for certain routine care, like annual exams, flea and tick treatments, and vaccinations” 

While determining to insure a pet is circumstantial and personal, the consensus is that investing in pet insurance is simply not worth it. Despite some growth in insurance demand, the overall percentage of pets insured is still low.Today’s Veterinarian Business had reported, “Nearly 2.2 million U.S. pets were covered by health insurance in 2018, an 18% jump from the prior year, according to a new study. The North American Pet Health Insurance Association’s 2019 State of the Industry report found that gross written premiums across the United States rose by 24% in 2018, to a total of $1.3 billion. Just over 1% of U.S. dogs and cats are insured. That number pales in comparison to the United Kingdom, where an estimated 25% of pets are covered, and Sweden, where the total is said to be as high as 40%.” The parallels between human health insurance coverage standards and pet insurance seem to hold true when comparing the U.S. and Europe.

Above is the monthly cost of insuring a male Labrador retriever, considered to be a fair indicator of potential costs. Given the average of 11 insurers, the yearly costs would sum up to $509.40. Assuming many healthy years and minimal vet visits, this may not be worth it but “Pet owners will probably incur at least one $2,000 to $4,000 bill for emergency pet care at some point during their pet’s lifetime, says Louise Murray, D.V.M., a veterinarian and vice president of the ASPCA’s Bergh Memorial Animal Hospital” 

With this information in mind, those with concerns or multiple pets may want to consider this investment. Many factors weigh into the decision and all are reasonable when investing in a loved one. 

Disclaimer: It is important that the purchaser of pet insurance does diligent research beyond the information I have provided above.

Also Read: Pet Insurance and Prescription Medication Coverage

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