Is Pet Insurance Worth It?

Imagine the heartbreak of losing your beloved furry companion. Now, picture that grief compounded by the crushing weight of unexpected veterinary bills.

For one AAA member, this nightmare became a reality when the family’s beloved dog was diagnosed with heart disease.

The diagnosis took a huge emotional toll on the family. But, thanks to their AAA pet insurance, the financial burden didn’t overwhelm them.

With a minimal deductible and coinsurance, each treatment was more manageable. When the time came to say goodbye to their beloved pet, their plan covered the cost of euthanasia and cremation, offering peace of mind in their darkest moment. The insurance allowed the family to grieve without the weight of financial worry and focus instead on honoring the life of their loyal companion.

Pet insurance might seem like an unnecessary expense, but when unexpected veterinary bills start piling up, it can be a financial lifesaver.

While the American Veterinary Medical Association endorses pet health insurance to help cover veterinary care costs, deciding whether or not to purchase insurance remains a personal choice.

We spoke with Dan Scroggins, vice president and head of personal lines insurance sales at AAA Club Alliance, to help answer the question: Is pet insurance worth it?

Understanding the basics of pet insurance

Pet insurance covers most major and minor illnesses and injuries your pet might experience. Policies typically provide reimbursement for conditions such as broken bones, cancer treatments, and surgeries, which can quickly accumulate into thousands of dollars in medical bills.

“A typical pet insurance policy saves a pet parent hundreds, if not thousands, of dollars in out-of-pocket expenditures over the life of the policy,” Scroggins says.

One common misconception about pet insurance is that it’s too expensive. In reality, premiums are often more affordable than you might think. Some plans work out to as little as $10 per month and are based on factors such as pet age, breed, location, and the type of coverage chosen, according to the North American Pet Health Insurance Association.

The up-front cost can be well worth it, especially if you consider the potential savings on vet bills.

Scroggins advises being aware of any exclusions in the policy you’re weighing. Those might include preexisting conditions, vaccinations, spaying/neutering, and preventive care such as flea and tick treatments. Carefully reviewing your policy up front is critical in understanding what’s covered, and what’s not.

“Make sure you understand the coverages and limitations to a policy before you purchase,” Scroggins says. “There’s a correlation between what you pay for insurance and what it’s worth.”

The main difference between coverage tiers is the deductible (the amount you pay up front) and the coverage percentage (the portion the insurance company pays). 

“The higher coverage plans carry a slightly higher premium, but with significantly less out-of-pocket for the pet owner in the event of a claim,” Scroggins explains.

Weighing the benefits of pet insurance

Pet insurance costs vary widely. So, if you're wondering if pet insurance is worth it, the answer largely depends on your pet’s health, your financial situation, and your ability to manage unexpected veterinary costs. Other factors to weigh include your pet’s age, breed, and your location.

Scroggins shared these key points when deciding if pet insurance is right for you.

The benefits:

Financial peace of mind. The primary benefit of pet insurance is avoiding significant unplanned out-of-pocket expenses. Illnesses or injuries can occur unexpectedly, and treatment costs for such emergencies can add up quickly.

Comprehensive care. Higher-tier plans can cover a big portion of veterinary costs, allowing pet owners to choose the best possible care without worrying about the price tag.

Wide-ranging coverage. From minor injuries to major surgeries, pet insurance can cover a wide range of medical issues, ensuring your pet gets the necessary treatment.

The drawbacks:

• Policy limitations. No insurance policy covers every scenario. Exclusions may include certain conditions, treatments, or breed-specific issues.
• Up-front costs. While pet insurance can save money in the long run, the monthly premiums are an added expense that may not fit into everyone's budget.
• Breed restrictions. Most pet insurance is available only for dogs and cats, and some insurance carriers have breed limitations, especially for dangerous or rare breeds. Additionally, it can be harder to find coverage for other types of pets, such as birds, reptiles, and exotic animals.

Pet insurance isn’t a one-size-fits-all solution. Before purchasing a pet insurance policy, Scroggins recommends talking with a licensed AAA insurance agent to fully understand coverage details, exclusions, and costs. With the right policy, pet insurance could be one of the best investments you make for your furry family member’s health and well-being.