Pet Insurance: For Your Fur Buddy's Health and Your Peace of Mind
Mon, October 25, 2021

Pet Insurance: For Your Fur Buddy's Health and Your Peace of Mind


Sometime in 2014, Elizabeth Newsom-Stewart’s cat Fawkes ate a part of a lily plant leaf, narrated Mandy Walker of American non-profit organization Consumer Reports. Newsom-Stewart, then a veterinary student at Cornell University, rushed Fawkes to the hospital after realizing the predicament he was in. She noted that some lily plants are toxic to felines, causing kidney failure. She added that symptoms can take 12 to 24 hours to manifest and it’s almost always fatal when kidney failure occurs.

Emergency treatment, medication, tests, and IV fluids cost $1,783 then. However, Newsom-Steward purchased pet insurance three months prior, and it covered $1,327 of the bill. Thanks to Newsom-Steward's quick thinking and her pet insurance, Fawkes was treated in time and then fully recovered.

Generally, a pet’s serious illness or injury can cause financial shock to the owner. For example, cancer treatments can set you back $5,000. Pet insurance helps cover some of your pet’s medical bills, thereby not forcing you to consider “economic euthanasia” as a last resort.


Pet Insurance Market Statistics

The global insurance market was estimated to be $2.6 billion in 2016 and forecasted to grow at a CAGR of 11% during the forecast period, stated in “Pet Insurance Market: Global Demand Analysis & Opportunity Outlook 2024” via Research Nester, a strategic market research provider. Pet insurance is also projected to reach $5.7 billion by the end of 2024.



Majority of Americans Own a Pet

The American Pet Products Association (APPA), a not-for-profit industry group, said almost 70% of US households own a pet, cited AJ Horch of business and real-time financial news platform CNBC. Most of them enjoy showering their fur buddies with products and services to make their lives even better. Overall spending in the US pet industry increased at about 4% each year, up from $66.75 billion in 2016 to nearly $70 billion since.

However, it is also likely that one in three of these pets will need emergency treatment in any given year. Emergency treatment is costly and unexpected, in which a visit to the veterinarian can amount to between $800 and $1,500. For most Americans, the expense is a financial burden since they will be unable to cover the unexpected cost, according to Philadelphia-based pet insurance company Petplan, as mentioned by Horch. When faced with an unexpected cost of $400, 27% of adults would have to either borrow or sell something and 12% would be unable to cover the said expense.

The North American Pet Health Insurance Association (NAPHIA), a freestanding body composed of reputable and experienced pet health insurance firms, found that nearly 2.16 million pets were insured in the US in 2018, an increase of 18% ($2.07 million) compared to 2017 figures. Accident and Illness plans remain to be the main driver in the pet health insurance market.

In all, 98% of insured pets in the US were covered either through an Accident and Illness plan or through Insurance with Embedded Wellness Plan. A mere 2% of insured pets were insured through an Accident Only plan. In the UK, an estimated 25% were insured while about as high as 40% of pets were covered in Sweden, as reported by Today’s Veterinary Business, an official journal of the North American Veterinary Community.

Moreover, gross written premiums across the US increased by 24% in 2018, totaling to $1.3 billion, up from $1.03 billion in 2017 (23.2% increase a year prior) and $836.6 million in 2016. Insured dogs and cats in the US averaged 4.6 and 5.5 years old, respectively. The average premium in the US for accident and illness coverage amounted to $566 ($544.84 in 2017) for dogs and $354 ($342.37) for cats, an increase of 3.9% and 3.5%, respectively. Meanwhile, accident-only plans cost an average of $190 .02 ($190.08 in 2017) for dogs and $141 ($152.66 in 2017) for cats, a decrease of 0.03% and 7.7% respectively.



How Do Pet Insurance Plans Work?

Pet insurance plans come with a variety of deductibles, co-payments, and premiums. You will choose an annual deductible amount and a reimbursement percentage, which refers to the percentage of costs the company will pay, explained Christie Long, DVM, of Pet Coach, a leading source of expert advice for pets. Higher deductible plans entail lower premiums while lower reimbursement percentage plans have lower premiums.

Pretend you have a plan that has a $200 deductible and a reimbursement percentage of 80% for illnesses and injuries incurred by your pet dog. Let’s say your dog swallows a tennis ball, blocking his intestines. You found out that he needs to undergo a $1,000 surgery. Since this is your pet’s first (and hopefully last) injury of the year, you’ll pay the $200 deductible and another $200, which is 20% of the total cost of your dog’s surgery. The bill totals $400 and the insurance firm will cover the remaining $600.


Is It Affordable?

In general, an insurance plan with a higher deductible and a lower reimbursement will be more affordable, but you’ll end up paying more of the costs if your pet gets sick or injured. A basic plan can cost as much as $20 a month. Alternatively, a plan that covers wellness visits and other things may cost as much as $80 a month.  

There are many factors that determine the cost of your pet’s premium such as your location and your pet’s breed. Most insurance firms use geographic location as a factor since the price of vet care is the same in all areas. You can ask for a free quotation from your chosen pet insurance company.  



Are There Other Ways to Minimize Medical Bills?

There are other ways to cover and reduce your pet’s medical bills. You can set up a savings account for your pet for unexpected treatment costs, suggested Walker. You can set aside an amount of money every year for your pet’s emergency fund to cover vet costs. Consider asking your vet which vaccines you can skip. Veterinarian and vice president of the ASPCA’s Bergh Memorial Animal Hospital Louise Murray, DVM, said some prevent serious and costly diseases. However, ringworm is a mild condition and vaccine for it is not that effective, she warned.

Ensure that your pet is guarded against parasites. For instance, fleas can cause anemia, which is life-threatening, and ticks can spread Lyme disease and Rocky Mountain spotted fever. It is best to purchase an inexpensive topical solution to keep them away. Further, spaying or neutering your pet can prevent health problems, including some cancers.

Pet insurance helps reduce your pet’s medical bills and prevents “economic euthanasia.” Consult your pet insurance firm for a quotation and see if the breed of your pet is covered by the plan.