Most pet owners choose mid-level coverage that balances monthly costs with solid financial protection. MoneyGeek's research shows that the average cost of pet insurance is $53 monthly ($639 annually) for dogs and $29 monthly ($347 annually) for cats. These figures reflect common coverage choices: $5,000 annual limits, $500 deductibles and 80% reimbursement rates applied for 6-year-old Labrador Retriever and 7-year-old Ragdoll profiles.
Do I Need Pet Insurance?
Updated: August 11, 2025
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Key Takeaways
Thinking about pet insurance? It depends on your pet's risk factors, coverage options and budget constraints.
Your coverage needs ultimately depend on your pet's type, breed, age and budget for upfront costs.
Coverage terms like deductibles, reimbursement rates and annual limits directly impact your monthly costs and financial protection.
Is Pet Insurance Coverage Right for Your Companion?
According to the North American Pet Health Insurance Association (NAPHIA), 7.03 million dogs and cats were insured in the U.S. in 2024, an increase of 12.7% from the year before. However, millions more pets remain uninsured. Whether pet insurance makes sense depends on four factors directly impacting your budget and your pet's health.
- 1
Understand your coverage options
You have three main pet insurance options that provide different levels of financial protection:
- Accident-only coverage: Covers unexpected injuries like broken bones from falls, cuts from glass, poisoning from toxic substances or trauma from car accidents. It won't help if your pet develops cancer, diabetes or other illnesses, but it's the most affordable option for pet owners on tight budgets.
- Accident and illness coverage: Covers pretty much everything, including injuries and health conditions (cancer, heart disease, kidney problems and genetic disorders like hip dysplasia).
- Wellness plans: Covers routine care for annual exams, vaccinations, dental cleanings and preventive treatments. But they work more like a subscription service for predictable costs rather than insurance for unexpected expenses.
- 2
Assess your pet's risk profile
Your pet's breed, age and lifestyle directly influence their health risks and potential veterinary costs:
- Purebred dogs often carry higher risks than mixed breeds due to genetic predispositions. For instance, French Bulldogs are prone to breathing problems and spinal issues, while Maine Coon cats face heart disease risks.
- Young pets have lower premiums but longer coverage periods, while older pets cost more monthly but may need coverage sooner.
- Pets that stay indoors face fewer injury risks than those that roam outdoors, but both can develop expensive conditions like diabetes or kidney disease that require ongoing treatment.
- 3
Calculate the financial impact
Pet insurance affects your finances through:
- Monthly premiums: You'll have a new monthly bill to work into your budget, which won't stay the same forever. Expect higher costs each year as your pet gets older, with your final premium depending on your pet's breed, where you live and how much coverage you choose. You'll also pay annual deductibles ranging from $100 to $1,000 before insurance starts.
- Out-of-pocket costs: Pet insurance works on a reimbursement model, so you'll pay the full veterinary bill upfront and wait for reimbursement. This means you need sufficient emergency funds or available credit to cover potentially thousands of dollars in veterinary bills before receiving your insurance payout, which arrives within days to weeks of claim submission.
- 4
Know the common veterinary costs
Understanding typical veterinary expenses helps you evaluate whether pet insurance provides good value for your situation. CareCredit’s research shows the real costs pet owners face:
- Routine care: Spaying your pet costs $465 for dogs and $155 for cats, while dental cleanings cost $376 for dogs and $430 for cats.
- Common conditions: When your dog gets an ear infection, expect to pay around $680, though cats only cost $151 for the same problem. Respiratory infections vary widely, with mild cases costing $205 and severe infections reaching up to $2,076 in dogs.
- Chronic conditions: If your dog develops diabetes, you'll pay $421 upfront plus $162 monthly for management.
- Emergency care: Removing something your cat swallowed costs around $1,260, while a dog's stomach blockage surgery costs $3,681.
- Serious illness: Cancer treatment represents the worst financial hit at $5,351 for dogs and $3,980 for cats.
PET INSURANCE: A SMART FINANCIAL DECISION
Whether or not to purchase pet insurance is ultimately a personal choice. But when looking at it solely from a financial perspective, pet insurance is often a savvy money move. Vet visits can get expensive fast, and the best pet insurance can help reduce costs.
How Much Pet Insurance Coverage Do Most People Need?
How Do I Find How Much Pet Insurance I Need?
Coverage needs depend on your pet's type, breed and age, plus your budget for upfront costs when your pet needs care:
Pet type
Dogs typically need more coverage than cats because they face higher veterinary costs and more injury risks from active lifestyles.
Breed
Purebreds need higher coverage, as they have more health problems than mixed breeds. For instance, large dog breeds face joint problems, flat-faced breeds struggle with breathing issues, and certain cat breeds develop kidney or heart conditions.
Age
Senior pets have the highest insurance costs and the greatest need for coverage, as older animals face more health problems and expensive treatments.
Budget
Consider your ability to handle upfront veterinary costs before reimbursement arrives. Since you'll pay the full vet bill initially and wait for insurance payback, you need sufficient emergency funds or available credit for potentially expensive treatments.
What Coverage Terms Should I Choose?
Understanding your coverage options helps determine how much pet insurance you need, as these terms affect your monthly premiums and out-of-pocket expenses when filing claims.
Deductible
Your deductible is the amount you pay each year before insurance coverage begins. Higher deductibles ($500 to $1,000) lower your monthly premiums but require more cash when your pet needs care. Choose a higher deductible if you have emergency savings and want lower monthly bills.
Reimbursement rate
This percentage determines how much insurance pays back after you meet your deductible. Most insurers offer 60% to 90% reimbursement rates. Choose a higher rate if you want maximum financial protection or a lower rate if you prefer cheaper premiums and can handle larger out-of-pocket costs.
Annual coverage limit
This sets the maximum amount your insurer pays per year, ranging from $5,000 to unlimited coverage. Higher limits cost more monthly but protect against large expenses like cancer treatment or multiple emergencies.
Why Do I Need Pet Insurance: Bottom Line
Deciding on pet insurance starts with understanding your pet's health risks, the available coverage options and the financial impact on your budget. The right amount of coverage depends on your pet's type, breed and age, plus your budget for upfront costs like deductibles when veterinary emergencies arise.
How Much Pet Insurance Do I Need: FAQ
Pet owners often have additional questions beyond "Do I need pet insurance?" We've answered frequently asked questions about pet insurance coverage and costs below:
Is pet insurance worth it?
Pet insurance is worth it if you want financial protection against large veterinary bills, though you'll still pay upfront. Insurance typically reimburses 60% to 90% of covered costs, depending on your reimbursement rate.
However, you'll also pay monthly premiums and deductibles, so carefully evaluate your budget and your pet's health risks.
Should I get pet insurance for my puppy?
Getting pet insurance for your puppy is often smart because you'll lock in lower premiums before health issues develop. Young pets start with the lowest monthly costs, and you'll avoid pre-existing condition exclusions that could deny coverage later.
Since puppies are naturally curious and accident-prone, having coverage from the start protects against expensive emergency visits while establishing long-term financial protection as your pet ages.
What does pet insurance actually cover?
Pet insurance coverage depends on your plan type. Accident-only plans cover injuries like broken bones, cuts, poisoning and car accidents. Accident and illness plans add coverage for cancer, heart disease, kidney problems and genetic disorders like hip dysplasia. Wellness plans cover routine care like vaccinations and dental cleanings.
Is pet insurance worth it for indoor cats?
While indoor cats avoid many injuries that outdoor cats face, they're not immune to costly conditions. With cat insurance averaging $29 monthly and cancer treatment costing $3,980, coverage provides valuable financial protection even for pets that stay safely indoors.
At what age should I get pet insurance?
Get pet insurance when your pet is young, ideally between 8 weeks and 2 years old, to secure the lowest premiums and avoid pre-existing condition exclusions. While you can still get coverage for older pets, premiums increase significantly with age, and many age-related conditions may be excluded.
How does pet insurance reimbursement work?
Pet insurance works on a reimbursement model where you pay the full veterinary bill upfront, then submit receipts for repayment. Most insurers reimburse 60% to 90% of covered costs after you meet your annual deductible. Reimbursement typically arrives within days to weeks of claim submission.
Can I use any veterinarian with pet insurance?
Most pet insurance plans let you visit any licensed veterinarian, specialist or emergency clinic without network restrictions. This flexibility means you can continue seeing your current vet or choose any preferred provider.
How much should I budget for pet insurance?
Budget for monthly premiums plus deductibles and out-of-pocket costs. Using MoneyGeek's research, plan for around $53 monthly for dogs or $29 monthly for cats, plus $100 to $1,000 annual deductibles.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
sources
- CareCredit. "Veterinary Exam and Procedure Costs." Accessed August 16, 2025.
- North American Pet Health Insurance Association. "State of the Industry Report 2025 Highlights." Accessed August 16, 2025.