Vet Bills Are Rising. Will Pet Insurance Save You Money?

While many of us would do just about anything to keep our furry friends healthy, paying for the pet care to meet that goal is a growing challenge. According to the Bureau of Labor Statistics, veterinary services in urban areas increased in cost by 6.1% between June 2024 to June 2025. That's more than double the inflation rate for all goods and services over the period.

Pet insurance promises to assist with rising vet bills, by covering at least part of your pet's medical expenses for a monthly premium. Yet the accumulated cost of those premiums, along with other policy costs and restrictions, make it far from certain that pet parents will save overall by insuring their animals.

Read on to learn whether pet insurance can save you money in the face of rising vet bills, and given the pros and cons of these policies.

How does pet insurance work?

Pet insurance works by reimbursing you for qualifying non-routine medical expenses. What's covered depends in part on the type of policy you buy and the customizations you choose.

Policy types

Most pet insurance companies offer two major types of policies: accident-only, and accident and illness.

Accident-only policies: These cover injuries like cuts, broken bones and swallowed objects.

Accident and illness policies: These, the most popular option, cover illnesses like cancer, diabetes and allergies, in addition to accidents.

Coverage customizations

When you buy pet insurance, you can generally customize three aspects of your pet insurance: the size of the deductible, the proportion of reimbursement and the limit, if any, on the total coverage.

Deductible: This is the amount you pay out-of-pocket every year before your insurance kicks in. The higher your deductible, the lower your annual premium. Options for the deductible generally range from $100 to $1,000. Deductibles generally reset every year, but a handful of policies offer lifetime deductibles.

Reimbursement: Your reimbursement level is the percentage of your vet bill that the insurer covers, after you meet your deductible. The less you opt to have reimbursed, the lower your premium will be. Pet insurers usually offer 70% and 80% reimbursement, and sometimes 90%, with 80% the most popular choice by policyholders. You may find some reimbursement levels that are lower and, in exceedingly rare instances, reimbursement of 100% of bills.

Coverage limit: A policy's coverage limit is the maximum your policy will pay out, usually within a year. Providers offer a wide range of coverage limits, but you'll find that most coverage limits range from $2,500 to $20,000. Many providers offer an unlimited coverage option, though you'll obviously pay higher premiums for this. Certain insurers, in addition to or instead of time-based limits, impose lifetime limits on care or limits that are based on treatment of a particular ailment over the pet's lifetime.

What does pet insurance exclude?

While the expenses pet insurance won't cover vary by provider, a few exclusions are nearly universal for all policies.

Preventive care: Most or all of the initial medical costs of getting a pet are out of scope for a regular pet insurance policy. Those include such procedures as neutering and spaying and vaccinations. To get coverage for those, and ongoing care like dental cleanings and exams, you'll have to purchase an additional preventive care add-on.

Pre-existing conditions: Any conditions that appeared in your pet before you purchased your policy or during your policy's waiting period are generally excluded. Similarly, pet insurance companies usually exclude bilateral conditions, which are conditions that affect both sides of your pet's body. For example, if your pet developed hip dysplasia in one leg before you got pet insurance, the same issue will not be covered in the other leg, even if you purchased pet insurance in the interim.

That said, some pet insurance companies differentiate between curable and non-curable pre-existing conditions. These insurers will cover pre-existing conditions that can be healed after a symptom-free and treatment-free waiting period, which can range from six months to one year.

Intentional injury: Pet insurance companies exclude injuries or illnesses that are intentionally inflicted, which include abuse and dog fighting. Some accidents and illnesses can also be excluded if the pet owner is responsible for them and they happen repeatedly. Additionally, costs associated with breeding are usually excluded.

How much does pet insurance cost?

According to the North American Pet Health Insurance Association (NAPHIA), the average accident and illness policy in 2024 cost $62.44 monthly for a dog and $32.21 monthly for a cat.

Ultimately, your premium is a reflection of the likelihood that you'll file a claim. As a result, your premium will vary based on a number of factors — encompassing your pet, your policy and where you live.

Your pet

The most important information about your pet that affects your premium is their species, age and breed. Cats are generally cheaper to insure than dogs, partially because they're generally smaller, so their treatments aren't as costly.

Cats are also notorious for hiding their injuries and illnesses, so cat owners tend to take them to the vet less frequently.

Breeds that are known to have predispositions to particular medical issues often cost more to insure, particularly among dogs. For example, longer dogs, like dachshunds, are unusually likely to develop back issues like intervertebral disc disease (IVDD). Flat-faced dogs, such as French bulldogs, are predisposed to breathing and airway issues. Additionally, purebred pets are generally more expensive to insure than mixed-breed pets, because they're more likely to suffer genetic medical problems.

Your pet's age at the time of underwriting also greatly affects your premiums, since older pets are more vulnerable to injuries and illnesses. Some insurers actually turn away pets of a certain advanced age. Most pet insurance companies reserve the right to increase your premiums annually according to your pet's age, a practice known as birthday pricing. The increases can double or even triple your premiums by the time your pet is very old.

Your policy

The policy you choose will also greatly affect your premiums. Accident-only policies are usually a fraction the price of accident and illness policies. NAPHIA found that the average accident-only policy in 2024 cost $16.10 monthly for a dog and $9.17 for a cat. Such coverage, of course, means you won't be covered for many frequent, and serious reasons, that pets are brought to a vet.

Additionally, as noted above, your deductible, reimbursement level and coverage limit will also affect how much you pay for coverage.

Where you live

Pet insurance companies also consider the cost of vet care in your area. If you live in a state where vet costs are higher, you'll have higher premiums across the board. Additionally, urban areas generally have higher vet costs than more remote areas, due to the higher cost in cities of rent and other expenses — which vets and other pet providers pass along to their patients.

Pet insurance pros and cons

Pet insurance pros

• Medical emergencies: Pet insurance offers the reassurance that your pet's medical bills might be covered, at least in part, if a costly emergency arises. It can also ease the financial anxiety over whether to see a vet when your pet is acting abnormally.

• Good for chronic conditions: Pet insurance is especially reassuring if your pet develops a chronic condition that needs ongoing treatment, like cancer or allergies. Instead of paying for each vet visit, you can rely on your pet insurance to foot part of the bill after you meet your deductible.

• Access to any vet: Unlike companies that insure people, pet insurance companies don't have medical networks that encourage or require you to use an in-network provider. You are free, then, to go to any vet. That may reduce worry over how much a particular vet charges, though you still may want to be mindful of cost with respect to not exceeding your policy's coverage limit.

• Budget friendliness: Pet insurance allows you a steady monthly expenditure that you can plan around, instead of simply hoping your pet doesn't get sick. (Tha said, you still need to budget for the policy's premiums and co-pays.)

Pet insurance cons

• Deductibles, premiums and co-pays must be paid: It's unlikely you'll benefit, financially at least, if your insured pet enjoys a normal medical life. That's because what you pay out in various ways over the pet's life is unlikely to be recouped by the reimbursements you receive from the insurer. Even if your pet suffers a very expensive medical setback — a serious car accident, say, or prolonged cancer that requires chemotherapy — you'll have to be able to pony up potentially thousands of dollars for the co-pays on medical treatments, the annual bills for which can run into the five-figure range.

• Premiums increase with age: Most pet insurance companies increase your premiums each year as your pet ages. (They also increase premiums to adjust for inflation and changes in the cost of vet care in your area, but increases will also occur for the vets bills you'd pay if you were not insured.).

• Exclusions: Some pet insurance companies set age limits for pets, and others will only write accident-only policies for older pets. Even if you can find coverage for your animal, you may find a number of your claims denied due to pre-existing conditions.

• The need for upfront payment: The vast majority of pet insurance companies work on a reimbursement model instead of covering the cost of treatment themselves. This means you need to be able to cover the full bill upfront at the time of service. You then submit a claim for the visit, and must wait for some weeks before receiving reimbursement from the insurer.

The bottom line

Whether or not pet insurance can save you money depends not only on your pet and circumstances, but on the type of pet owner you are.

Pet policies tend to pay off financially if your pet is unlucky enough to develop a serious chronic condition or suffer a major accident that requires extensive surgery. Yet — fortunately for pet owners — only a small proportion of pets ever suffer such a setback.

If your pet does get very sick, the odds are it will be fairly old. Not every pet owner will then want to subject their companion to the discomfort of prolonged treatment — or be able to cover the sizeable co-payments that could result from that care.

That said, you're a prime candidate for buying pet insurance if the above doesn't describe you. That is, if you're a pet parent with deep pockets who would seek every treatment for a pet, however old the animal and high the co-payments, a pet policy may make sense for you.

However, be aware that, even then, the odds are against you collecting. That's because your pet — any pet, in fact — is statistically unlikely to be among those that rack up high bills from a major medical setback. The probable benefit from your policy — after paying years of deductibles, premiums and co-pays — will be peace of mind, rather than a financial payoff.

Financially speaking, you'd likely be further ahead to forego pet insurance, and put into a special account what you might have paid in pet-insurance premiums every month. You can then draw from that fund to cover the cost of vets' bills — as well as that for pet food and other expenses, should you wind up with cash to spare.