FINANCIAL FRESHMAN #060
TL;DR → The cost of veterinary medicine has increased, so pet insurance providers have gotten much more prevalent in response. If you want to reduce the risk that an unexpected vet bill tanks your budget, consider a small policy. Tools like Pawlicy Advisor can help you compare and contrast all the options that are out there.
The Cost of Pets
Let me make one thing clear right from the start: I am not here to sell you pet insurance. What I will do is lay out the facts, and those facts may show that pet health insurance makes sense in certain situations.
Anyone with a pet knows that vet bills are expensive. Surprise vet bills are even worse. Whether it is a swallowed sock, a torn ACL, or a cracked tooth, these unexpected costs can strain even the most disciplined budgets.
Here are some numbers (from USA today) that help paint the picture:
- Veterinary care costs have risen 60% since 2014.
- 65% of Americans say they could not afford a life-saving vet expense over $1,000.
- Of those who declined veterinary care, 70% cited cost as the reason.
- One humane society reported a 22% increase in surrendered pets because owners could not afford care.
If those numbers worry you as much as you love your pet, then exploring pet insurance may be worth it. In this post, we will break down how pet insurance works, when it makes financial sense, and answer one big question—what is the best pet insurance for dogs?
How Pet Insurance Works
At its core, pet insurance is simple. You’ll pay a monthly premium, and in return the insurance company helps cover your vet bills. The tricky part is understanding the details that affect how much you pay and how much you get back.
There are three main variables to pay attention to:
Most policies fall into one of two categories:
- Accident and Illness Coverage: This is the most valuable option, protecting against big-ticket expenses like broken bones, swallowed objects, or cancer treatments. We recommend considering this.
- Wellness Coverage: This covers routine care like vaccines or checkups. It often costs more than it is worth, so we personally don’t recommend it. Especially because these expenses are predictable.
One final detail to know is how the payouts work. In most cases, you pay the vet upfront and then submit a claim to your insurance company for reimbursement. A few providers, like Trupanion, may pay the vet directly, but that is the exception rather than the rule.
When Pet Insurance Makes Sense
Pet insurance is not always necessary, but there are clear situations where it can be a smart financial move:
- Young Pets: When your pet is young, premiums are cheaper and coverage is broader. Starting a policy early helps you lock in lower rates.
- High-Risk Breeds: To your knowledge, is your pet genetically predisposed to certain costly conditions, like hip dysplasia or heart disease? Pet insurance can help offset these risks.
- If you’re not sure of your breed’s health risks, Embark has some resources that can help.
- Lacking Emergency Savings: If you don’t have the ability to cover a $2,000 vet bill in cash, insurance could be the difference between treatment and heartbreak. This may seem counter-intuitive, but remember that most pet insurance premiums are under $40 per month.
- Personal Peace of Mind: Some owners simply do not want to choose between their budget and their pet’s care. If that sounds like you, a pet insurance policy is worth considering.
If you’re sold that you should consider pet health insurance, the next step is picking a provider.
What Is the Best Pet Insurance for Dogs?
In the world of pet health insurance there are…options. So many in fact, that making a choice could get overwhelming pretty quickly
The word “best” is tricky here, because the right plan for one owner may be the wrong choice for another. Instead of telling you which company to pick, I want to give you a roadmap for figuring this out on your own based on what you value.
Of these line items, which sound most important to you?
Lowest Premiums: If keeping monthly costs low is your main concern, Healthy Paws or Figo may fit your needs. You may pay more out of pocket when claims happen, but your monthly payment will feel lighter.
Most Coverage: If avoiding surprise expenses is your top priority, Trupanion or Nationwide offer broad coverage. These plans usually cost more per month but can save thousands if your pet faces a major illness or injury.
Customizable Budgets: Lemonade and Spot let you adjust deductible, reimbursement rate, and coverage limits to match your financial comfort level. This helps balance monthly cost against potential out-of-pocket expenses.
Speed of Reimbursement: Some insurers process claims faster than others. Trupanion is known for fast payouts, which is valuable if cash flow is tight.
Accident-Only Coverage: For young, healthy dogs, a plan that covers accidents only can save money. Many companies, including Lemonade and Spot, offer accident-only options with lower premiums.
Wellness Add-Ons: If routine care matters, some insurers let you add wellness coverage for vaccines, checkups, and preventive treatments. Lemonade and Nationwide offer optional wellness add-ons.
Geographic Availability: If you travel or live in a rural area, check whether the plan reimburses any licensed vet or only one that’s in-network. Trupanion, Healthy Paws, and Figo reimburse any licensed vet, which provides flexibility.
If you want to dive a little bit deeper into comparison, know that there are tools out there to help you compare plans, while taking into account the age and breed of your specific pet. We’ve checked out several of them, and we recommend Pawlicy Advisor.
Final Thoughts
On this blog, we often talk about the idea of becoming financially unbreakable. That means building systems in your life that protect your finances from surprises, whether that be car trouble, medical bills, or in this case, a sick pet.
Whether you choose a pet insurance policy or build your own emergency fund, you are taking the right step by planning ahead. Your pet will thank you either way.
