Pet Insurance Guide

By: Vivien Bullen

Pet insurance can help defray expenses if your four-legged friend has a medical emergency. See more pet pictures.

­Pet insurance may seem like a fairly new concept, but it's been around for quite awhile. In 1982, Veterinary Pet Insurance (VPI) issued the first insurance policy to a pet in the United­ States. That pet just happened to be Lassie, the most famous canine television star in the world [source: Embrace Pet Insurance]. More than 25 years later, the popularity of pet insurance has skyrocketed.

Pet insurance may seem like an unne­cessary expense to most pet owners, but the American Veterinary Medical Association reports that Americans alone spent more than $24.5 billion on pet health care in 2006 [source: AVMA]. That raises the question: How much could you afford to spend if your pet had a medical emergency?


As veterinary science continues to advance, procedures and equipment that haven't always been accessible to veterinarians are becoming more readily available. As a result, veterinary bills continue to rise. In fact, some new procedures cost more than $5,000 [source: Weston].

If you're considering pet insurance, you may want to consider this: The average monthly cost of insuring a dog, one of the more expensive pets to insure, is $28. That's roughly $336 a year. In 2006, the cost of veterinary care in American households for all pets averaged $366 [source: AVMA].

­It's important to understand that paying for the insurance won't cover all of your veterinary expenses. You still have to pay deduct­ibles and co-pays, and you'll have to limit how much your policy will pay out yearly, but it may not cost much more than you're already spending annually. In the event of a major emergency, it could save you thousands.

If you're the type of person who would go into debt to save your pet's life, pet insurance might be a better alternative to the poorhouse. There are a number of companies that offer affordable policies to suit your specific pet. We'll learn about those, and more, on the next page.


Pet Insurance Plans

The number of companies that offer pet insurance has grown immensely over the past decade. Whether you have a dog, cat, bird or some type of exotic pet, there is a policy out there to suit your needs.

Veterinary Pet Insurance (VPI) has been around the longest and owns a staggering 71percent market share. They offer policies with coverage for lab fees, surgeries, prescriptions and office visits. They even have policies for birds that cover self-mutilation and feather-picking. Don't fret if you don't own a dog, cat or bird - coverage is available for hamsters, pigs, sugar gliders, lizards and a slew of other exotic pets.


The most popular pet insurance plan offered by VPI is called the VPI Superior Plan. Under this policy, pets are protected in the event of accidents, illnesses, x-rays, surgeries, cancer, prescriptions and hospitalizations. The maximum annual benefit is $14,000. VPI also offers more expensive -- and expansive -- plans that cover everything from vaccinations to dental procedures.

Unfortunately, there are currently very few companies that offer coverage for animals with pre-existing problems and hereditary conditions. One company that does offer insurance for genetic conditions is Embrace Pet Insurance. They will cover your pet's surgery, chemotherapy or any other procedure related to its hereditary condition [source: Embrace Pet Insurance].

There are a number of companies to consider in your search for pet insurance. Well-known pet insurance companies include VPI, Petcare and Pet Assure. If the idea of shilling out big money is a hard one to bear, there's an insurance plan out there that fits the specific needs of your pet and your budget.

The next page will help clear up some of your questions about insurance costs.


Pet Insurance Costs

The costs associated with pet insurance are the same costs associated with your own health insurance. That said, insuring your pet's health is much cheaper than insuring your own. You have to deal with monthly premiums, co-pays and deductibles no matter what. However, in the event of a pet's medical emergency, the right policy can save you thousands.

On average, pet insurance policies cost anywhere from $9 to $40 a month. Cats are a little more expensive to insure than birds and other exotic pets, while dogs are more expensive to insure than cats. It makes sense. The bigger the animal, the more it costs to insure. Fortunately, bargain hunters have plenty of providers to choose from, including PurinaCare and Petfirst Healthcare. In addition, the American Kennel Club (AKC) and the ASPCA both carry their own pet insurance plans.


According to Veterinary Pet Insurance (VPI), the world's largest provider of pet insurance, your per incident deductible is going to be around $50 and your co-pay will be 10 percent. From there, your costs depend on your insurance plan. Under VPI's standard plan, the annual premium for a dog is $134 and $94 for an adult cat. Under VPI's Superior Plan, premiums jump to $239 and $164, respectively. Mature dogs and cats will cost a bit more because they are more inclined to have medical conditions caused by old age. The standard plan offers a per-accident cap of $2,500 while the Superior Plan adds $2,000 to that total [source: Weston].

In the event of an unexpected emergency, pet insurance can be a lifesaver. Preparing for a medical emergency in advance may save you from having to euthanize your pet for financial reasons.

Read the next page to learn how to choose between pet insurance options.


Choosing the Right Pet Insurance

Choosing the right pet insuranc­e for your pet can be stressful, but it doesn't have to be. It may seem overwhelming at first glance, but the benefit of having so many companies -- and policies -- to choose from is that you're sure to find one that meets your needs.

The first thing to consider is your budget. You don't have to spend a ton of money to get a policy that will save you thousands in the case of an emergency. In fact, you can get a pretty good policy for the amount of money you'd save by skipping your morning coffee once a week.


When looking for the right policy to suit your pet, the first expense you're going to run into is your premium, which can range from under $100 to $500 annually, depending on the type of pet you have, the age of your pet and the amount of coverage you want. You'll also have a copayment and a deductible, which vary depending on your premium.

You'll need to consider any hereditary condition your pet might have. Very few companies offer coverage for animals with pre-existing conditions, but there are a few that offer coverage for genetic conditions, which could save you a large sum of money in the long run.

Some companies also offer multiple pet discounts, which can save you a load of cash. You'll also want to make sure that your chosen policy allows you to use a veterinarian you approve of or a specialist in case your veterinarian doesn't offer the treatment your animal needs. Most pet insurance plans don't require you to choose a vet in their network, so you'd have the option of seeing any vet you like. However, you should verify this with your insurance provider.

To make sure you're choosing a financially sound company that will be able to cover your pet's medical expenses, check its history at the Better Business Bureau Web site.

Every pet and owner will have specific needs when it comes to medical insurance. With a little research, however, you'll be able to find a policy that protects you both and saves you money in the long run.

For more information, visit the links on the next page.


Lots More Information

Related HowStuffWorks Articles

More Great Links


  • American Veterinary Medical Association. "Reference." (accessed 01/20/2009)
  • Bairey, Steph. "How Much Does it Cost to Own a Pet?" Family-Pet. (accessed 01/20/2009)
  • Embrace Pet Insurance. "The History of Pet Insurance in the US." (accessed 01/20/2009)
  • Embrace Pet Insurance. "Pet Insurance for Genetic, Hereditary, and Breed-specific Conditions." (accessed 01/20/2009)
  • Emmerson, Kassidy. "Choose the Right Pet Inusrance." Associated Content. (accessed 01/20/2009)
  • Veterinary Pet Insurance. "Plans & Coverage." (accessed 01/20/2009)
  • Veterinary Pet Insurance. "How VPI Works." (accessed 01/20/2009)
  • Veterinary Pet Insurance. "What's So Toxic About Chocolate." (accessed 01/20/2009)
  • Weston, Liz Pulliam. "Should you buy pet insurance?" MSN Money. (accessed 01/20/2009)