Vets hands holding cat and dog.

What is Pet Insurance, How Does it Work, and Is it Right for You?

We are surrounded by insurance. We see constant commercials on television, hear radio ads, and receive offers in the mail. So… what is insurance?

Insurance is an arrangement (policy) between a person and a company that provides a guarantee of compensation for a specific loss. The loss can be death (life insurance), disability (disability insurance), damage to an automobile (automotive insurance), damage to a home (house insurance), or costs related to healthcare (health insurance). The “guarantee of compensation” is based on a policy for which the owner makes a payment.

What is Pet Insurance?

Pet insurance helps pet parents avoid a financial crisis due to unexpected veterinary expenses from accidents and illness. This enables pet owners to make decisions based on what is best for their pet and avoid difficult decisions dictated by financial limitations.

How Long Has Pet Insurance Been Around?

The first pet insurance policy was written in 1890, and was focused on horses and livestock. Around 1947, what we think of as pet insurance came to fruition. The country’s first dog insurance policy was created in 1982, and belonged to television superstar Lassie.

What Does Pet Insurance Cover?

Pet insurance pays for veterinary care as covered by the specific policy’s limits. Both coverage and cost will depend on your policy.

Some key points about pet insurance coverage include:

As in the human healthcare market, the cost of providing quality care for dogs, cats, and other pets has gone up. In many ways, this is a positive development. Veterinary medicine has become more sophisticated and doctors routinely employ advanced diagnostic techniques, such as magnetic resonance imaging (MRI) and computerized tomography (CT), as well as innovative treatment options like arthroscopic surgery and a full range of radiation, chemotherapy, and alternative cancer care options. While these modern techniques keep the standard of living and quality of care high for our pets, they can get quite expensive. Bills sometimes run into the thousands or even tens of thousands of dollars.

Pet insurance covers a range of veterinary healthcare costs. For most pet owners with pet insurance, it makes it easy to follow a veterinarian’s recommended course of treatment knowing that your coverage will provide financial peace of mind.

What are the Components of a Pet Insurance Policy?

Pet health insurance providers offer several basic types of policies and upgrades. The main components of a pet insurance policy include:

You can purchase your policy directly from a pet insurance company or an insurance agency representing several different companies.

How Does Pet Insurance Work?

Here is an example of how a pet insurance policy might work:

How Much Does Pet Insurance Cost?

As mentioned above, the cost to insure a dog or cat will depend on your coverage, the breed and age of your pet, and your location in the country. Pet insurance in New York City, for example, can cost more than coverage in a small, rural town. The average monthly cost of a pet insurance policy for a dog ranges from $28 to $75. Policies for cats range from $15 and $46. Again, the cost will vary depending on the deductible and reimbursement that you choose. Most companies make it easy to get a quote. You can usually get an estimate in just a few minutes on any provider’s website.

Do I Need Pet Insurance?

There are many factors to consider as you make plans for your own wellness, as well as possible emergency care for your dog or cat. Once they’ve learned about pet insurance, the most common question pet owners have is whether or not they need it. This is a highly personal question that has to do with your financial situation, your interest in advanced diagnostic and treatment options, and how you would handle a sudden expense for your dog, cat, or other pet.

Is Pet Insurance Right For You and Your Pet?

It is estimated that four out of five pets will have a medical emergency in their lifetime and that every six seconds a pet owner will face a veterinary bill of $1,000 or more.

Ask yourself, can you afford a $1,000 vet bill? How about a $5,000 vet bill? Medical care for pets, including emergency care, diagnostic tests, and treatment options, is becoming increasingly more sophisticated and more expensive. It is not uncommon for a sick pet to go to an emergency clinic for a routine problem and return with a $500 to $2000 bill for some simple diagnoses and treatments.

If it’s difficult for you to come up with $5,000 or even $1,000 to pay a vet bill, then pet insurance may be just what you need.

Click here if you’d like to learn more about pet insurance.

Independent article by PetPlace® may be compensated by its affiliates when you click on or make a purchase using the links in this article. PetPlace is a brand of Independence American Holdings Corp. (IAHC).