The truth about cost, coverage and exclusions

There’s a good chance you know someone who faced a sudden $3,000 vet bill. Maybe that someone was you. As medical care costs for our four-legged family members continue to climb — up 6.2% in 2024 alone — pet insurance offers a way to protect both your pet and your wallet from those budget-busting surprises. Yet only about 4% of U.S. pet owners currently insure their pets, often due to persistent myths about how these policies work.

From feeling that pet insurance isn’t worth the premium to worrying that pre-existing conditions could bar coverage, these issues keep many pet parents from exploring insurance that could save them significant money, especially with the average emergency vet visit now costing anywhere from $200 to several thousand dollars.

So if you’re feeling nervous about the cost of pet insurance, learning how these policies work helps you make smarter choices for your playful kitten, adventure-loving dog or senior pet needing extra care.

We debunk the most common myths about pet insurance — and look at when coverage makes sense for your furry family members.

In this guide

Myth #1: Pet insurance isn’t worth the money

The monthly pet insurance premium you pay might feel like an unnecessary expense when your furry friend is healthy. But with veterinary costs continuing to rise, one unexpected incident could result in draining your emergency fund or maxing out your credit cards.

“Pet insurance is something you’ll be relieved to have if you ever need to use it,” says Dr. Kristen LaCroix, a doctor of veterinary medicine specializing in emergency care. “I’ve diagnosed six-month-old pets with lymphoma and performed countless surgeries on pets under three years old. Those $8,000 emergency surgeries don’t only happen to senior pets.”

And it’s not just older pets that can get into accidents, LaCroix adds, “it’s the one-year-old pup running around full of life.”

Only 32% of pet parents say they can cover emergencies with their savings, reports a recent MarketWatch survey, while 43% say they’d pay for the expense using credit cards or loans. That’s because most vet clinics require you to pay for services upfront, which can leave you in a tight spot when facing an emergency and cash isn’t readily available.

Owners among the 125 million U.S. households that include pets paid $38.3 billion in total for vet care in 2024, according to the American Pet Products Association.

Meanwhile, 87% of pet owners with insurance plans say they pay less than $70 monthly for their policies, with 47% of those owners saying they pay under $40 a month — or $480 a year — less than what you might pay for coffee or food delivery.

The real value of pet insurance goes beyond your finances. When faced with a serious medical decision for your pet, the last thing you want is to make that choice based solely on what’s in your bank account.

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Myth #2: Most vets don’t accept pet insurance

Pet insurance works differently from human health insurance — you don’t need to worry about finding in-network providers or confirming whether a vet accepts your insurance plan. Instead, most pet insurance companies use a reimbursement model, which means any licensed vet or specialist can treat your pet.

For standard pet insurance reimbursement:

• You visit any vet. Your provider doesn’t need to interact with your pet insurer.

• You pay for services up front. You can cover the bill using cash or credit.

• You submit your claims. Upload your invoices and medical records through your insurer’s app or portal.

• You get reimbursed. Most companies pay 70% to 100% of covered costs within two to 14 days.

This system gives you flexibility to choose clinics, specialists or emergency hospitals without worrying about whether they’ll accept your pet insurance policy.

However, this reimbursement model isn’t without faults. Vet clinics typically require upfront payment, with bills averaging a few hundred dollars to $5,000 or more for urgent issues and surgeries. This process could be a financial barrier for pet owners who don’t have sufficient emergency savings. While traditional pet insurance reimburses you later, a growing number of providers now offer same-day claims approval to bridge this gap — for example, Lemonade advertises rapid repayment in as little as 48 hours.

⌛ We asked a veterinarian: Why does approval time matter for pet insurance?

While fast approval allows you to focus on your pet during an emergency, other policy details matter in the long term. For example, some plans cap annual payouts at as little as $5,000, which can fall short for chronic illnesses like cancer.

That’s why you should look for a policy that offers:

• High limits. Choose unlimited annual coverage or at least $15,000 or more per year. This helps you avoid maxing out your benefits if your pet needs multiple surgeries or ongoing treatments.

• No condition limits. Avoid policies that cap spending on specific health issues. Some plans limit coverage to $2,000 per condition, which won’t go far if your pet develops diabetes or needs long-term medication.

• Lifetime protection. Select coverage that continues year after year for ongoing conditions. Some policies stop covering chronic issues after the first year, leaving you to pay for medications or treatments out of pocket for the rest of your pet’s life.

• Clear approval process. Look for insurers offering fast claims decisions, ideally within 24 to 48 hours. This helps you make quick decisions about your pet’s care during emergencies without worrying about delayed reimbursement.

Myth #3: You can’t find affordable coverage for certain breeds (or exotic pets)

Picture this: You finally adopt that squishy-faced French bulldog puppy you’ve been dreaming about, only to learn they’re prone to breathing issues that could cost thousands to fix. Or maybe your child talked you into getting a hedgehog, and now you’re staring at exotic vet bills for quill mites you didn’t even know existed. It’s easy to assume insurance for these pets is either unavailable or wildly expensive — but that’s not entirely true.

While breed and species do impact costs, coverage is far more accessible than most owners realize. Frenchies, now America’s most popular dog breed, typically face higher insurance premiums than mixed breeds, but many pet insurers provide affordable coverage that won’t cost you an arm and a leg.

💡 We asked an expert: Why you shouldn’t wait to insure your pet

While fewer insurers offer policies for exotic pets, it isn’t difficult to find one. Plus, the cost of exotic pet coverage often runs lower insurance for a cat or a dog, with monthly policies typically costing $8 to $21, according to Nationwide. This makes sense when you consider that the average vet visit for an exotic pet costs between $70 and $250.

Beyond dogs and cats, these are some of the pets you can typically insure:

• Birds — including parrots, finches and cockatiels

• Reptiles — like bearded dragons, geckos and snakes

• Small mammals — rabbits, ferrets and guinea pigs

• Some amphibians — certain frogs and salamanders

Keep in mind that exotic pet policies may cap annual benefits at lower amounts than dog or cat plans. And you could find there are more coverage exclusions for species-specific issues. For example, a policy for your bearded dragon might cover accidents and illnesses but exclude common issues like metabolic bone disease. Similarly, coverage for birds typically includes accidents and sudden illnesses but might exclude behavioral issues or feather picking.

Even with higher premiums for specific dog and cat breeds or coverage limitations for exotic pets, having an insurance policy can save you from unexpected vet bills while getting your pet the care it needs.

Myth #4: My pet has pre-existing conditions, so no insurance will cover it

Just because your pet has a pre-existing condition doesn’t mean insurance won’t help with future medical costs. While insurers won’t cover conditions diagnosed before enrollment, your policy should protect you against new illnesses and accidents.

Here’s how pre-existing conditions actually work:

• New, unrelated health issues get full coverage regardless of pre-existing conditions.

• Curable conditions like ear infections often become eligible for coverage after six to 12 months without symptoms.

• Chronic conditions like diabetes diagnosed before enrollment may be excluded from coverage.

Let’s say your dog had a skin infection last year that cost $400 to treat. While that specific condition might be excluded initially, your pet would still be covered if they:

• Break a leg ($2,000+)

• Swallow a toy requiring surgery ($1,000+)

• Develop allergies ($500+)

• Need cancer treatment ($3,000+)

Certain breeds may face other limitations. For example, German shepherds, often prone to costly hip problems, might face breed-specific exclusions. Similarly, French bulldogs are known for having breathing issues that could require surgery, which some policies exclude as a breed-related condition.

What insurers consider when reviewing pre-existing conditions:

• Whether the condition is curable or chronic

• How long your pet has been symptom-free

• The connection between past and current issues

• Your pet’s complete medical history

Pro tip from Dr. Bethany Hsia:

That’s why timing is key – the sooner you enroll your pet, the fewer pre-existing conditions they’ll have on record.

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Myth #5: Pet insurance covers all routine and preventive care

One of the most common misconceptions about pet insurance is about what these policies actually cover. Many pet parents believe their insurance automatically includes everything from routine checkups to emergencies.

However, standard pet insurance policies typically focus on unexpected accidents and illnesses rather than preventive care. Wellness plans, on the other hand, typically focus on preventive care.

Standard pet insurance typically covers:

Standard wellness plans typically cover:

• Annual checkups

• Vaccinations

• Dental cleanings

• Flea and tick prevention

• Spaying and neutering

• Grooming

“Pet health insurance works differently from wellness plans,” explains Dr. Kristen LaCroix, DVM. “I’ve seen pet owners paying $200 monthly for wellness plans thinking they’re fully covered. Then their pet needs a $4,000 surgery, and they’re shocked to learn their plan doesn’t help.”

Some insurance providers offer wellness coverage as an optional add-on for an average of $10 to $30 extra per month, according to Progressive, which adds preventive care coverage that helps with routine expenses. However, most insurance policies don’t include wellness coverage by default.

💡 Expert tip: If you want full-spectrum pet health care, consider pairing a pet insurance plan with a wellness add-on. For budget-conscious owners, prioritize accident and illness coverage first — it’s the financial lifeline when stakes and bills are highest. A torn ACL costs $1,200 to $7,000, while routine dental cleanings average $200 to $800.

Keep in mind that corporate veterinary chains’ wellness plans may limit where you can use them, creating costly confusion at the worst times. Dr. LaCroix sees this regularly in emergency medicine: “One pet owner had a clinic wellness plan for her sick cat, but the plan only worked at her regular vet. For the same monthly cost as true pet insurance, she could have gotten the emergency care her cat needed. These plans might sound good, but they might not work exactly when you need them most — when an emergency happens.”

How to shop for pet insurance

When comparing pet insurance policies, focus first on coverage for accidents, illnesses and emergency care rather than routine checkups. While monthly premiums might seem high when your pet is healthy, one emergency surgery could make the investment worthwhile. The key is understanding exactly what you’re buying before you need to use it.

Dr. Sarah Gorman, managing veterinarian at Small Door Veterinary in New York City, recommends weighing these key factors when choosing your policy, especially if you have an older pet:

• Long-term care. Look for insurance policies that cover chronic conditions, ongoing medications and geriatric care. Older dogs in particular will need coverage in these areas.

• Age restrictions. Ensure the policy doesn’t have age limits for enrollment or renewal, as some companies may stop offering coverage to older pets.

• Coverage scope. Evaluate what’s covered by the insurance policy, including accidents, illnesses, surgeries, diagnostic tests, medications and emergency care. Some policies may offer additional coverage for routine care or alternative therapies, so consider your pet’s specific needs.

• Cost sharing. Look into the deductible amount, which is the portion you pay before the insurance coverage kicks in. Additionally, consider the reimbursement percentage, as it determines the portion of the vet bill that will be covered by the insurance company.

• Coverage limits. Understand any exclusions or waiting periods associated with the policy. Exclusions refer to conditions or treatments that are not covered, and waiting periods are the time you must wait before certain conditions become eligible for coverage.

• Maximum benefits. Check if the policy has annual or lifetime maximum payout limits. This is the maximum amount the insurance company will pay out over a given period. Ensure it aligns with your expectations and the potential costs of veterinary care.

Take the time to compare at least three policies side by side, carefully reading the fine print. Getting quotes from multiple providers helps you understand the full range of coverage and costs available.

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FAQs: Insuring and protecting your pet

Researching pet insurance options can feel overwhelming with so many coverage options and providers to compare. Here are key answers about getting pet insurance to help you make an informed decision.

Learn more in our growing library of personal finance guides that can help you save money, earn money and grow your wealth.

Does pet insurance cover vaccines?

No, most standard pet insurance coverage won’t include routine vaccinations. However, some insurance providers offer wellness care add-ons that help cover these preventive costs, usually for an extra $10 to $30 a month.

When should I get pet insurance?

The best time to get pet insurance is when your pet is young and healthy — before any pre-existing conditions develop. Insurance agencies typically offer lower rates for younger pets, and getting coverage early means that your pet’s health needs are protected from the start.

Do I need pet insurance for an indoor cat?

Even indoor cats can benefit from pet insurance coverage. While they may face fewer accident risks, they can still develop costly illnesses like kidney disease, cancer or dental problems that could require expensive treatments. That’s why many indoor cats can rack up significant vet bills despite never going outside, making pet insurance still worth it.

Can you have two pets on the same insurance policy?

Most pet insurance providers allow multiple pets on a single policy and often offer multi-pet discounts at checkout. Some companies offer up to 10% off for each additional pet, though you’ll typically have separate coverage limits and deductibles for each animal’s care.

Sources

• Total Pets Insured, North American Pet Health Insurance Association (NAPHIA). Accessed on January 31, 2025.

• Cost of Veterinary Care, Healthy Paws Pet Insurance. Accessed on January 31, 2025.

• Dog Wellness Plans, PetMD. Accessed on January 31, 2025.

• Your Pet’s Emergency Vet Bill, Blue Pearl Pet Hospital. Accessed on January 31, 2025.

• Pet Insurance and Pre-existing Conditions, ASPCA Pet Health Insurance. Accessed on January 31, 2025.

• Dog Surgery 101: Costs, Care & More, Lemonade. Accessed on January 31, 2025.

About the writer

Yahia Barakah is a personal finance writer at AOL with over a decade of experience in finance and investing. As a certified educator in personal finance (CEPF), he combines his economics expertise with a passion for financial literacy to simplify complex retirement, banking and credit topics. He loves empowering people to make informed financial decisions that improve their everyday and long-term wellness. Yahia’s expertise has been featured on FinanceBuzz, FX Empire and EarnForex. Based in Florida, he balances his love for finance with freediving, hiking and underwater photography.

Article edited by Kelly Suzan Waggoner