Pet insurance helps cover the costs of your furry friend’s medical care. If you’ve ever gotten a vet bill you already know that unexpected veterinary care can run into the tens of thousands of dollars. Having pet health insurance means you can avoid having to ask yourself whether you can afford the treatment that your dog or cat needs to live their best life. 

There are several reasons you might not have purchased a pet health insurance policy yet. Maybe you just adopted a new pet (yay, congrats!). Or you might have thought about it and decided, after a little research online, that insurance seems too confusing or expensive. 

A pet insurance policy for a dog or a cat starts at $12/month at Lemonade. Whether or not you can expect to pay that price depends on a ton of other details though… Let’s cut through the complicated small print, and figure out once and for all how much pet insurance actually costs.

This is what we’ll cover:

The average cost of pet insurance
Making sense of your pet policy price
How you can lower a pet insurance premium? 
What the cost of pet insurance covers 
What the cost of pet insurance doesn’t cover

The average cost of pet health insurance

On average, it was more than 25% more expensive to insure your dog in 2019 than it was in 2015, according to the North American Pet Health Insurance Association. In those four years, the average cost to insure your cat climbed over 10% too. Some legacy carriers have been increasing their prices by around 10% every year. Meanwhile, new pet insurers who use tech (like Lemonade!) have joined the playing field with an eye to bringing costs down. 

So what’s the average cost of pet insurance in 2020? The price of pet insurance plans can vary significantly, depending on a bunch of different factors, so we decided to check rates for a typical cat and a typical dog at six different insurance companies. 

First, we got a pet insurance quote for a 2-year-old, short-haired cat in Brooklyn, New York. We picked the base policy offered by six different pet insurance companies, and adjusted the coverages as much as we could to include a $250 deductible, 80% co-insurance, and the maximum annual limit available, with no add-ons or discounts. 

We built these quotes to be as identical as possible, but there are a few coverage differences to note. For example, Healthy Paws only offered 80% co-insurance without an annual limit, and Trupanion only offered a 90% co-insurance option. We standardized the offerings as much as possible. 

The average cost of cat insurance turned out to be about $25/month. 

Next, we pulled quotes for a 2-year-old Labrador, also from Brooklyn, New York. We got the cost of a monthly premium for pet health insurance from the same six companies with no add-ons or discounts, and the average price of dog insurance came to around $66/month.

You might be wondering how a monthly premium at Lemonade can be so much lower than a policy from another pet insurance company. 

Traditional insurance companies have large overheads because they need more employees, so they end up charging customers higher premiums. Because of AI and machine learning, Lemonade’s lower overheads and lower fraud costs means expenses are slashed with technology

And don’t forget Lemonade also lets you bundle your pet insurance with your renters or homeowners policy—who wouldn’t want to save up to 10% while taking care of their fur fam? 

But that doesn’t explain why pet insurance costs so much more for a dog than it does for a cat. Or how much the cost of a policy can change when you adjust coverage options and add-ons. Here’s a deeper look at all the variables that can help you determine whether or not pet health insurance is worth it.

Making sense of your pet insurance policy price 

Several factors impact your pet insurance quote:

Cat or dog?
Cats are cheaper to insure than dogs because medical costs are generally cheaper for cats. While cats live longer than dogs, and while both will require vaccinations and exam fees throughout their lives, cats tend to have fewer medical issues. Many cats stay inside, so they’re less exposed to risks that could lead to an accident or an illness than a dog is. Dogs are also more prone to hereditary conditions like hip dysplasia or issues with a cruciate ligament.

Age
As pet owners get older, they end up needing more health care… and the same is true for their pets. When you purchase pet insurance your pet’s age will impact your monthly premium. 

Breed
Some breeds are naturally more costly to take care of than others. So if you know your cat is more likely to develop a hereditary condition like asthma because she’s a Siamese, should you assume it will be considered a pre-existing condition? Not exactly.

Your pet may not show signs of these medical conditions at birth, or in the first few years of their life. But if you wait until they develop symptoms to get insured, the condition probably won’t be covered in your policy, which is a pretty big game-changer for pet owners who’ve got vet bills that treat a chronic condition. 

Location
Your pet insurance premium price can also change depending on where you live, since vet care is more expensive in some states than others. For example, medical costs in California are higher than they are in Tennessee. 

That could also mean you’re being charged more for a vet visit. While this wouldn’t affect your monthly premium, it may affect how quickly you reach your annual limit, so make sure you customize your pet health insurance policy so it’s worth it for you.

How you can lower a pet insurance premium? 

You might be able to lower your monthly premium by adjusting your co-insurance, deductible, and annual limit on your pet health insurance policy. We bet you’d appreciate an explanation of what those things all are…

Let’s start with co-insurance (which is not the same thing as a co-pay). Co-insurance is the percentage of the total cost your insurance company will pay on a claim. So if the co-insurance you chose is 80%, then the company pays for 80% of covered costs when your pet gets veterinary care, and you pay the other 20%. Keep in mind that this is applied to every claim. With Lemonade pet health insurance, you can pick either a 70%, 80%, or 90% co-insurance. 

A deductible is another way you participate in the cost of your claim. You choose this amount—at Lemonade, it’s either $100, $250, or $500—when purchasing your policy and have the option to change it once a year at your policy renewal. The higher your deductible, the lower your monthly premium will be. Your pet health insurance policy has an annual deductible, which means you can exhaust it in one big claim, or use it up over multiple claims throughout the course of a year. 

Still confused about what actually happens when you file a claim? We’ve got you. Let’s walk through an example nice and slow.

  • Your dog, Mogley, needs knee surgery. Poor guy! 
  • The procedure costs $6,000, so you file a claim for that amount
  • Your policy includes 80% co-insurance and a $250 deductible

Here’s how your claim payment would be calculated:

($6,000 x 80%) – $250 = $4,550

Since your insurance company would pay $4,550 towards this claim, you and Mogley would be responsible for the remainder—in this case, $1,450 (that amount includes the $250 deductible).

Now let’s say a few months later you have to file another claim, after Mogley swallows a mysterious object. The resulting procedure costs $1,500. Since you already paid your deductible for the year, here’s what your claim calculation would be: 

($1,500 x 80%) – $0 = $1,200

You’d only need to pay $300 for the procedure (the $1,500 bill minus the $1,200 your insurance company contributes). This is how your claims would work for the rest of the year until you reach your annual limit.

Right… annual limits! Even the best pet insurance may have a limit to the payouts they can provide, but the good news is, you get to pick what that limit is. Different pet insurance companies will have different ranges, and at Lemonade you can choose an annual limit anywhere between $5,000 to $100,000. Your medical bills for your fur fam can add up quickly, so make sure your insurance coverage is the right fit for your budget and your pet. 

Changing your co-insurance, deductible, and annual limit are the easiest ways to lower your monthly premium… but remember that more coverage will mean a higher price. The lower your co-insurance or annual limit, the less you pay per month. Choosing a higher deductible will also keep your monthly price lower.

You might be able to lower your premium 10% or 15% by making one of these changes, but you’ll want to remember that while adjusting these reimbursement levels can lower your monthly payments, it’ll mean you’re covered for less when an expensive vet bill rolls in.

What the cost of pet insurance covers

So what are you getting for your monthly premium? A standard pet health insurance policy will help cover the costs of diagnostics, procedures, and medications to treat your dog or cat’s eligible accidents and illnesses. 

That means something like a broken leg or an injury from a car accident could be covered, as would a mysterious stomach bug. If your pet has an injury, vomiting, diarrhea, infections, cancer, or many other illnesses we hope they never have to experience, a basic policy will help cover the costs of:

  • Diagnostics: Blood tests, x-rays, MRI’s, CT scans and lab work
  • Procedures: Outpatient, specialty and emergency care, hospitalization and surgery
  • Medication: Injections or prescription meds

A basic policy will cover you for a lot of your pet’s health-related expenses, but not everything. That’s why pet insurance companies will offer add-ons.

What are add-ons? 

If you want to maximize your coverage, Lemonade offers a Preventative and Wellness package, or an Extended Accident and Illness package. 

The Preventative and Wellness package covers extras that you’re probably already paying for, like routine vaccines. It also gives you access to free online vet chat and health reminders. The Extended Accident and Illness package offers perks like physical therapies and acupuncture. 

The prices on these packages will vary by pet, but you can expect Lemonade’s Preventative and Wellness package to run you an extra $15/month, and the Extended Accident and Illness package to be close to $6/month.

What the cost of pet insurance doesn’t cover  

Your pet insurance won’t cover: 

  • Pre-existing conditions: Anything that shows up in your pet’s medical history from before your policy was active
  • Dental care: Unless the injury to teeth is caused by an accident, the cost of extraction and reconstruction of damaged teeth won’t be covered
  • Preventable situations and neglect: If a pet parent isn’t providing a safe environment or a reasonable standard of preventative care for the pet, it could be considered neglect. If that neglect results in a health issue, it probably won’t be covered. For the record, we’re sure you’re not neglecting your pet, and we hate thinking about this one, too!
  • Certain things not related to an accident or illness: Things like grooming; microchipping; other elective cosmetic procedures (like giving your cat a fancy haircut); spaying/neutering; obedience training; and boarding/travel

The truth is, pet insurance isn’t cheap, but neither is the cost of keeping your pet healthy.

If you’re not sure whether pet insurance is worth it, imagine the worst-case scenario—and whether you’d have the money put aside to cover the medical costs. 

Lemonade’s policy is customizable for a reason. If you can’t pay $60 every month for a policy with 90% co-insurance, that’s OK. We’ve made it so you can change your coverage to set a monthly price that suits your budget. We’ll still pay reimbursements and be there for you, and you can feel more comfortable with your spending on a regular basis.

In our unpredictable world, it’s even more important to protect the ones you love—so you don’t have to make a tough decision down the road.

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