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 policy for a dog or a cat starts at $10/month at Lemonade (plus our affordable pet health insurance has won the approval of authorities like Money.com). 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.
Here’s what we’ll cover:
The average cost of pet insurance
Factors that impact your pet insurance quote
How you can lower a pet insurance premium?
What the cost of pet insurance covers
What the cost of pet insurance doesn’t cover
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.
In the case of a 5-year-old, Domestic Shorthair cat in New York City, you’ll pay $17.42 each month, with 80% co-insurance, an annual limit of $20,000 and annual deductible of $250.
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.
For example, you’ll pay $56.17 each month for a 4-year-old Golden Retriever in Chicago, with 80% co-insurance, an annual limit of $20,000 and annual deductible of $250. If you want to add the Preventative package (to include a wellness exam, vaccinations and more) you’ll pay $66.50 each 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.
I leveled up as a Dog Mom today and got pet insurance. After doing a ton of research, I decided to go with @Lemonade_Inc, they have some of the best rates for larger (and older) pups, plus their website is top notch!— Jackie Childers (@jl_childers) September 3, 2021
I already had to get Ally some prescription glasses pic.twitter.com/YbIBXicxNE
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.
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.
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.
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.
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.
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:
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.
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 optional preventative care plans: the basic Preventative, Preventative+ and Puppy/Kitten Preventative (tailored for puppies/kittens and adult pets), as well as add-ons for vet visit fees, physical therapy, dental illness, and end-of-life and remembrance.
Lemonade’s Preventative package covers the stuff you’re probably already paying for like: your pet’s annual wellness exam, a heartworm or FeLV/FIV test, up to 3 vaccines, a parasite or fecal test, and a blood test.
There’s also the Preventative+ package, which covers routine dental cleaning and heartworm medication. Also, if your pet is under 2 years old, Lemonade offers the Puppy/Kitten Preventative, which covers things like spaying/neutering, microchipping, and heartworm and flea medication.
Our vet visit fee add-on allows policyholders to get reimbursed for the time and labor costs your vet might charge.
Lemonade offers a physical therapy add-on, which covers things like hydrotherapy, acupuncture, and other physical therapies that go beyond standard medical care for your pet, and really help them find relief from chronic pain or commit to a fuller recovery from an unexpected injury.
Lemonade also offers a dental illness add-on that can help cover things like tooth extractions and root canals, and treatments for things like gingivitis and periodontal disease.
In addition, Lemonade offers an end-of-life and remembrance add-on, which helps cover the costs of vet-recommended euthanasia, cremation, or commemorative items to memorialize your pet.
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
- 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; other elective cosmetic procedures (like giving your cat a fancy haircut); 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 pet insurance policies are 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.
Which states currently offer pet health insurance?
Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Washington, D.C. (not a state… yet), and Wisconsin.