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Pet Insurance: What You Need to Know

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By Barbara Jarvie Castiglia

Insurance is one of those things you don’t realize how much you need it, until you need it. Pet health insurance has been increasing at an average growth rate of 22.1 percent over the past five years, according to the North American Pet Health Insurance Association (NAPHIA). The market is expected to total more than $10.2 billion by 2025, Global Market Insights estimated. The total number of pets insured in the U.S. at year-end 2021 was 3.9 million, a 28 percent increase since 2020, according to a NAPHIA report. This boost was fueled by increasing adoption rates, growing awareness of insurance, and rising veterinary costs.

Pet insurance is still optional, though. It is like a health insurance policy. Depending on the level of coverage selected, it can cover and provide pet parents with a safety cushion to help cover some costs when facing high veterinary bills. Most policies have a deductible, reimbursement percentage, and yearly maximum. Balancing these variables will help pet owners determine the best policy for them. It’s important, though, for pet owners to read the policy to understand what conditions are covered.

Pet insurance does not cover bites or other incidents. Those fall under homeowner’s or renter’s policies. When acquiring a pet, it’s best to check these policies ahead of time to determine your liability for such instances.

The cost for pet insurance can vary greatly and depends upon several factors:

• age of animal,
• breed of animal,
• gender of animal,
• species of animal; and
• location.

In general, dogs cost more than cats and breeds with hereditary heath issues such as English bulldogs and German shepherds will cost more to insure. The average accident and illness premium for dogs was $583 a year or $49 a month, according to NAPHIA, and the average accident and illness premium for cats was $343 a year or $29 a month.

Pet insurance might provide active-duty military members with a sense of security when deployed. While the billing process can take some time, you won’t have to worry about leaving a family member or friend with too much of a burden in case a pet has an accident or illness. Consider having an emergency fund set aside for your pets that others can easily access to provide even more of a safety net.

Currently, there are more than 20 pet insurance providers who are part of NAPHIA. When researching your options to find what best suits your needs, be sure to ask about possible discounts for active-duty and retired military personnel. Many do provide them but might not have the specifics listed on their websites. Discounts are also often given when multiple pets are insured and for service animals. Ask your veterinarian for recommendations.

Fun Facts

• According to Lifetime Pet Insurance, the first pet insurance policy was issued in Sweden in 1890 for horses and livestock, and the first policy in the U.S. was issued in 1982 by Veterinary Pet Insurance (VPI) for the dog playing Lassie.

• Dogs make up the majority of insured pets with 83 percent, while cats make up 17 percent, according to NAPHIA.