Pet insurance is a big money loser for most dog and cat owners, a consumer survey found

More than a dozen companies now offer pet health insurance, promising to provide affordable, lifelong medical coverage. But when researchers with the nonprofit Delaware Valley Consumers’ Checkbook analyzed policies offered by 12 insurers, they found all these plans to be bad deals for most pet owners.

That’s mostly because pet insurance is expensive: Checkbook found that most policyholders will spend thousands more for premiums, co-pays, and other out-of-pocket costs with insurance, compared with paying all vet costs over their pets’ lifetimes. You can access Checkbook’s ratings of local veterinarians, along with our full reports on pet insurance and veterinary care, until May 5 at Checkbook.org/Inquirer/Vets.

Because most buyers sign up for pet insurance when their pets are young and monthly premiums are lowest, it looks like a manageable expense. But most insurers don’t adequately warn prospective customers about the high and rising lifetime cost of covering pets as they get older.

As pets age — and are more likely to need expensive medical care — many companies aggressively increase premiums. Sooner or later, the price becomes unaffordable, with many insurers charging more than $200 a month to continue coverage.

Embrace, for example, advertises that “Plans for cats start at under a dollar a day.” But when Checkbook calculated the out-of-pocket costs for nearly 13 years of Embrace coverage for a mixed-breed cat, premiums totaled $12,167.

For the premiums alone over almost 13 years, among the companies Checkbook compared, a pet owner would pay $7,500 to $31,000 to insure a mixed-breed dog and $3,600 to $16,000 to insure a mixed-breed cat.

And it’s even more expensive for folks who own pure breeds.

When Checkbook obtained premiums in Philadelphia for a selection of dogs as puppies and at age 12, ASPCA Pet Health Insurance quoted $67 a month for our sample mixed breed as a puppy.

But for a beagle, we’d pay $77 a month, and $129 a month for a Dogue de Bordeaux. When our dear canine reaches age 12, ASPCA Pet Health will charge us $214 a month for our mixed breed, $247 for a beagle, and $415 for the Dogue de Bordeaux.

Pet insurance is sold and bought with emotional appeals to “pet parents.” Buyers are promised that insurance will help pay for expensive treatments and avoid the heartbreaking decision to euthanize their pride and joy should they fall seriously ill or injured. And insurers do pay up when claims come in.

But many plans’ rising premiums force pet parents to pull the plug on coverage. That’s a cruel twist, because once they cancel, their pet is again at risk of economic euthanasia — which defeats all the good intentions that drew them to purchase coverage.

» READ MORE: Pet stories in The Inquirer

Checkbook has long advised that pet insurance is not worth it for many people, especially those who aren’t willing to bear large vet bills should their animals suffer serious injuries or major diseases.

If you’re willing to pay whatever it takes to treat your pets, insurance might make sense if hefty vet bills would strain your finances. But know that if the pet turns out to need only low to moderate health care over its life — as most do — you’ll pay far more in premiums and co-pays than the pets will ever get back in benefits.

If your pet has few medical problems, the hefty premiums companies charge, especially for older pets, will seem especially pricey. For example, when Checkbook’s researchers assumed a hypothetical cat had only low medical needs over his life, they found that Embrace would pay little more than $1,200 in benefits.

When they assumed the dog suffered moderate levels of health troubles, Embrace would pay out only about $4,700. Checkbook made the same conclusions when we analyzed all the pet insurance plans: If the pet needed only low or moderate health care, owners would pay far more in premiums than they’d get back in benefits.

Only when Checkbook’s hypothetical pets suffered major costly health problems did we find that pet owners typically came out ahead financially — but only if they selected a company that offered good coverage for low premiums, and some companies don’t.

If our pooch had high vet bills totaling $33,177 over his unlucky life, his family would save $580 to $16,362 with 10 of the insurance plans vs. without. However, two other insurance plans still cost $567 to $6,005 more out-of-pocket with insurance vs. without, thanks to high premiums or sometimes shrinking benefits as the pet ages.

The problem with spending so much to insure against disaster is that the odds of calamity are fairly remote. Every six seconds a pet owner faces a vet bill of $1,000 or more, according to ShopPetInsurance.com. Pet insurers also cite this statistic, which sounds scary. But in a country of 144 million cats and dogs, that’s only about a 4% chance over a year.

» READ MORE: Ratings, prices and everything else you need to find a high-quality vet in Philadelphia area

Meanwhile, the average annual accident and illness pet insurance premium in 2020 was $594 for dogs and $342 for cats. By comparison, the average annual cost for veterinary care for a dog for illnesses was $204, and $349 for emergency care. For cats, the average annual costs are $244 for illnesses, $154 for emergencies.

Even when we focus just on insured pets, whose families might be more likely to seek care, the financial risk from vet bills is rarely disastrous. The owners of 8% of Embrace’s insured cats filed claims for lymphoma in 2016, according to information that Embrace supplied to Checkbook, and the company’s highest-cost cancer claim was almost $15,000. But the average cost of cat cancer without insurance was a lot less … well … catastrophic: about $2,900.

At the same time, the owners of 17% of Embrace’s insured dogs filed claims for cruciate ligament injuries, and the insurer’s nightmare claim for repair of that was $21,047. But the average for that treatment without insurance was only $4,500, Embrace reported.

The most common claims are for minor problems. In 2020, the top five claims for dogs insured by Embrace were for such intestinal problems as diarrhea and vomiting, ear infections, allergies, urinary tract infections, and itching. The average cost of care without insurance to treat intestinal issues was $790; for ear infections it was $290, according to Embrace.

Bottom line: Pet insurance is expensive. Ignore the marketing hype and make the right decision for you. Don’t be swayed by the five-figure medical bills and huge insurance payouts claimed by companies. Those examples don’t include the high cost of premiums in their calculations, which makes insurance look like all purr and no hairballs. Carefully evaluate available coverage and how much it will cost you over your pet’s lifetime and decide whether it makes sense for your family.

Delaware Valley Consumers’ Checkbook magazine and Checkbook.org is a nonprofit organization with a mission to help consumers get the best service and lowest prices. It is supported by consumers and takes no money from the service providers evaluated.