6 Ways to Save Money on Pet Insurance

How Much Does Pet Insurance Cost?

The average annual cost of an accident and illness plan is $749.29 for dogs and $386.47 for cats, according to the North American Pet Health Insurance Association (NAPHIA). Accident-only plans cost significantly less, averaging $193.29 per year for dogs and $110.03 per year for cats. You may pay more or less, depending on multiple factors.

Prices vary based on location, pet age, deductible, reimbursement rate, breed and insurer. Your credit scores may also affect your rates if your state allows insurance companies to use them when calculating premiums, though it's not common practice for pet insurance companies.

Learn more: Types of Pet Insurance

6 Ways to Save on Pet Insurance

Having adequate coverage can help you avoid making difficult decisions about whether or not to get the care your pet needs if they are sick or hurt. However, pet insurance premiums can be pricey. Here are some tips that may make purchasing a policy more budget-friendly.

1. Choose the Right Coverage

Different pet insurance plans cover different types of pet care. You can save money by avoiding coverage you don't need. Insurers generally offer three types of plans to choose from.

• Accident and illness coverage: Pays for treating illnesses (such as cancer) and injuries from an accident, such as being hit by a car or eating something that's toxic.
• Accident-only coverage: Pays to treat accidental injuries, including testing such as X-Rays, MRIs and bloodwork, necessary to diagnose your pet accurately. It doesn't cover illnesses.
• Wellness coverage: Pays for preventive care, such as vaccinations, to help keep your pet healthy. Wellness coverage is typically offered as an add-on policy that you can bundle with other types of coverage.

2. Comparison Shop

Many organizations, including traditional insurance companies like those that provide your homeowners and car insurance, specialty pet insurers and nonprofit organizations offer pet insurance that can help offset the cost of care. Shopping around can help you find the best coverage at the lowest available rate.

Carefully review the services each plan covers, policy exclusions, reimbursement rates and annual and lifetime maximums. They may vary between insurers even if you're comparing the same type of plan, so take time to look at all the details.

3. Raise Your Deductible or Lower Your Reimbursement Rate

Your insurance deductible is the amount you must pay out of pocket before insurance covers the rest of your claim. The plan's reimbursement rate is the amount the insurer pays for covered services after you've paid your deductible. Increasing your deductible or opting for a lower reimbursement rate—or both—generally results in a lower premium but increases your out-of-pocket expenses if you need to file a claim.

Be sure to weigh the benefits of a lower premium against the potential increased costs when selecting your deductible and reimbursement rate. Insurers usually offer multiple deductible options that may range from as little as $100 to as much as $2,500 and reimbursement rates of 50% to 100%.

Learn more: Here's Why You Need an Emergency Fund

4. Explore Discounts

Some insurers offer discounts that can help you save on coverage, including:

• Bundling: Insurers may offer a lower rate if you bundle pet insurance with an existing policy, such as your car, renters or homeowners insurance.
• Multi-pet: If you have more than one pet, your insurance company might give you a discount for insuring multiple pets. Savings vary by insurer, but usually average 5% to 10%.
• Employer: Before purchasing a policy on your own, check with your employer. Some companies offer pet insurance at a reduced rate.
• Military and senior citizen: Some companies offer discounts to senior citizens and members of the military
• Group membership: You may qualify for a discount if you're a member of certain organizations, such as AAA or the National Education Association.

Tip: Insurers may allow you to combine discounts for even greater savings.

5. Enroll Your Pet Early

Nearly all insurers exclude coverage for preexisting conditions. Purchasing insurance early in your pet's life helps ensure conditions they develop as they age will be covered. The longer you wait to insure your pet, the more likely they are to have suffered an illness or injury that will be excluded.

Many companies also have age restrictions. If your pet is over a certain age, providers may not insure them.

Tip: It costs less to insure a young pet. But even if you enroll your pet early, your premium is likely to increase over time because older pets are more likely to require care.

6. Stick With the Same Provider

It may seem counterintuitive, but sticking with the same insurance company might help you save on coverage. Once you have a policy in place, remaining with the same company prevents preexisting condition exclusions. If you change providers, any medical issues your pet has experienced will likely be considered a preexisting condition. Treatment for it won't be covered, leaving you to pay for it out of pocket.

Staying with the same insurer also avoids restarting your policy's waiting period. If you purchase a policy with a different company and your pet gets sick or hurt during the waiting period, the new insurer won't cover it. Depending on the health challenge, it may be considered a preexisting condition and future treatment will also be excluded.

Learn more: Pet Insurance Mistakes to Avoid

Is Pet Insurance Worth It?

Pawlicy Advisor reports 1 in 3 pets needs emergency treatment each year. If your pet experiences a medical emergency, the cost of your plan will likely pay for itself. A three- to five-day hospital stay could set you back up to $3,500, and emergency surgery can cost $10,000 or more, depending on the type your pet needs.

But if you're one of the lucky pet owners who doesn't experience an emergency, you could be paying premiums for years and never use your plan. To help you decide whether pet insurance is worth it, here are a few things to consider before purchasing a plan.

• Your finances: If you have a sizable financial cushion that can cover an emergency medical expense, purchasing a plan may not make sense. However, if a vet bill would negatively affect your financial health or require you to take on high-interest debt, pet insurance can provide a financial safety net.
• Your pet: Some breeds are more likely to experience health challenges than others. If your pet is at an increased risk of certain conditions, pet insurance may make sense. Just make sure the plan you choose doesn't exclude coverage for hereditary conditions. If your pet already has a preexisting condition, buying a policy may not be your best option because the insurer won't cover treatment related to it.
• Coverage: Covered services, reimbursement rates and annual and lifetime maximum payouts vary by plan. Compare how much you might save with the cost of a policy.

The Bottom Line

It's not cheap, but pet insurance can make treatment more affordable if your pet gets hurt or sick. When opting for coverage, you need to make room for the monthly premiums in your budget. If the cost feels overwhelming, consider an accident-only plan, which can help protect against some emergencies but is considerably less expensive than an accident and illness plan.

Pet insurance policies typically require you to pay vet bills upfront and file a claim to get reimbursed. Even if you buy insurance, you'll need a way to pay if your pet requires medical attention. Setting up an emergency fund or pet savings account to cover unexpected pet care costs can help ensure you're prepared.