Caring for our furry friends can get expensive, especially where their health is concerned. U.S. pet owners spent an estimated $18 billion on vet care in 2018, according to the American Pet Products Association. Broken down, the average dog owner spends anywhere from $116 to $417 each year on vaccines, routine care and heartworm testing and prevention, says Petfinder.
To offset these steep costs, over 2 million pets are currently insured across the U.S. and Canada. And that number is steadily rising, says the North American Pet Health Insurance Association.
But how exactly can insurance protect your pet (and your wallet)? Here's what you need to know.

What Pet Insurance Covers

Every plan is different, but most pet insurance policies are designed to cover accidents and illnesses. If your cat gets hit by a car or your dog develops cancer, your out-of-pocket costs without insurance could be in the thousands. The average bill for unexpected care typically ranges anywhere from $800 to $1,500, according to Petplan.

What Pet Insurance Doesn’t Cover

Routine visits and preventative care are generally out. The same goes for pre-existing conditions. Each company has its own criteria, so be sure to read carefully. Embrace Pet Insurance, for example, doesn't cover health issues related to breeding or pregnancy. Healthy Paws, another leading insurance carrier, has strict criteria around covering hip dysplasia. Do your research, as no two policies are alike.
Some veterinary practices, like Banfield Pet Hospital, offer wellness plans to help alleviate the costs of routine visits and preventative care. This isn't the same as pet insurance, but these options can certainly help ease the financial burden of keeping your pet healthy.

How Much Pet Insurance Costs

Pet insurance plans charge a monthly premium, which varies depending on the age and health of your pet. You'll likely have a deductible, as well. Once that's met, most plans will pick up a portion of your covered expenses, then kick the remaining balance back to you. Generally speaking, the higher the deductible, the lower the monthly premium. Some top-tier plans, like Nationwide's Whole Pet with Wellness plan, will reimburse you for 90% of your covered expenses.
Plans vary, but the average monthly cost of pet insurance is about $45 for dogs and $28 for cats, according to financial research company ValuePenguin.

Who Might Consider Pet Insurance

On average, dog owners will spend about $540 annually on insurance premiums; $336 for cat owners. Some may argue that socking extra money into your emergency fund might make more sense — you'll hope you never need it, but if you do, it's there. If diligently saving for an emergency that may or may not ever happen feels tough, pet insurance may be worth looking into.

Where to Buy Pet Insurance

ConsumersAdvocate.org recognizes Healthy Paws, Petplan, Petfirst, Embrace and Nationwide as leaders in the pet insurance space. Each company offers different levels of coverage at varying monthly premiums and deductibles. You can plug some basic information into their websites to compare customized quotes side by side.