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Do you have a pet, or are you thinking of adding a furry friend to the family? If so, you’ll be in good company: 70% of U.S. households have a pet, according to a recent American Pet Products Association National Pet Owners Survey.

As cute as pets are, they’re a financial commitment. Americans spent $103.6 billion on their pets in 2020 alone, APPA said.

Some expenses, like food and shelter, are predictable. But if your new puppy or kitten gets sick or injured, an unexpected medical bill can derail your budget.

For a growing number of Americans, pet insurance helps provide peace of mind.

The cost of veterinary care

Medical issues are almost inevitable for pets, and costs are likely to rise, said Kristen Lynch, executive director of the North American Pet Health Insurance Association, or NAPHIA.

“The fact that there’s continued innovation in the medical care of pets — just like there is for humans — means that the cost of those innovations will continue to go up.”

Dog owners spend an average of $242 on routine visits and $458 on surgical visits each year, according to APPA. The cost for cat owners is slightly lower, at $178 for routine visits and $201 for surgical visits.

“I’d say at least half of the clients I come in contact with have money concerns,” Dr. TB Thompson, a Phoenix-based veterinarian at Natural Pets HQ, said in an email. “When pets get into complicated, life-threatening medical trouble, costs add up fast.”

Pet insurance won’t reimburse you for every penny you spend at the vet, but it can help prevent you from being slapped with an expensive bill.

A policy will typically pay 70% to 90% of your costs after you pay a deductible, which can range from $0 to $1,000 or more.

“Consider buying pet insurance unless you can easily fund treating a pet emergency that costs $2,500 and up,” Thompson said.

Several types to consider

There are a few types of pet insurance plans. Comprehensive plans, the most robust, help cover the cost of care due to accidents, illnesses and surgeries, as well as vaccinations and diagnostic tests.

Accident and illness coverage helps pay for emergency care, surgeries, hospitalizations and prescription medications, while accident-only policies help cover expenses after an accident.

Some insurers also offer wellness plans, which take care of certain tests, exams, vaccinations and preventive treatments.

While pet insurance can stop you from dipping into your savings to pay a vet bill, it is an added cost.

The average cost of an accident and illness policy is $594 per year for dogs and $342 for cats, according to NAPHIA. For an accident-only policy, you could pay $218 for dogs and $134 for cats.

Premiums are based on a range of factors, including:

• Where you live. The cost of veterinary care varies by region.
• Species. Dogs are more expensive to insure than cats, for example. Coverage for other types of animals is rare.
• Breed. Some breeds are predisposed to medical conditions, which can increase the cost of coverage.
• Age. As pets age, they’re more likely to become ill or injured, Lynch said. Keep this in mind if you plan to adopt an older pet from a shelter.

Suggestions for new owners

As a new pet owner, many of these factors are out of your control. But there are a few things you can do to score a lower premium.

Look at the fine print. Consider choosing a higher deductible and lower reimbursement level.

Check for discounts. Some companies offer discounts for insuring multiple pets or for military service.

Shop around. There are around 20 pet insurers in the U.S. competing for your business, so let them. Compare quotes from three insurers for the same amount of coverage, and go with the best pet insurance company for your budget.

In Lynch’s view, some pet insurance is better than none. “People avoid taking their pets to the vet because they’re afraid of what those costs will be,” she said.

“I like to think pet insurance gives us the ability to say ‘yes’ to those decisions at a time when we’re emotional, stressed and financially strapped about other things.”

—AP/NerdWallet