Do I really need pet insurance?

How to think about the math

Pet insurance is a hedge against a small probability of a large bill. The expected value to the policyholder is usually slightly negative (insurers have to pay their costs and a margin), but the variance reduction is the whole point, it converts a $12,000 emergency surgery into a $50–80 monthly bill plus a deductible.

If you have $20k in liquid savings and could absorb an emergency without changing your life, skipping insurance and self-funding through a dedicated savings account is rational. If you couldn't, the insurance is buying you the ability to say yes to the vet without going into debt.

What to look for in a policy

• Accident and illness coverage (not just accident-only, illness is most of the spend over a lifetime).
• No payout cap, or a high lifetime cap ($25k+).
• Coverage of hereditary and congenital conditions if your breed is at risk (cruciate rupture, hip dysplasia, brachycephalic syndrome).
• No upper age limit on renewals, premiums rise with age but the policy must continue.
• Clarity on pre-existing conditions: anything documented before enrollment is excluded forever. Enrolling before symptoms appear is the entire game.
• Reimbursement model (you pay vet, insurer reimburses you 70–90%), not a network model.