25 July 2017

American Spending on Pet Insurance

The latest statistics released by the ASPCA [American Society for the Prevention of Cruelty to Animals ASPCA], show that there are an estimated 78 million dogs and 85.8 million cats owned in the United States. Cat ownership is more popular than that of dogs, which happens to be the polar opposite compared to countries in Europe, Oceania, and Asia.

As the cost of living increases, it is interesting to note that Americans aren’t holding back spending the big bucks on their pets, where spending has increased substantially since 1994, from $17 billion to a whopping $67 billion in 2016. $28 billion of that was spent on pet food, followed by $14.7 billion in supplies/OTC medicine, $16 billion in vetrinary expenses, and a further $5.8 billion on pet services such as grooming and boarding.
In 2016, a study conducted by the American Pet Products Association (APPA) found the average spending for dogs was $1,549 and cats at $988.
Table: 2016 Average Annual Cost for Dogs and Cats

Dogs
Cats
Surgical Vet Visits
$474
$245
Routine Vet
$257
$182
Food
$235
$235
Food Treats
$72
$56
Kennel Boarding
$322
$164
Vitamins
$58
$46
Groomer/Grooming Aids
$84
$30
Toys
$47
$30
Total
$1,549
$988

The significant difference in ongoing cost for dog versus cat, has not deterred the popular uptake in pet dogs among Americans. Between 2012 and 2016, dog ownership has risen by 21 million (from 69 million to 90 million) whereas cat ownership has risen by 20 million (from 74 million to 94 million).
As Americans continue to pamper their pets, the highest annual cost is veterinary expenses, which accounts for close to 50% of annual expenses for dogs and 45% for cats.  In 2016, Only 1.4 million pets in the U.S. and Canada are covered by pet insurance equating to less than 1% of dog and cat pets in America.  

These figures are incredibly low when compared to Australia, where stats from Pet Insurance Australia reported that 19% of dogs and 9% of cats have pet insurance for their fur baby.
However, the popularity of pet insurance is on the rise, having increased from 680,000 policies in 2008 to 1.4 million in 2016.  A possible contribution to the increase could be a result of pet owners realizing the potential vet cost, or perhaps they are more concerned with their pet’s well-being. Also, pet insurance has quickly become one of the fastest growing perks being offered as an added employee benefit.
Of the 1.4 million pets insured, over 81% of pet dogs have both accident and illness coverage, as compared with only 14.6% of cats.  The average yearly policy price for dogs is about $473, and $285 for cats.  Both of these figures are less than the current annual spending on veterinary expenses which could potentially get reduced if pet owners decide to commit to pet insurance.
Vet costs are likely to become more expensive year by year as the average lifespan of pets increases.  Pet owners need to consider the potential veterinary cost for their pets so they can receive the best possible care.   A recent report by PetPlan, showed the average common claims be vehicular trauma costing $998, prostate conditions at $753, and fight wounds at $645.91.
Considering that 1 in 3 dogs require urgent medical treatment in the U.S., the chances of making a claim is higher than those of home/renter's insurance and car insurance.  Pet insurance should be something all pet owners consider in order to minimize the financial implications for families, and also to provide your pet with the best possible treatment and care when necessary.

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