(Bloomberg Business) -- Americans are spending more than ever ontheir pets. The tally for 2014 is an estimated $58.5billion, according to the American Pet Products Association. Afterfood, the biggest amount—$15.2 billion—went to veterinary care.With MRIs, sonograms, and chemotherapy all on the treatment menu,the health costs for many pets can top what well-insured humans payfor their own health care.

That prospect has helped the pet insurance industry grow anaverage 13% every year since 2009. The number of insured petsrose 14.6% in 2013, to more than 1 million, according to themost recent figures from the North American Pet HealthInsurance Association (NAPHIA).

The nation's largest and oldest pet insurer,Nationwide-owned Veterinary Pet Insurance (VPI), administers525,000 policies, more than double what it wrote a decade ago. Andon Feb. 12, the fourth-quarter earnings of pet insurer Trupanion(TRUP) showed a 29% year-over-year jump in pets enrolled,to 218,684, and average monthly adjusted revenue per pet thatrose 4%, to $44.27.

Kelly Ray knows how quickly unexpected health-care costscan add up. Ray, a software marketing specialist at LodestarSolutions in Tampa, didn't have insurance on her first cat, a strayshe rescued as a kitten near her home. She figured the vetbills wouldn't be big and she wouldn't need insurance because thestray, which she named Gizmo, would be a house cat. Atage 4, Gizmo started having seizures and was diagnosed with abrain disorder.

Ray spent $4,000 on Gizmo’s initial diagnosis and treatment. Shehad to turn down additional tests offered by a pet neurologistbecause they would have cost an additional $3,000. The effects ofthe disease lingered until May, when Gizmo died at age 12. So whenRay adopted two kittens, Zinnia and Lily, in mid-2014, sheimmediately started shopping for pet insurance for them and for her16-year-old cat, Sunny.

“I wanted to mitigate my risk,” says Ray. “I did the costanalysis and figured it would take me five years to save up$3,000,” which she realized might only be enough to cover a singlepet health emergency. After shopping around, she found a policythat covered all three cats for $563.89 per year in premiums—afinancial decision she refers to as “a no-brainer.”

Choosing health insurance for your pets can beas challenging as sorting between the options for yourself.When deciding whether pet insurance is worth it, there are a fewthings to keep in mind.

First, it costs more to insure dogs than it does cats—$457 inannual premiums, on average, for a single accident and illnesspolicy versus an average $290 for a cat, according to NAPHIA.

Certain breeds will drive up your bill even more. Trupanionreports that large breeds such as Rottweilers, Great Danes, andBernese mountain dogs run up the highest premiums, while lap dogslike Shih Tzus and poodles cost the least to insure. Large breedsare genetically predisposed to expensive-to-treat conditions likehip dysplasia and cancer. So for a policy with a $250deductible on a male Great Dane puppy in the Boston area, Trupanionwould charge a premium of $66.07 per month. A Bostonian who owns aPuggle, which is a cross between a beagle and a pug, would pay just$39.29 a month for the same coverage.

When comparing quotes, pay close attention to the stringsattached to a deductible. They work the same as deductibles forhome or auto insurance—you’ll get a lower premium if you accept ahigher deductible. But many pet insurers levy separate deductibleson each condition. So, if Rex has to be patched up after a scuffleat the dog park and then needs emergency surgery to extract thepennies he eats the following week, you’ll be responsible formeeting two deductibles before the insurance on either procedurekicks in.

How you're reimbursed might differ from insurer to insurer, too."Some companies reimburse flat amounts, while the newer companieswill pay a percentage," says Michael Hemstreet, a Web developer whomanages PetInsuranceReview.com, where pet owners can comparepolicies.

Don’t be surprised if your premiums increase each year. It’sperfectly legal for pet insurers to hike premiums, which they maydo in anticipation of the fact that dogs and cats are more likelyto develop illnesses as they age.

Kerri Marshall, chief veterinary officer at Trupanion, says hercompany doesn’t raise premiums based on aging or claims experience,but it might do so to cover the expenses it incurs for providingthe coverage. “Sometimes regulatory fees in certain markets rise,but the most common reason is an increase in the cost of care,”Marshall says.

Unlike human health insurers, pet insurance providers don’t haveto cover preexisting conditions, and most won’t. Many companieswon’t write new policies for older pets, either, although that ischanging.

Ray says she chose Pet Plan because it was willing tocover her 16-year-old cat. The company also offered her amulti-pet discount of 10% for each cat she enrolled after the firstpolicy she purchased. She signed up all three cats foraccident-and-illness policies, which each have deductibles of $200per incident.

Be wary of insurers offering to cover “wellness” care such asannual vaccines and check-ups. The premiums on those policies aremore than double the cost of accident and illness plans, accordingto NAPHIA. In most cases, all you’re really doing is pre-paying forservices that might cost less if you pay out-of-pocket forthem.

“Distemper shots and heartworm tests should be looked at as thecost of pet ownership, not as an insurable risk,” says PeterGlassman, director and surgeon at the Friendship Hospital forAnimals in Washington. Ignoring such come-ons is a way to practice“wellness care” for your wallet.

Arlene Weintraub is a freelance writer in the New Yorkarea.

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