Pet Insurance - is it right for you?

This is a very interesting question. I personally do not have pet insurance for my dog but thankfully my doggie has been pretty healthy his whole life.  This is not to say that everyone can say that.

In order to answer the above question I did a little research to help you decide or at least think about, whether pet insurance is right for you.

A recent survey by the Associated Press found that a significant number of pet owners (41 percent) are extremely or somewhat worried they could not afford the medical bills for a sick cat or dog.

“If you get the right policy, it can be an asset to the health care of that pet and have a significant impact on the bill that results from a visit in an emergency situation” says veterinarian Jean Maixner, co-owner of Animal Critical Care & Emergency Services in Seattle.

“Some people can’t afford the treatment so they ask us to euthanize their pet. It’s absolutely horrible,” Dr. Maixner says. “If people had acquired pet insurance before the emergency occurred, they might have been able to move forward with some reasonable treatment to help their pet.”

Consumer groups have a different take on pet insurance. Robert Krughoff, president of Checkbook.org, says “it doesn’t make sense” in most cases.

“It’s common to pay $300 a year or more for pet insurance. Over the life of a dog or cat that might be $5,000 or more. Most people are not going to have a big expense like that,” he says.

Consumer Reports compared the cost vs. payout of nine pet policies for Roxy, a healthy 10-year-old beagle who lives near the magazine’s office in Yonkers, N.Y. Roxy’s lifetime vet bills have totaled $7,026 (in current dollars). In every case, the total premiums that would have been paid to those insurance companies were higher than Roxy’s medical bills.

When the editors gave Roxy a few hypothetical medical problems to boost her vet bills to $12,685, five of the nine policies would have paid out more than they cost. A Seattle company called Trupanion did the best in this scenario.

“Our conclusion is that for a generally healthy animal this insurance is probably not worth the cost,” says senior editor Tobie Stanger.

Consumer Reports believes it makes more sense to put a couple of hundred dollars into a household emergency fund each year for serious pet health issues.

Both Consumer Reports and Checkbook advise against buying insurance to cover routine wellness care. They say this is an expense you should be able to cover on your own. And I agree.

“It’s just crazy to pay an insurance company to just turn around and pay the vet,” says Checkbook’s Robert Krughoff. “Why not pay the vet directly and avoid all the overhead and sales costs from the insurance company.”

Pet insurance companies argue that it’s impossible to tell if your furry friend will be healthy or have a serious illness or accident during its lifetime.

“If you’re independently wealthy, you can roll the dice,” says Darryl Rawlings, Trupanion’s CEO.

Rawlings points out that 1 in 10 people who are insured by his company make a claim for their pet every month. He says some customers get back 500 to 700 percent more than they’ll pay for premiums during the life of their pet.

At VPI, the oldest pet insurance company in the country, spokesman Grant Biniasz points out that pet insurance is not a savings account.

“It’s a way to manage risk,” Biniasz says. “If you look at any form of insurance and try to run the numbers, you’re going to find that most people are not going to get back what they pay in premiums. But the people who do are happy they made the investment.”

If you do decide to get insurance, it is best to shop around.  Pet insurance policies vary greatly from company to company. The only way to know what you’re buying is to get a copy of the policy and see what’s covered – and more importantly, what’ not.

“Look very carefully at the fine print so that you’re not surprised when you file a claim and find that it’s denied,” advises Consumer Reports editor Tobie Stanger.

You need to know:
Is there a physical exam required to get coverage?
Is there a waiting period?
What percentage of the bill do they pay — after the deductible?
Are payments capped in any way?
Are there co-pays?
Does the plan cover pre-existing conditions?
What about chronic or recurring medical problems?
Can you choose any vet or animal hospital?
Are prescription drugs covered?
Are you covered if you travel with your pet?
Does the policy pay if your pet is being treated and dies?

Most policies do not cover congenital or hereditary conditions. Trupanion covers both (with some limitations). That’s a big plus.

Whatever your decision may be it is a personal decision and one that you and your family must make together.  If you do buy insurance and never use it, you are very lucky, but remember pets are living longer now so the longer your pet lives the more likely you will end up using that insurance at one point in your pets life.