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Is Pet Insurance Worth It?

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Thining about taking the plunge and buying pet insurance? Are you wondering it’s worth it? In this article, we’ll examine the pros and cons of pet insurance, and give you our take.

OK, let’s dive in…

According to the American Pet Products Association, Americans spent close to $20 billion on veterinary care in 2019. Vet care is the second-largest source of pet spending and is growing faster than any other category.

I know what you are thinking… why are people spending that much on vet care? How can I limit my pet’s medical bills?

Your veterinarian is not only the one sending you the bill but is also part of the reason why vet costs are increasing. As the quality of care gets better, your vet is able to deal with your pet’s health issues.

That means pets are living longer than ever before. A longer life expectancy means more vet visits and, in some cases, more complex care.

The result? Higher prices. In other words, there is a really good chance you could spend thousands of dollars pet medical care every year.

Does your dog try to eat everything in its line of sight? A foreign object in a dog or cat’s intestinal tract is terrible news. It will eventually lead to death. If something this unfortunate happens to your furry friend, you will be on the hook for x-rays to pinpoint the object’s location and surgery to remove it. This would cost you thousands of dollars.

 

SO, HOW DOES PET INSURANCE WORK?

Pet health insurance is like human health insurance, but for pets. It helps ease the cost of care and protects owners when vet bills start to pile up.

One significant difference is that your pet’s insurance plan excludes pre-existing, hereditary, and congenital conditions.

There are two main types of pet insurance:

  1. Accident and Illness: Covers medical care if your pet gets sick or sustains an injury.
  2. Preventive Care: Covers predictable and planned medical care.

 

IS PET HEALTH INSURANCE RIGHT FOR YOU?

The short answer is that it depends.

What does it depend on? Well, it mostly depends on your financial situation and the type of pet you have.

If you’re financially able to handle the monthly premiums, then having a pet insurance plan is absolutely a good idea. This way you are protected if your pet has a major accident or faces severe health problems.

On the other hand, if you have a pet that’s predisposed to breed-specific conditions like hip dysplasia, you’re vet costs will probably be above and beyond the average costs of a few checkups. I want to point out that some pet insurance policies and providers don’t cover breed-specific, or hereditary conditions. Fortunately for us pet owners, most pet insurance providers do cover these conditions.

Now getting back to whether or not pet health insurance is right for you.

None of us has a crystal ball. There is no way to know what health challenges your pet might face.

That means we also don’t know how much our pet’s care will cost in the future. For this reason, we think having a pet insurance plan is a good idea.

You don’t need insurance until you need it. With pet insurance, you can rest easy knowing you’re protected.

 

DOES THE TYPE OF PET I HAVE FACTOR INTO PET INSURANCE COST?

Yes, the type of pet you have does impact the cost of your pet insurance policy.

While most pet insurance companies only cover dogs and cats, the breed and age of pet directly impact the amount of your monthly premium and your deductible.

The older your pet, the higher the premium. Does your pet’s breed have a higher rate of certain health conditions? If the answer is yes, you will pay a higher premium… you get the point.

Let’s say you have a pet on the other end of the spectrum. It’s a puppy, and in good health without pre-existing conditions. With a pet like this, your vet bill should be limited to things like checkups and vaccinations for a long period of time, which means you won’t pay as much. In this case, you probably don’t want to pay hundreds of dollars in monthly premiums every year.

 

PET INSURANCE COST: HOW PREMIUMS AND DEDUCTIBLES WORK

Pet insurance premiums function just like auto or homeowners insurance ones. You pay your pet insurance provider a monthly premium and, in exchange, the provider covers a portion of your pet’s medical expenses.

The monthly premium amount depends on pet-specific factors like breed and age. It is also highly dependent on the deductible you choose. Remember, the higher the deductible, the lower the premium, and vice versa.

Monthly premiums are a sunk cost. In other words, you have to pay them every month. It doesn’t matter if, or how many times, you visited the vet.

Don’t forget that you decide the amount of your deductible, and you don’t have to pay it unless you visit the vet. You can increase your deductible to ease the cost of monthly premiums you pay.

 

Tip: Premiums are lowest for puppies and kittens.

Pet health insurance companies charge the lowest premiums for puppies and kittens. Some insurers will increase the monthly premium as your pet gets older. A higher premium might make your policy unaffordable. Before deciding on an insurer, make sure to ask if the premium will increase with your pet’s age.

 

WHAT TO KNOW ABOUT REIMBURSEMENTS: PERCENTAGES AND ANNUAL LIMITS

Most pet insurers will let you choose your reimbursement percentage. Some insurers will also allow you to select your annual reimbursement limit.

What is a reimbursement percentage? 

The reimbursement percentage is usually a flat 70%, 80%, or 90%. It represents the part of your bill that your insurer will reimburse you for after you’ve met your deductible. You pay a higher monthly premium if you select a higher reimbursement percentage.

What is the annual reimbursement limit?

The annual reimbursement limit is the maximum amount your insurer will reimburse you for each year. Some insurers offer an unlimited package only, while others let you select your limit. Remember that your annual limit impacts your premium, just like the reimbursement percentage. The higher the annual reimbursement limit, the higher the monthly premium.

 

Tip: You (yes you!) can reduce your monthly premium.

You can reduce your monthly premium by choosing a lower percentage or a lower limit or both. Keep in mind that the lower your reimbursement percentage and limit is, the higher your financial risk is. Measure the amount you’ll save on premiums and consider it in the context of your increased risk.

 

THE WAITING PERIOD AND PRE-EXISTING CONDITIONS

When you sign up for a new policy, there is a waiting period before your coverage kicks in. The waiting period typically lasts around 30 days and helps insurers protect themselves from insuring pets with pre-existing conditions.

A pre-existing condition is any injury, illness, or condition that you or your vet noticed before the end of the waiting period. It’s critical that you understand that it doesn’t matter if you didn’t know your pet had a pre-existing condition, or if you never went to see a vet for it.

Unfortunately, there isn’t a pet insurance company out there that covers pre-existing conditions. However, some insurers differentiate between curable and incurable conditions.

For example, Embrace will reevaluate your coverage if your pet has a treatable condition and is symptom and treatment-free for 12 months.

 

IS PET INSURANCE WORTH IT? OUR FINAL THOUGHTS

I’ve probably been preaching to the choir if you are a pet owner. You understand how expensive it can get.

Still, the majority of pet owners in the United States do not have health insurance for their pets, according to a recent Trupanion filing.

From our point of view, it’s unfair to boil the value of pet insurance down to simple cash spent and benefit received. It’s also tough to do that since, as we mentioned earlier, none of us has a crystal ball. We don’t know what will happen during your pet’s life or what health challenges they’ll face.

What we do know is that there is value in knowing you’re financially protected from unexpected and unfortunate events.

You’ll have to determine if the benefits (peace of mind included) outweigh the cost.

If you’re still unsure after reading this article, take your time and do the research. Talk to fellow pet owners and compare insurance quotes.