Is Pet Insurance Worth the Cost?
30 May, 2018
pet insurance worth cost

By:  Lisa Fimberg

We love our cats and dogs like family and will do whatever we can to keep them happy and healthy. When it comes to their health, there is always the question of whether to purchase pet insurance.  Of course, we never want to be stuck with a big medical bill that we can’t pay, but do we want to spend money on something we might not need.  So, ultimately, is pet insurance is worth the cost?

What Is Pet Insurance?

Pet insurance is similar to human health insurance as it helps to alleviate some of the costs associated with medical bills.  Just like health insurance, you can choose different levels of coverage and pay a monthly or annual premium.

Different pet insurance plans offer different coverage and scenarios.  Some offer accidents only and injuries while others include injuries, and genetic or hereditary conditions.  The more comprehensive the coverage, the more ailments and/or conditions that are covered, but at a higher expense.  Take a look at what should be included in your coverage at a bare minimum in this chart from Consumers Advocate.org.

The Cost of Pet Insurance:

There are a quite a few costs associated with pet insurance which should be taken into consideration.  Pet insurance really is for the unexpected illness or medical costs that can become unreasonably high.   How many times will your dog swallow something he shouldn’t (like a tennis ball) or your cat swallows some yarn? This is when the cost of pet insurance is more than worth it as they can leave you with big, expensive medical costs!

Each plan has a deductible

Most pet insurance plans have a deductible which is the amount you pay out of pocket before the coverage starts on your policy.  Depending on the plan and policy you choose, the deductible typically ranges from $50 to $2,000 each year.  The higher the deductible, the more you will receive back on each bill.

Co-pay

A co-payment (or co-pay), is the percentage of the total medical expenses you pay once your deductible limit has been reached. For example, if your veterinary bill is $2,000 and you have a deductible of $500 and a co-pay of 20%, you would pay your $500 deductible and a co-pay of $300 (20 % off the $1,500 balance). Your insurer will then reimburse you $1,200 to cover the rest of the cost of treatment.  Depending on your policy and which reimbursement model you choose, you can get back from 20 to 100 % of the bill.

Reimburse for bills

Most pet insurance companies require that you pay your vet bill upfront, and then they reimburse you according to your coverage, usually between 70-90%.  Some plans will pay the veterinarian directly.

It’s important to make sure that the reimbursement is based on the final total costs of the bill.  Make sure to know what is covered in your plan.  Also, try to choose a plan that has unlimited coverage so you are not reaching a ceiling each calendar year should you have multiple incidents for your dog or cat.

The price of pet insurance

While individual costs will vary based on your pet’s breed, age, health, where you live and the policy you choose, the price of pet insurance can range from $25 to $70 for dogs and from $10 to $40 for cats. Dogs tend to be more expensive than cats.

Pros of Pet Insurance

There are many options and policies that you can choose from and cater to your needs

Unlike human insurance, which can be very difficult to navigate, pet insurance is pretty straightforward. Policies are simple, the different tiers are easy to compare, and you can get a no-commitment quote from different companies within minutes, making price shopping easy.  If you know what you want, you really can comparison shop to find the best deal.

Premiums can be low to start

If your cat or dog is young and/or healthy, or you choose one of the lower policy tier, you can get coverage for less than the cost of drinks at a restaurant (you would forgo that for your beloved dog!). The monthly or annual price is worth the peace of mind.

Deductibles are affordable for that unexpected emergency

Most plans have deductibles that are very affordable.  How happy would you be if your dog or cat had an unexpected emergency or illness that kept him in the emergency room and you had pet insurance!  Instead of shelling out almost $10,000, you can pay a $250 deductible, your co-pay and your pet insurance provider would pay 70 to 80% of the remaining portion of the bill!

Dogs or cats that have potential hereditary issues

If you have a Labrador, there is a good chance that your dog will need some sort of hip or limb surgery during his or her life.  With certain cat and dog breeds that have a pre-disposition for hereditary issues, pet insurance can certainly be worth the costs (not to be confused with those dogs or cats that already have pre-existing conditions that insurers won’t cover)

You can go to any vet or medical hospital of your choice

With pet insurance, there aren’t any “out of network” provider issues when choosing your plan. With pet insurance, you can go to any vet or medical hospital of your choice that is convenient and you don’t have to worry if your vet takes your pet insurance (as long as they are licensed). Since you pay the cost out of pocket, all you need from your vet is a copy of their invoice and for them to fill out a section of the claim form and then you will get reimbursed.  This can be really beneficial if you are traveling with your pet and they get sick.

Cons of Pet Insurance

Premiums can be high for older pets

If your pet is older, has a pre-existing condition or you choose a high tier, you could be looking at premiums of $600 or more per month.  And then, of course, there is the deductible and co-payment that you need to reach.  In this case, you will want to decide it he premium is worth it for you.

You have to pay the bills up front

Having pet insurance won’t save you from having to pay out of pocket immediately if your pet needs a costly procedure.   Unlike health insurance, you have to pay the bill and then get reimbursed.  You will get reimbursed (typically within 2 – 4 weeks) but still need to have cash available.

Pet insurance does not cover routine care

Even if you do have pet insurance, routine checkups usually aren’t covered, so you’ll still pay for those out of pocket. Certain hereditary/genetic conditions may also not be covered; be sure to check each policy’s specifics carefully.  If you are footing the premium each month, don’t be surprised when you got to get your dog or cat’s teeth cleaned and you have to pay the entire bill.  Most plans only offer dental care if associated with an illness or an injury.

Some pet insurance policies have limitations

Many plans also limit the amount you can claim, either annually or over your pet’s lifetime. If your pet is unfortunate enough to suffer a major medical problem, you could max out your plan’s limit pretty quickly and find yourself paying the difference.  If you do opt for pet insurance, go for a pet insurance provider like Healthy Paws that has unlimited benefits.

You could spend more on insurance than you pay in bills

If your pet is healthy and you don’t have any issues, you could spend more on pet insurance than in veterinary bills.  With the premiums averaging about $25 a month for dogs and $18 for cats, insuring your pet could mean $250 – $400 a year just for having it for a worst-case scenario.  In this case, the cost of insurance would be more than savings.  There are some providers like PetFirst who give you a healthy pet discount if you don’t make any claims during the year.

Is pet insurance really worth the cost?

With pet insurance, you won’t really save money in an average year.  However, if you have an unexpected emergency or large expense, you will be happy to have made the investment.  Pet insurance really is about the peace of mind and being prepared for a potential emergency or illness that is not expected.

While you may not get the most bang for your buck with a healthy pet, there’s no way to predict what illnesses or injuries might occur, and for many pet owners, knowing they have a safety net in place is value enough.  In fact, according to NAPHIA, those who do have pet insurance tend to go that extra step and extra vet procedures because they don’t worry as much about the costs.

How to find the best pet insurance for your dog or cat

If you do decide to get pet insurance, enroll your pet when they’re young when policies are cheaper and before they have any ailments. Talk to your vet to get an idea of your pet’s potential breed-specific health problems and see if they have a recommendation.  If you decide to choose catastrophic coverage (generally the best cost-to-savings option), spring for the highest deductible you can afford.  Make sure to go or a policy that has a high annual or even better unlimited benefit schedule.

Most policies have waiting periods, which means you can’t get coverage immediately following an accident or illness. If you think you’d be interested in pet insurance, apply now before you end up needing it.

Pet insurance is really beneficial for or cats that have a predisposition to chronic illnesses.  Again, this is breed specific and your vet can help you decide if it’s worth it.   On the other hand, if your dog or cat has a pre-existing condition, is older, lives indoors or is generally healthy, you might not need the extra expense.

In the end, it comes down to your budget and a combination of the following factors: your pet’s lifespan, the breed, how many vet visits (non –routine) you think you will take, if there is an emergency, and the type of coverage you decide to purchase.

Here’s a scenario where pet insurance does help.  If your dog lives 12 years, and your insurance premium is $25 a month for a basic plan, which doesn’t cover regular checkups or dental care. He has three procedures over the course of his life, which cost $2,500 each (very realistic!), and your deductible is $400.  This means you will have spent $3,600 on premiums and $1,200 in deductibles, for a total of $4,800, during the course of your dog’s life. In this case, you would have saved $2,700.

Therefore, pet insurance is ultimately for the unexpected because you can never predict what would happen to your dog or cat.  And, of course, you never want to be left with a huge medical bill and no way to cover it.  If you decide to buy pet insurance, make sure to take a look at our list of the 7 Best Insurance Companies of 2018 for your dog or cat.

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