Should You Get Pet Insurance: Is it Worth it?

The best and worst thing about pets is that they are so darn cute. It takes about 30 minutes or less to become totally attached to them, no matter how hard it is to house train or how destructive they can be. So when your cat or dog becomes ill or has an accident, most people will do anything possible to keep them alive and well.

But keeping a pet in good health can be a hugely expensive proposition. In addition to the cost of wellness visits for vaccinations and check-ups, here are just a few things that can go wrong and what you can expect to pay to treat them:

• Your dog eats chocolate: $1,276
• Your dog requires laser surgery for a bacterial infection in his eyes: $5,000
• Your dog or cat gets hit by a car: $4,000
• Your dog or cat needs emergency surgery for stomach problems: $6,980
• Your dog eats a tennis ball: $2,700

Given the high cost of veterinary technology and medicines, many pets rack up expenses far faster than their human owners. Such costs--almost all unexpected--can quickly wreck a personal finance budget. Hence the need for pet insurance.  Since 2009, the industry has boomed, scampering higher by about 13 percent every year. 

Is the Expense “Worth It”?

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

The alternative to medical payments, Maixner notes, can be grim.
"Some people can’t afford the treatment so they ask us to euthanize their pet. It’s absolutely horrible. 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.”
Other consumer groups believe it doesn’t make sense in many cases. They add up the premiums over the lifetime of the pet and conclude that most people aren’t going to incur that much in costly vet bills. “It’s common to pay $300 a year or more for pet insurance," says Robert Krughoff, president of Checkbook.org. "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.”

Sarah Kliff of Vox.com disagrees. “Consider, for a moment, the homeowners or renters insurance policy that you probably carry right now. I have one that I pay about $18 each month for, to cover my one-bedroom apartment in Washington. I've purchased renters’ insurance for about five years now and have never filed a claim. I've given the insurance plan about $1,000 and gotten zero dollars in return."

Does that mean renter policies are a bad idea? "Absolutely not," says Kliff. "I still believe it's been a good idea to buy financial protection against catastrophe."

The issue is a personal one.

“The important question I needed to answer before purchasing pet insurance wasn't about my dog Spencer," says Kliff. "It was about me. And it was a difficult question, too. How much would I be willing to spend to save my dog's life?”

Grant Biniasz of VPI Pet Insurance, believes such insurance should not be thought of as an investment so much as a way to manage risk. "If you look at any form of insurance and try to run the numbers," he says, "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.”

Without insurance, choices can be limited.

After three years of struggling with her cat’s medical problems, Valerie Rictor made the painful decision to put her pet to sleep. “I had to borrow money to fund my cat’s care," she says, "and I just couldn’t afford the more advanced treatments." So the cat was put down. "I wish I had that day back," she sighs. "When I was ready to adopt again, I got ASPCA Pet Health insurance because I vowed never to have to give up on treatment because of money.”

Currently, the major players in pet insurance are Trupanion, ASPCA, Pets Best, Nationwide, Embrace, and VPI. You can get one-stop shopping quotes from a variety of insurance companies at PetInsuranceReview.com. For a puppy or kitten, you can find a policy as low as $30 per month depending on the breed.

Here’s what to look for in a pet insurance policy:

• You can use any licensed veterinarian in the U.S. or Canada. You want to use your own doctor and not worry whether he or she is in or out of a network. You also don’t want to have to get a referral every time your pet needs to be treated.
• No requirements to get certain exams or treatments in order to keep your coverage.
• A short as possible waiting period.
• Pay by the month rather than the year so you can cancel at any time.
• Have 90 percent coverage of actual veterinary costs, less taxes and deductible.
• No caps on payouts.
• Coverage will never be canceled for age or health.
• The ability to choose your own deductible amount, even if it is zero.
• No co-pays.
• There are not separate deductibles to be met for each condition before insurance kicks in.
• A quick and easy claims process. Look for a policy where you don’t have to pay upfront and be reimbursed.
• No increase in deductibles, coverage or premiums because you filed a claim.
• No increase in premiums just because the pet gets older.
• Hereditary conditions covered.
• Coverage for surgeries, prescription pet foods, supplements, alternative therapies, hospital stays, diagnostic tests, medications, chemotherapy, and prosthetic devices.
• Customer care available 24/7.
• Coverage while traveling with your pet.
• Coverage if your pet is being treated and dies.

Above all, read the fine print! And remember the younger your pet is when you enroll the lower the premiums will be.

It is probably not worth purchasing a “wellness” plan to cover vaccines and regular check-ups. According to NAPHI, they are a lot more expensive than accident and illness plans, and your out-of-pocket costs are usually less than the insurance premiums. “Distemper shots and heartworm tests should be looked at as the cost of pet ownership, not as an insurable risk,” says Peter Glassman, director and surgeon at the Friendship Hospital for Animals in Washington, D.C.

A Happy Ending

Tina Cutler of Bridgewater, New Jersey, is pleased to report her dog Star is now six years old, thanks in part to a health insurance policy.

“When I adopted Star as a puppy I debated getting insurance because I figured I would invest in insurance when she was older." But a discussion with her veterinarian convinced her that if there was an injury or illness it could be costly and the company--in this case Trupanion -- would pay 90 percent per incident. "I decided then to buy insurance."

It was a good thing.

“Shortly after enrolling Star she became very ill," says Cutler, "and in the past six years, she has been diagnosed with numerous health issues -- incurable internal bacteria, IBD, allergies to food and vaccinations, bleeding ulcers, and inflammation of the gallbladder—all of which are now controllable with daily medications.

Trupanion has paid more than $28,000 in medical bills.

“Trupanion helped my doctors fight the fight because I didn’t have to worry about the financial end— I just focused on loving Star through it all," she says. "I planned for the 'what ifs' and it paid off. The doctors have Star on a plan that is managing her illnesses and as for Star—she is wagging her tail and playing every day."

Pets like people are living longer these days. Your odds of needing some kind of emergency care or treatment of a serious illness are probably pretty high for the life span of your pet. A reasonably priced pet insurance policy with as low a deductible as you can afford may be the best medicine for your cat or dog.