Pet Insurance 101

Does Pet Insurance Make Sense?

Pet Insurance 101
January 22, 2014

For most of us, our pets are more than just pets; they are beloved members of our family. Realizing this, insurance companies offer pet insurance to cover our furry family members in case of accident or illness. Do these policies make sense? From a pure cost-benefit standpoint, the answer is probably no. However, due to this strong emotional bond, many people don't think this coverage through.

The essential question is: how far are you willing to go to save your pet? Pet insurance can cost thousands of dollars over the life of an average pet, but treatments can potentially surpass that. A pragmatic approach can come to a screeching halt when the time comes to actually consider putting a pet down — especially if they are your children's pets — and regular bills in the high hundreds or even thousands of dollars are the result. If doing everything you can to save Fluffy or Rover sounds like your probable response, pet insurance may be for you.

Much like medical costs for humans, medical costs for pets have skyrocketed in part because capabilities are so much greater. MRI's, cancer treatments, urinary tract reconstruction, surgery to repair broken limbs (or to remove the sock your Labrador swallowed) — many conditions that used to result in reduced quality of life or a death sentence are now treatable at modern veterinary hospitals.

Most pet insurance is geared toward dogs and cats, but some insurers offer policies for birds and more exotic pets such as chinchillas, ferrets, lizards and potbellied pigs — even hamsters. (Hamster insurance seems excessive, but who are we to judge?)

As with insurance for humans, there is a wide range of policies available, featuring varying deductibles, co-pays and caps. Your premium corresponds to those choices. A typical cost range is $10-$40/month ranging from a emergency care policy covering accidents to a comprehensive insurance policy covering accidents, injury, illness, medications, and even wellness checkups and prevention programs.

Pet insurance does differ from human insurance in several ways:

  • Reimbursement Payment - Pet insurance is similar to property insurance in that you pay out of pocket and submit a claim for later reimbursement. (The same may be true in certain human insurance instances.)

  • Choice of Caregiver – Unlike human insurance with network limitations and surcharges for going out of network, pet insurance is universally accepted at the same price.

  • Pre-Existing Conditions – There is no ObamaCare for pets, at least not yet. Pre-existing conditions are rarely, if ever, covered. Chronic conditions and hereditary conditions, such as hip dysplasia in German Shepherds, are not usually covered, and if they are, the premiums are considerably higher.

As you dig into details and evaluate policies, be sure to understand what is covered (and not covered) in each to do a fair comparison. Consider the cap arrangement — caps may be lifetime, yearly or by incident type. Also check into any discount programs that may be available for multiple pets, and any assistance programs with medications such as heartworm prevention (medication costs, whether preventative or curative, can add up quickly).

In the end, if you decide pet insurance is worth the peace of mind for your family, be sure to check with multiple insurers to find a policy that best meets your needs and budget. However, remember that with or without pet insurance, your pet will benefit from preventative measures (again, just like humans). This means providing quality food, plenty of love, abundant exercise, and suitable flea and tick prevention. You should also keep it indoors when possible and on a leash when outside to stay clear of trouble spots (unless you have a cat — good luck with that!). Clearly, common sense precautions can help pets live longer without requiring expensive insurance premiums.

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