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Pet Insurance: Here’s What Every Dog Owner Should Know

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While pet insurance is not new (the first pet insurance in the United States covered TV star Lassie in 1982), it is starting to become more popular. Some businesses are even starting to offer it as a benefit to attract and keep employees. Still, less than 1% of the approximately 179 million pets in America are covered by pet insurance.

So what exactly is pet insurance? How does it work? Is it a rip off or a chance to help you save your pet’s life without having to worry so much about cost? Will it help you to avoid having to choose “economic euthanasia” because you can’t afford treatment for your seriously ill or injured pet? Here’s everything you need to know about pet insurance.

What Is Pet Insurance?

Pet insurance is similar to human health insurance. It helps defray medical expenses incurred by injuries, illnesses, or genetic diseases (depending on what type of plan you purchase). The great thing about pet insurance is that you can go to any vet you want. There are no networks to worry about. One of the downsides to pet insurance is that they usually don’t work with your vet. Most of the time, you pay the vet bill yourself and are later reimbursed by the insurance company. If you don’t at least have enough credit or savings to cover an emergency vet bill of $2000 or more, pet insurance may not help you in an emergency.

How Does It Work?

Just like human health insurance, you pay a monthly premium. Premiums will vary based on whether you have a dog or a cat, what breed of animal you have, how old your pet is, your zip code (since veterinary expenses vary from location to location), and what type of coverage you purchase. Some plans may only cover accidents. Many plans cover accidents and illness, and some plans also cover genetic and breed-specific illnesses. On average, accident and illness plans start around $22 a month for dogs and $16 a month for cats. Your premium will usually go up every year as your pet ages.

Pre-existing conditions are almost always excluded, and a vet visit within the last year is usually required before signing up. There’s also usually a waiting period before benefits kick in, so if your pet gets ill or injured before the end of the waiting period, they not only won’t be covered, but that illness or injury may now be considered a pre-existing condition and won’t be covered once your coverage kicks in.

After the waiting period, if you pet becomes ill or injured, you will be responsible for a deductible ranging from $100 to $2500, depending on what type of plan you choose and which company you decide to go with. After that, the insurance company will reimburse you anywhere from 65-90% of the rest of the cost (note that some plans reimburse a flat fee and not a copay percentage).

Some plans include yearly or lifetime maximum benefits, which is one more reason to carefully consider each plan before picking one that best suits your needs. Pet Insurance Review has a chart to help you compare coverage between the most popular pet insurance companies in the United States that can help you start your search for the right plan for your pet and your family.

What Are The Pros And Cons?

Pros:

Comparing plans is easy. Pet insurance is much simpler to decode than human health insurance. Plans are fairly straightforward, and comparing coverage and costs between different companies is relatively easy. You can get a personalized quote from any company within minutes, making choosing an insurance plan for your pet much easier than choosing one for yourself.

Premiums can be low. Young, healthy pets on low tiers of pet insurance can have very low premiums. $22 a month for peace of mind that you’ll have help paying for any unexpected large vet bills is priceless, wouldn’t you say?

Deductibles are reasonable. With deductibles as low as $100, some of the stress of making emergency financial decisions when your pet is ill or injured can be removed. Healthy Paws Pet Insurance releases a yearly report of the most common reasons pets visit the vet and the most expensive payouts they had the previous year. Last year, a German Shepherd who was hit by a car racked up $23,043 of vet bills. The pet insurance company reimbursed the owners $20,515. This is an extreme example of how a deductible of up to $2500 can still save you several thousand dollars.

You choose your own vet. Since the pet insurance company reimburses you instead of working directly with your vet, you can take your pet to any vet that you choose without having to worry about whether or not they’re “in-network.” All you need to do is get the vet to fill out a section of the claim form and get a copy of the vet bill to submit to the insurance company.

You can do more for your pet. People with pet insurance coverage are more likely to take their pet to the vet than those without it. It’s also easier to decide how much money you can afford to spend to save your pet’s life when you know you can be reimbursed for a large part of the expenses. You probably tell people you would do anything to save your pet’s life – pet insurance helps you do just that.

Cons:

Premiums can be high. If your pet has a pre-existing condition, is older, is a breed with more common ailments than other breeds, or you choose a high tier of coverage, monthly premiums can exceed $50 a month. $600 or more a year for insurance coverage your pet may never need may not make the most sense in your exact situation.

You still have to pay up front. If you don’t have the savings or credit to pay those thousands of dollars of vet bills resulting from your pet’s illness or injury, being reimbursed after the fact becomes a moot point. Consider using the money you would be willing to spend on pet insurance and put it into a savings account to be used in the case of a veterinary emergency.

It doesn’t cover everything. On average, pet parents still pay 20% of the vet bills. Wellness checks, pre-existing conditions, and hereditary or genetic conditions may all be excluded.

Coverage may be limited. Many plans have yearly or lifetime limits on how much they pay, so if your pet suffers some extremely expensive problem, you may still need to pay thousands of dollars after the pet insurance has been maxed out.

It may not be worth the cost. Since wellness checks are generally excluded, a pet that remains generally healthy throughout its entire life will end up losing money to pet insurance rather than gaining anything. Like any insurance, you’re gambling on whether or not you’ll ever need it – but if you wait until after something happens, it’s too late.

Image source: Infographic list

So Is It Worth It?

It’s impossible to know whether you will save or lose money by getting pet insurance for your fur family. Pet insurance is really about the peace of mind of knowing that you won’t have to worry quite as much about the expenses if something terrible and unexpected ever happens. Could you wind up paying hundreds or thousands of dollars in pet insurance premiums and never wind up filing a claim? Yes. But knowing that you will be reimbursed for some of the costs may allow you to take that one extra step or try that one other treatment in order to save your pet’s life. It may mean the difference between “do whatever it takes to save my pet’s life” and “please don’t spend more than $X trying to save my pet’s life.”

If you do decide to enroll in pet insurance, you’ll get more bang for your buck the younger you can enroll your pet. Premiums will be lower and they are less likely to have pre-existing conditions that would be excluded from future coverage. Most pet insurance companies start coverage on puppies as young as 8 weeks, with a few starting as young as 6 or 7 weeks. Choosing the highest deductible you can afford will help reduce your monthly premiums.

Whether or not you decide to sign up for pet insurance, you should start a savings account to set aside for veterinary use. You never want to have to tell your vet that you can’t afford to save your pet’s life, and even with pet insurance, you still need to be able to take care of the vet bills as they occur. No one plans to have their dog slip out the door and get hit by a car or swallow something that can’t pass through their digestive system. In those instances, your pet can’t wait for you to beg, borrow, or steal enough money to cover their vet bills.

How Do I Sign Up?

In order to get quotes from various pet insurance companies, you’ll need to give them your pet’s name, breed, age, pre-existing conditions, and your vet’s name and contact information. Your pet must also have seen the vet within the last year. Sites like Pet Insurance Review can help you compare insurance companies before you decide which ones to start getting quotes from.

(H/T: The Penny Hoarder, NAPHIA, Daily Journal, Consumer Reports, Preventive Vet, Consumer Reports, Pet Insurance Review, Healthy Paws Pet Insurance, AVMA, NY Times)

Written by Jennifer Nelson

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