Written by: Kelly M. Lewis, CFP®, JD, LLM
Did you ever read that article about a couple who almost cancelled their wedding because the future husband secretly spent over $5,000 (from his own savings) on surgery for his dog, and the future bride was furious because that meant she was going to have to downsize her wedding?
How, you ask, could all of that have been avoided? Pet insurance! Like any other type of insurance, paying for pet insurance is a gamble that you actually don’t want to win. You pay monthly for many years for a plan you hope you don’t have to use for your pet, while still having that feeling of comfort in your back pocket.
Now, personally, I would have spent the money on my dog over a wedding in a heartbeat, but different people have different priorities. Some can afford a major lump sum vet fee, but many cannot. Over 40% of Americans cannot even afford an emergency that costs $1,000. Pet insurance can help you avoid some very difficult decisions, such as giving your dog up to a rescue because you can’t avoid surgery or even having to put a pet down too soon. That’s difficult for me to even write, let alone think about.
Let me tell you a little bit about my personal experience with pet insurance. I have a 5 year old French bulldog named Rosie. She is the love of my life and spoiled as such. Her life is motivated by food and she has a huge mouth, literally! Her big mouth gets her into trouble quite often.
I have had pet insurance almost since I got her as a puppy and have used it 3 times so far. Yes, three! Once, she broke her leg playing tug of war, and twice she has eaten something she shouldn’t and required x-rays, anesthesia, hydration packs (which made her look like a chunky buffalo), and even surgery to get the item out of her stomach. After the surgery, the vet told me that she had no idea that a dog could swallow a piece of a tennis ball that big! No more tennis balls that smell like bacon for Rosie!
Needless to say, the pet insurance that I pay for monthly, has already paid itself off. And if I’ve used it 3 times in 5 years, there is no telling how many more times I will need it in her lifetime.
I personally use Healthy Paws pet insurance. I pay $33 per month for a 90% reimbursement rate and a $500 deductible. Let’s assume Rosie has a 13 year lifespan. That would make my total payments to pet insurance about $5,148. While I have already submitted 3 claims to them and received nearly $5,000 back into my pocket, it is already worth it. And I don’t have to worry about shelling out $5,000 all at once for a surgery that could break the bank, as the saying goes.
There are several pet insurance companies out there that all have different variations and levels, so here are some things to keep in mind as you choose:
- What is the reimbursement rate you are looking for? 70%, 80%, 90%. The higher the reimbursement percentage, the higher the premium.
- What deductible can you pay out of pocket? $250, $500, 0r $1,000? Choose one that you can afford out of pocket without stressing your own bank account.
- Read the coverage of the policy first. There are some catches and exclusions to be aware of:
- Most pet insurance companies do not cover pre-existing conditions. They require vet records and if your pet has been treated for a condition before, they likely won’t cover it.
- Many of the policies do not cover the cost of the vet visit itself. The fee for seeing the vet is not included, but can count toward the deductible.
- If pets are put on a special diet, the food may not be covered.
- If your pet develops a chronic condition, they may increase premiums or drop coverage.
There are many types of breeds out there that have tendencies toward certain injuries. The one I can think of is golden retrievers tend to get hip dysplasia that can be costly to manage. If you have a pet that may have conditions associated with the breed, looking into pet insurance might be a good idea.
I’ve made my case for having pet insurance, and I do believe it can be worth it especially if you have a pet that likes to get into trouble, like I have. However, I would be remiss if I didn’t mention some of the cons.
In many cases, unlike mine, you may not ever end up using the pet insurance because it is really more for catastrophic accidents like broken legs and ingesting bacon-scented tennis balls. It is not for routine care. This is very different than human health insurance. There is a possibility that you will end up paying $5,000+ in premiums over 15-20 years and never using it. That’s a lot of money to spend if you never use it. The alternative is, of course, to budget for pet emergencies. If you have an emergency savings built up, that could be a good alternative to pet insurance.
You also want to do your research when choosing a company to make sure there are no limiting exclusions that may make pet insurance for your pet not worth it.
As you can tell, I personally appreciate paying a small fee each month that I can budget for in order to have the comfort of protection of insurance for my Rosie. I get to save my emergency fund accounts for other emergencies that are not covered by insurance. But that decision, is up to you!