Is Pet Insurance Worth It?

Does pet insurance make sense

Is Pet Insurance Worth It?

Americans love owning pets. The American Veterinary Medicine Association found in 2012 that 36.5% of households owned a dog, over 30% owned a cat, and thousands of households owned everything from rabbits to snakes. All told, roughly half of all American households have a pet of some kind.

What most people don’t think about is the cost of a pet. Part of the responsibility of being a pet owner is medical care for your animal—and depending on the animal and condition, that care can run into the hundreds or even thousands.

According to CNBC, , in 2014, pet owners spent approximately $15 billion on vet care for their animals—more than a quarter of the $58 billion of spending overall in the pet industry. Not all owners can afford to cover the expensive problems that their pets can develop over their lifetime. Pet insurance seeks to prevent that—but is it worth the cost?

What Exactly is Pet Insurance:

Interestingly, pet insurance isn’t quite exactly what you’d think it is; in fact, it’s structured more similarly to property insurance as opposed to health insurance. You must pay a premium to get coverage, and it comes with a deductible. If you pay a higher deductible, then you pay a lower premium.
Despite that, pet insurance works in much the same way as normal insurance generally speaking. Pet policies cover all or part of the cost of treating an illness or injury. You can opt for lifetime or non-lifetime coverage. A lifetime policy would be helpful for ongoing conditions while non-lifetime insurance is valid during certain time periods. Read this guide on LendEDU to learn more about what specific conditions are covered by pet insurance.

What are the Benefit of Pet Insurance?

Pet insurance does come with some great perks that that may justify the cost. Unlike the insurance you’re probably used to, pet coverage doesn’t have networks or HMOs. It’ll let you use any licensed vet in the United States, and some plans will even cover treatment by vets outside of the U.S. if you’re traveling.

While well over three-quarters of all pet policies cover accident and illness for dogs, a few plans offer coverage for cats and other animals. Some plans even cover preventive wellness care such as annual checks, flea and tick medicines, and shots for things like rabies.

All plans cover at least some of the vet bills associated with illnesses like cancer, genetic injuries like hip dysplasia, and breed-prone injuries like torn knee ligaments. That could mean being able to extend the life of your beloved pet even if he has a major illness or injury. That kind of security may be priceless to some pet owners.

What are the Drawbacks of Pet Insurance?

Not everything about pet insurance is amazing. They are reimbursement plans, not up-front pay. That means you’ll be paying the total cost of treatment, and the insurance company will reimburse you later—usually within 30 days. How much they reimburse, however, could be different than what you expected, leaving you with a bigger bill than expected.

In addition, just because you’re paying monthly premiums—which can vary widely based upon animal and breed—doesn’t mean you won’t also pay additional costs. You’ll still have a deductible and/or co-pay, and if your pet ends up with a very costly or long illness, you could reach the maximum payout of your policy. That means you could spend hundreds or even thousands in premiums, deductibles, and out-of-pocket expenses, investing weeks or months to treat your furry friend only to find that the insurance won’t pay for any more treatment.

Depending on when you start coverage and what types of problems your pet is prone to due to species or breed, you might find yourself never recouping the cost of all those premiums if you need to file a claim. Over time, the cost of the insurance adds up, and some pet owners would rather take that money and set it aside in a bank account or even in cash as a fund for “just in case.”
That might work well if you start saving right away and don’t have any major medical problems or accidents until your pet is advanced in years, but a rowdy puppy who eats the wrong thing or gets hit by a car can not only deplete any saved funds, but put an owner in a horrible position since they haven’t had time to save much.

The Conclusion of Is Pet Insurance Worth It?

Whether or not pet insurance is right for you isn’t a cut-and-dry decision. It’s one that needs to be made by you and your family based on the type of pet, breed, expected and potential medical costs over the course of his life, as well as your financial situation. These are some of the most common and impactful considerations when it comes to signing up for pet insurance.

By guest author, June. She’s a new blogger who’s recently taken an interest in pet insurance after considering a new puppy for the family.  June is the author of a personal finance blog