Should You Buy Pet Insurance?
Money Girl explains what pet insurance covers, the best places to buy it, and 5 tips to know if you should get coverage to protect your furry friends and your finances.
Laura Adams, MBA
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Should You Buy Pet Insurance?
If you love your pets as much as I love my yellow Lab, Dixie, you probably consider them true members of your family. Since no one wants to be caught in a situation where you can’t afford their veterinary care, you may have wondered if you should have pet insurance.
Although the right pet policy could help you cut veterinary expenses, not all policies are created equal. In this episode I’ll explain what pet insurance covers, the best places to find it, and 5 tips to know if you should buy coverage to protect your furry friends and your finances.
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How Much Americans Spend on Pets
According to the American Pet Products Association, Americans spent about $60 billion on their pets in 2013. Veterinary care makes up about 25% of that astounding amount, which is approximately $15 billion. And that number is expected to continue growing each year.
If you’ve taken a pet to the vet, you’ve probably experienced serious sticker shock from the cost of even minor issues. It can be scary to think about footing the bill to treat a major pet health problem.
One of my friends had a dog that used to eat her toddler’s dirty socks like they were liver treats. After socks kept mysteriously disappearing and her dog had a serious blockage, the intestinal surgery to remove nearly 20 baby socks cost several thousand dollars!
Whether you should buy pet insurance is a financial and an emotional decision.
Should I Buy Pet Insurance?
So, how do you know if getting pet insurance will end up costing or saving you money in the long run? When people ask me that question, my response is always the same: It depends.
Whether you should buy pet insurance is a financial and an emotional decision. It hinges on many factors such as your income, savings, risk tolerance, pet’s age and breed, how much you’d be willing to spend on a pet’s care, and the type of pet coverage you’re considering.
See also: How to Choose a Veterinarian
In a moment, I’ll give you 5 tips to know if you should buy pet insurance. But first, it’s important to understand what pet insurance covers.
What Does Pet Insurance Cover?
In general, pet insurance covers the cost and treatment of accidents, illnesses, and routine wellness visits. But not all services, medications, and treatments are always reimbursed; each carrier offers different plans.
Common exclusions include pre-existing medical conditions and breed-related diseases. Most plans require a vet to examine your pet and complete a health checkup form that you submit soon after enrollment.
Find out if there is a waiting period after you purchase a plan when certain claims wouldn’t be covered. Also make sure that you can go to any veterinarianthat you want.
When it comes to making claims, some companies pay a percentage of a covered cost and others pay a maximum amount per diagnosis only, after your deductible (which is the amount you must pay before benefits begin). Either way, you typically must pay a veterinarian first, and then file a claim for reimbursement.
Where Should I Buy Pet Insurance?
Some of the most well-known American pet insurance companies include:
Quick and Dirty Tip: Get free price quotes from several pet insurance companies and compare the coverage offered. That way you’ll know if you’re buying the best policy for your situation.
Depending on your pet, the coverage amount, and the deductible you choose, monthly payments typically range from $15 to $50.
And now, here are my 5 tips to help you decide if you should buy pet insurance:
5 Tips to Decide if You Should Buy Pet Insurance
Tip #1: You own a dog
Pet insurance is mainly for dogs and cats (but some insurers may also cover certain exotoic animals). However, dogs generally have more active lives, while cats tend to stay indoors much of the time. This difference increases the likelihood of a dog getting injured or being in an accident.
That’s not to say you should never get coverage for a cat. In fact, insurance plans for cats can be less expensive than for dogs.
Tip #2: Your pet is pre-disposed to certain health problems
Just like certain people are pre-disposed to specific medical problems, so are animals. Many breeds of dogs and cats are known to have hereditary factors that make them more likely to develop disorders or diseases that could be expensive to treat.
See also: The Trouble with Bulldogs
For instance, hip dysplasia is a condition that can cause painful arthritis of the hips in many dog breeds, especially larger ones.
Tip #3: You have a young pet
Although you may be able to insure a pet of any age, premiums are lower when they’re younger and healthier. Remember that pre-existing conditions noted by a vet could be excluded from coverage at any age.
As your dog or cat gets older, quoted rates will be higher. Some, but not all, policies automatically increase your rate as your pet ages. Additionally, having an older pet means you could be turned down for a new policy altogether. Some plans deny coverage for pets more than 10 years old.
Tip #4: You live in a big city
Where you live plays a big role in the cost of pet insurance. That’s because veterinarian costs are higher in major cities than in rural areas. So while a policy may cost more in a large city, it could pay for itself with just a few vet visits.
Tip #5: You don’t have an emergency fund
If you’re not financially prepared for a big vet bill, consider what you’d do if your pet needed unexpected medical care, such as an expensive surgery, chemotherapy, or medication. The sad reality is that many pet owners are forced into debt or to euthanize their pets because they can’t afford the cost of care.
Yes, it’s possible that you could pay more in insurance premiums than you get in benefits because your pet sails though life in perfect health. But the purpose of insurance is to manage potential risk and have peace of mind that your finances will be safe no matter what.
If you want the best for your pet but don’t have ample income or savings to pay for it, start building your emergency fund right away—or get pet insurance. You could always cancel a pet policy down the road after you beef up your emergency savings.
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Veterinary treating dog image courtesy of Shutterstock.
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.