By Jennifer Zeberkiewicz
If you have a pet, you know he's part of the family and you'd do anything for him. You're definitely not the only one: In 2009, Americans spent more than $12 billion on veterinary care, in part because of the growing list of advanced medical procedures that can improve your pet's quality of life.
Statistics say only 1% of pet owners have health insurance for their pets, according to an Associated Press article. Many consumers don't understand what's covered. Insurance companies and customers disagree about what are reasonable and customary charges. And often the most expensive procedures, like chemotherapy and kidney dialysis, come straight out of the owner's pocket.
The pet insurance industry has little regulation. Legislators in California are trying to pass the first bill in the nation to make the industry more transparent about what policies do and don't cover.
pet insurance basics
When deciding if pet insurance is right for you and your pet, consider what you want to get out of it. Do you want to get insurance in case of an emergency or accident? Do you want to pay a certain amount each month for your typical yearly visit and preventive care—checkup, vaccines, dental cleaning, heartworm and flea control? Then, when you have a visit, you only pay about 20% of the charges.
Here are some things to think about as you decide:
- Not all insurers or policies are the same. Just as you would with your own insurance plan, read up on what's covered and not covered, annual out-of-pocket charges, co-pays, and deductibles. Check to see if there are lifetime limits on coverage.
- You get what you pay for. Cheaper policies tend to provide less coverage.
- You can keep your vet. As long as he or she is a licensed veterinarian, all pet insurance companies will allow claims.
- Pay up first; reimbursement comes later. You have to pay your veterinary bill and then submit your claim to your insurance company for reimbursement.
- Pre-existing conditions such as diabetes or cancer are not covered.
is pet insurance worth it?
Danielle Glasow, North Wilmington, Del., knows firsthand that pet expenses can add up. She has a female Chihuahua named Tiki who had two knee operations because of accidents. The procedures cost more than $6,000.
"I looked into insurance after the fact, but there were so many exclusions I didn't want to waste any more money," Glasow says. "What I needed covered wouldn't have been, or I would have been sitting around hoping that if something did happen, it would be on her good leg. If I get another pet in the future, I'll probably get insurance, but it seems like it's only worth it when you get it from the start on a healthy pet."
Mike Hemstreet, creator of the website PetInsuranceReview.com, agrees. "No pet insurance [plan] covers pre-existing conditions," he says. "If you wait until your pet gets ill or hurt, insurance won't cover your claim."
Suppose Tiki was healthy and never had a problem in her life. Glasow decides to take out insurance, but gets a policy that only includes coverage for accidents. Prices vary by location.
A few months later, Tiki breaks her leg. X-rays, surgery, and hospitalization costs $550.
Glasow pays $11 each month for basic Level 1 accident-only insurance. Her annual deductible is $100. The policy will pick up 80% of the rest.
Say Glasow instead buys the Level 3 plan for $53.25 a month. This includes accident-related and illness-related procedures, as well as routine care such as annual visits, vaccines, tests, spaying, and neutering.
Tiki has an accident ($550). She also gets her teeth cleaned ($65), her annual checkup and vaccines ($145), and medicine for an illness ($80). Glasow's annual veterinary expense is $840.
She pays $639 yearly for the pet insurance, $190 for the accident co-pay and annual deductible, $65 for teeth cleaning (not covered on this policy), $29 for Tiki's annual visit, and $16 for Tiki's medication and office visit. With her insurance, her total out-of-pocket expenses for the year total $939 (scenario No. 2). Without any insurance, she would only have paid $840.
What if Tiki's accident cost $3,000 (scenario No. 3)? Glasow's total yearly expenses, including insurance, are $1,449. Without insurance (scenario No. 4), she would have paid $3,290.
can you put a price tag on your pet?
Pet insurance, in part, means peace of mind, but you still can control some expenses by choosing a policy based on your needs and budget. Visit PetInsuranceReview.com to compare plans, read reviews, and get free quotes.
"I think most people assume all pet insurance works the same, but this is simply not the case," Hemstreet says.
The question of getting pet insurance doesn't have an easy yes or no answer. Many pet owners who have had pets with medical problems will tell you they wish they had purchased it. But it also can depend on the type of pet you have and how much disposable income you have. Do your research first to ensure that you're making the best decision for you and your pet.
A smart alternative to pet insurance is to self-insure by saving money in advance of need. That way, you accumulate funds you can use no matter what condition befalls your pet. And you won't be faced with loss of coverage if you can't maintain the premiums at some point. See a credit union account representative about setting up a special purpose savings account.