Wondering if pet insurance is worthwhile for your pet? Here’s an overview and some details to consider:

  1. Pet insurance is like any other insurance: There is a monthly or yearly basic cost, and a co-pay and/or deductible paid per-event. Just as human health insurance costs you “X” dollars per year and if you see the doctor with a health concern there will be a co-pay, pet insurance requires a basic monthly cost as well as a co-pay and/or deductible for a vet visit. These costs vary depending on your pet’s age and breed, typical cost for vet care per what area of the country you live in, and what kind of policy you choose. It is also possible that an annual or lifetime limit on payouts may be applied. Most companies have a website that can readily provide you with a price quote.
  2. There are two basic types of pet insurance: Indemnity and Major Medical. Not all companies offer both. Most pet insurance is meant to help a pet owner cover “indemnities,” which are the sudden and unexpected expenses of illnesses or injuries. Pet indemnity insurance is a lot like car insurance: if something goes wrong, a large portion of your bill is covered, but basic necessities are not accounted for. For a car, basic necessities are things like gas, oil changes, and routine maintenance. For a pet, basic necessities are things like annual wellness exams, vaccines, and parasite prevention products. Major medical insurance for pets is much like human medical insurance. Whether you go to the people-doctor or the doggie-doctor for an annual physical or because you are sick, a large portion of the cost is covered by your insurance. Because major medical insurance covers more of your expenses, it generally costs more per month and/or has a higher deductible.
  3. Unlike human insurance, most companies have you pay up-front and then be reimbursed by your insurer. With human insurance, we are accustomed to walking out the door after paying a small co-pay. Pet insurance generally does not work this way, though there are some exceptions. If your pet is hospitalized at a cost of $1200, you will need to pay your veterinarian this amount at the time of hospitalization. Your veterinarian will then help you submit a claim form, and a little while later, your pet insurance company should reimburse you some portion (or all) of this cost. How much is reimbursed will vary with each company, and some have more straightforward rules than others.
  4. Pet insurance companies typically do not cover pre-existing conditions under basic policies. Some companies will impose limits per-condition or per-lifetime. A more expensive policy or a buy-up may offer additional coverage. Some companies will also exclude certain conditions based upon breed. For example, bulldogs are prone to develop breathing problems due to the shape of their head and face. Given the high likelihood of any bulldog having breathing problems, a pet insurance company may exclude coverage of this type of condition for all bulldogs. Different insurance companies may offer very different coverage as far as hereditary (breed- related) conditions; be sure to research this in detail.
  5. You can use any veterinarian with any insurance. It helps if you bring a copy of your claim form with you so your veterinarian doesn’t have to puzzle out what kind of paperwork you need (they’re all different).
  6.  Your pet’s lifestyle may affect their likelihood of illness or injury, and therefore the type of insurance your pet should have (if any). An indoor-only cat doesn’t lead a very treacherous lifestyle; by keeping your cat safely indoors, you’ve ruled out scores of illness and injuries that might otherwise affect her. On the other hand, a Labrador puppy is a furball of trouble on four legs, and you should probably plan for a lifetime of sock eating, ear infections, torn toenails, wildlife encounters, and maybe even injuries from a tussle at the dog park. Some companies also offer coverage for exotic pets. Again, consider your pet’s lifestyle: Are they likely to be injured? An adventurous parrot whose flight feathers are not clipped can find himself in quite a lot of trouble, whereas a hamster’s life is generally far less perilous. Would the cost of treatment for an exotic pet affect your willingness to bring them to the vet if they become seriously ill?
  7. Your inclination to pursue more intensive measures is a factor to consider as well. Are you of a mindset to pursue specialist consults, advanced diagnostics, or intensive therapies? Would you elect to treat a pet supportively or palliatively through an illness that could not be cured? Some owners wouldn’t hesitate to have their dog anesthetized for an MRI or have a procedure done with an orthopedic surgeon, yet others feel this is a level of intensity they would not elect to pursue.
  8. You might be better served by saving up an “emergency fund” and skipping the insurance. If you are a person who can stick with a budget and is generally responsible about your finances, the best course of action is to save up an emergency fund BEFORE you adopt a pet, so that you can proceed confidently knowing you are ready for anything. An emergency fund of $2000 is a reasonable starting point, and with over $5000 you can cover the cost of many common emergencies and surgeries. More extensive measures such as advanced diagnostics, prolonged hospitalizations, or surgery with a specialist can easily exceed $8,000. Do these amounts sound terribly high? If that is the case, pet insurance may be a good choice for you, taking down your expenses to something along the lines of $30 – $60 per month. But if you saved that $60 per month, you’d have an emergency fund of your own in a few years.

If this all sounds entirely out of reach, we hope you will honestly consider whether now is the right time for you to adopt a pet. When you adopt a pet, you take on a responsibility for their care, no matter what life brings. As veterinarians, we wish the question of money was never an issue, but for many pet owners, it becomes a deciding factor. We hope you never find yourself in that terribly difficult situation, because it’s one we don’t want to face either!

You may also find policy comparison tools useful, as available at the links below:
Pet Insurance Review – PetInsuranceReview.com
Pawlicy Insurance Advisor – Pawlicy.com