Save Your Dog Or Break the Bank – Is Pet Health Insurance Really Woof (Worth) It?

My wife loves our boxer Klaya. So much that I know that we would go broke if something ever happened to her. There would be no expense spared to make sure that she’s okay. None.

My wife is not the only one.

I had a set of clients that loved their dog. They loved it (her, him, whatever) so much that went it got ill, they drove the dog 3 hours to see a dog specialist. All in all they spent over $3,000 on medical bills trying to fix the dog. Unfortunately, it was all for not.

Knowing this prompted me to at least investigate purchasing pet health insurance. I know. It sounds absurd. Insurance for your dog? (Feel free to replace dog with cat, parrot, llama, hamster or whatever your favorite pet is) It almost sounds like the opening line for a comedians stand up routine.

Pet health insurance is an interesting industry, no doubt. The target audience for the pet insurance companies is the families who are devoted to their beloved pets, just like my wife. The question remains:

Is pet health insurance really necessary?

A little more than 150,000 pets are insured and DVM NewsMagazine reported the “stop treatment” threshold for most people is roughly $1,400 in pet health costs. What’s more, a recent analysis by Consumer Reports magazine concluded that pet insurance may not be beneficial to some whose pets never encounter a catastrophic experience.

The Pitfalls of Pet Health Insurance

In most cases, pet owners do not think to investigate pet insurance during the youth of their pet’s life. Instead, medical coverage only becomes a thought as your pet ages and begins to rack up expensive vet bills. For older animals, most insurance carriers won’t even insure for health coverage and if they do it is at considerable cost. The only kind of insurance available may be accident insurance. While incidents do happen, it is likely your pet will not be involved in any accident worth insuring against.

The reality of pet insurance is in most cases pet owners will pay more money in insurance premiums than they would pay for regular pet care if your animal does not generally require care beyond regular check ups. But even in a health crisis where more serious procedures are necessary, pet insurance policies come with a lot of fine print legalese. Most pet owners with insurance end up paying way more cash with insurance than without.

Cheap Premiums, Or Is It?

While pet insurance premiums are often advertised as very low cost (who can’t afford just $10 a month?), the reality is that the supposedly small premiums over a period of time add up to the thousands. In addition to the premiums you pay monthly, you also must pay out of pocket up to the deductible amounts, pay the co-pays for visits, and foot the bill for any services excluded from coverage. Can you say “Cha-Ching”?

What Does Pet Insurance Cover?

Curiosity got the best to me, so I had to get a sense of how much pet insurance really cost and what it covered. Many articles I read stated the cost was $10-$15 per month. One site that specialized in pet insurance advertised that their rates started at $19.95. Wait, starting at $19.95? How expensive is it? And what does it really take care of?

I found myself Googling “How much does pet insurance cost” and I selected the first site that looked legit. It was really easy to request a quote. You just need your pet’s date of birth, type of pet, your email address and/or phone number and your off to get free quote on pet insurance. The site that I went to offered a premium insurance coverage plan for your pet and a basic. (Of course, the premium was marketed as the “better deal”).

As you go through the process they inform you of what is covered and break it down into three categories: accident, illness, and hereditary conditions. When go through the lists under each category, I was pretty surprised on the numerous items that were covered. Under the accident category, for example, included: attacked by another animal, broken bones, electric shock, fractured teeth, insect bites or stings. I could easily relate to the last one since our first boxer was stung by a bee in the face. We both had serious panic attacks when her face swelled like a balloon.

Here’s a look at some plan comparisons:

cost of pet health insurance

How Much Is Pet Insurance?

When you reach the final step, you then select your annual deductible to see what your monthly premium would be. For the premium plan and a $100 deductible. The monthly premium would be $51.47 per month. For the $500 annual deductible (not shown), the monthly premium is $36.63 per month. Remember this is for the premium plan. For the basic plan, a $500 annual deductible is $28.31 per month.

FYI, these numbers are based on a boxer that was born in 2003 (7 years old) for my zip code. Curiosity once again getting the best of me, I checked the rate for a 7 year old German Shepard and the rate was the same. A 7 year old Siamese Cat was $34.16 for the premium plan and a $100 annual deductible. I knew there would be some cat lovers out there so that one was for you. :)

Disclaimer: I have no idea what the difference is on the two types of plans- what’s covered vs. what is not. You would need to speak with them or any other company that specializes in pet insurance to determine if its suitable for you.

Views on Pet Health Insurance

Curious to see what other pet owners thought regarding insurance. I asked if they would ever consider purchasing health insurance for their pet. Here’s what two of my friends thought.

Probably not. I love my pets (past and present), but I don’t think I spend that much on pet care. If there was something wrong I think I would pay for it out of my pocket.

Another friend had this to say,

Absolutely! When a pet gets sick, its usually over $300 to just get a diagnosis after an office visit, blood work, ex-rays, urine test, etc, etc. Then the treatment itself is another big expense. My Shepard’s antibiotics alone for a 2 week supply was over $200. Then there is the monthly cost of flea/tick, heart worm medication, and yearly vaccines. The cost of vet care deters people from it and in the long run, the animals suffer. Veterinarians who are suppose to care for animals should actually think about the positive effect this could be all the way around, emotional and financial (as long as it doesn’t turn into what kind of health care humans get).

Reaching out to the blogging community, I was able to get these two responses.

Young and Thrifty from the self titled blog commented, “I did buy it and I canceled it because everything was considered “preexisting” to them

Another blogger My Journey to the Millions says, “I have pet insurance and I am pumped that I do. Chalk it up to a cost of not having to make the decision what is too expensive?”

A Better Option

Spending thousands of dollars over your pet’s lifetime for something that ‘might happen’ realistically does not make sense, especially for budget-conscious people. A better alternative for planning ahead for the medical needs of your pets would be to set aside an amount each month equivalent of a premium payment into a savings account with high-interest earning potential. Not only would the money saved be valuable at the time of a pet emergency, the funds would not be lost to an insurance company if it is not used.

Closing Thoughts on Pet Insurance

In the end we decided to pass on pet insurance. Our boxer has had a few routine checkups but nothing that we couldn’t just pay cash for. Right now our focus is to continue to boost our savings/retirement and our kids college education.

Update:

I received a contact from a representative from Pets Best Insurance.  I thought it provided some useful information, so I wanted to include it.

Admittedly, I’m not an unbiased commentator—I work for Pets Best Insurance.  While self-insurance, as you suggest, may be a viable option for many people who have access to a cash reserve of several thousand dollars, it may not be a good approach for those who do not.  There’s no guarantee that a pet won’t have a serious illness or accident early in its life, well before a sufficient reserve has been set aside to mitigate some really hard choices.  Our experience indicates that pets, puppies especially, do have significant vet bills early in life (puppies owing to a propensity to eat anything and everything around).

Another commenter had this to say,

Jeff, this is a great topic for you to cover and I think you took a closer look at it than most people do. But I do have a different perspective. I insure three cats via PetPlan. The policies costs just $65 *annually* for each cat, with $200 deductibles and 20% co-pays, and a maximum benefit of $8,000 per year. As any insurance shopper should, I looked around at a lot of policies and I read the terms in full. Specifically important with pet insurance is to look at future coverage guarantees (you don’t want the company to be able to drop you for using the policy), future pricing guarantees (you want a guarantee of standard rates for your pet’s age, regardless of events occurring since coverage was initiated), and coverage for ongoing treatments for chronic conditions like arthritis.

Like most insurance, you can’t wait until there is a problem or until problems are statistically likely to occur. Once a cat or dog gets beyond about 5 years of age, the cost of a new insurance enrollments starts to get very steep. I insure because diagnosis alone can be very expensive, and it’s hard for me to put a pet to sleep without one. I also insure because I think we undersell our pets in our financial reasoning. I am willing to spend a decent chunk of money to keep my pets alive and healthy, and I make that decision in advance via insurance premiums because it is easier and more manageable.

I think the negative reaction to pet spending, and pet health spending in particular, is due to people’s inability to see money for what it is: liquid effort. Nobody would expect a pet owner to put their pet to sleep rather than spend 30 minutes a day applying a special ointment or preparing a certain food. But 30 minutes a day for a year is the time equivalent of a month spent at an 8-5 job! In other words, 1/12th of the average person’s annual income-generating effort. If you wanted to, you could spend that time generating income and bring in an extra few thousand dollars during the year.

Another advocate for pet insurance had this to say,

I have Pet Plan insurance and love it. No it doesn’t cover preventative care, which is a lot of money, but it does cover just about anything else you dog can get himself into. Now, I didn’t get it for my dog when I first got him, which was the mistake. He now has a preexisting condition for allergies. However, Had I gotten it before that issue arose, I would have already made bank of his health insurance. I have used it a time or two otherwise when he has gotten worms, etc.

I think it just depends on the pet, their hereditary conditions and likely hood, and how crazy of a puppy you have and what he is going to get himself into.

The KEY KEY KEY thing her is to do your research!!!! There are large differences between the plans. you have to decide what is important to you. there are also consumer ratings out there for the various providers that you will definitely want to take a look at to help you choose who will give you the best service.

Ultimately I got it for my dog, a dachshund, b/c they are likely to go down IVDD and need $2,500 surgery so he could walk again, which doesn’t even include the cost of therapy. It may never happen but that surgery would be something that would be a MUST and thus made it a worthwhile investment for me. (not this is considered hereditary and not all will cover that. mine does and that is one of the reasons they were selected.)

How about you? Have you purchased pet insurance? If not, how much would you pay to fix your pet?
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Comments | 6 Responses

  1. says

    Hi Jeff:

    Admittedly, I’m not an unbiased commentator—I work for Pets Best Insurance. While self-insurance, as you suggest, may be a viable option for many people who have access to a cash reserve of several thousand dollars, it may not be a good approach for those who do not. There’s no guarantee that a pet won’t have a serious illness or accident early in its life, well before a sufficient reserve has been set aside to mitigate some really hard choices. Our experience indicates that pets, puppies especially, do have significant vet bills early in life (puppies owing to a propensity to eat anything and everything around).

    Regards,

    Chris

  2. Heather says

    I have Pet Plan insurance and love it. No it doesn’t cover preventative care, which is a lot of money, but it does cover just about anything else you dog can get himself into. Now, I didn’t get it for my dog when I first got him, which was the mistake. He now has a preexisting condition for allergies. However, Had I gotten it before that issue arose, I would have already made bank of his health insurance. I have used it a time or two otherwise when he has gotten worms, etc.

    I think it just depends on the pet, their hereditary conditions and likely hood, and how crazy of a puppy you have and what he is going to get himself into.

    The KEY KEY KEY thing her is to do your research!!!! There are large differences between the plans. you have to decide what is important to you. there are also consumer ratings out there for the various providers that you will definitely want to take a look at to help you choose who will give you the best service.

    Ultimately I got it for my dog, a dachshund, b/c they are likely to go down IVDD and need $2,500 surgery so he could walk again, which doesn’t even include the cost of therapy. It may never happen but that surgery would be something that would be a MUST and thus made it a worthwhile investment for me. (not this is considered hereditary and not all will cover that. mine does and that is one of the reasons they were selected.)

  3. Ethan says

    Jeff, this is a great topic for you to cover and I think you took a closer look at it than most people do. But I do have a different perspective. I insure three cats via PetPlan. The policies costs just $65 *annually* for each cat, with $200 deductibles and 20% co-pays, and a maximum benefit of $8,000 per year. As any insurance shopper should, I looked around at a lot of policies and I read the terms in full. Specifically important with pet insurance is to look at future coverage guarantees (you don’t want the company to be able to drop you for using the policy), future pricing guarantees (you want a guarantee of standard rates for your pet’s age, regardless of events occurring since coverage was initiated), and coverage for ongoing treatments for chronic conditions like arthritis.

    Like most insurance, you can’t wait until there is a problem or until problems are statistically likely to occur. Once a cat or dog gets beyond about 5 years of age, the cost of a new insurance enrollments starts to get very steep. I insure because diagnosis alone can be very expensive, and it’s hard for me to put a pet to sleep without one. I also insure because I think we undersell our pets in our financial reasoning. I am willing to spend a decent chunk of money to keep my pets alive and healthy, and I make that decision in advance via insurance premiums because it is easier and more manageable.

    I think the negative reaction to pet spending, and pet health spending in particular, is due to people’s inability to see money for what it is: liquid effort. Nobody would expect a pet owner to put their pet to sleep rather than spend 30 minutes a day applying a special ointment or preparing a certain food. But 30 minutes a day for a year is the time equivalent of a month spent at an 8-5 job! In other words, 1/12th of the average person’s annual income-generating effort. If you wanted to, you could spend that time generating income and bring in an extra few thousand dollars during the year.

  4. pet insurance cost says

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  5. PYB Comment says

    It’s definitely worth it. In full disclosure, I work for Protect Your Bubble. We are the leading pet health insurer in the UK and just launched here in the US last March. We are excited to be here! Sadly, 92% of all pets will end up with some emergency in their lifetime. That can add up to very expensive vet bills (or a very heartbreaking financial decision). Pet insurance can really mean peace of mind for pet parents.

    Our plans provide up to 90 percent reimbursement for covered vet charges for eligible accidents, illnesses, hereditary conditions and behavioral treatments and alternative therapies. They allow owners to visit any licensed vet in the country. Additionally, annual deductible options start at $100 which only need to be met once per plan year. Plus, our plans start as low as $1 per day.

    For more information, visit: us.protectyourbubble.com.

  6. says

    Like a few others here commenting, I’m not completely unbiased (my website, PetInsuranceChoice.com, allows individuals to compare the top 5 pet insurance companies side by side) but do want to share my personal experience.

    The reason I even started the website was because I have a three year old pit bull who recently tore his cruciate ligaments in both rear legs (he was running around when it happened). The bill between diagnosis, x-rays, surgery, rehab added up to around $7,000 per leg. I have pet insurance (PetPlan) and had a $100 deductible and 90% coverage which costs around $50/month. If I had “self-insured”, in the 3 year period I would have only saved up around $1800 (36 months x $50). I always tell people that pet insurance IS a low cost considering it gives you a peace of mind by helping with the cost of small and large vet bills.

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