Pet Insurance: Is It Worth It?

There’s a reason we call them man’s best friend. Your pet is probably a source of comfort when you’re sad, snuggles when you’re lonely and entertainment when you’re bored. You love your pet like mad, so you want to keep them healthy for as long as possible.

But wow, does veterinary care get expensive. And because your pet could become sick or injured at any time, planning for how you’ll handle emergency care can’t wait. An unexpected medical event could wipe out your savings – or even worse, might be something you can’t afford to treat at all.

Buying pet insurance is a solution to those what-ifs. When your pet gets sick or hurt, insurance will help cover the costs so your best buddy can get better. That said, it’s not the right choice for every pet parent. Weigh the pros and cons to determine whether pet insurance makes sense for you.

Pro: It Can Save You Money

Ideally, having pet insurance will help you save money on veterinary bills. That’s the whole point. Whether or not that proves to be the case depends entirely on your plan and your pet’s health.

In 2018, the average American pet insurance policy holder paid $529 on premiums for accident/illness plans, according to the North American Pet Health Insurance Association (NAPHIA). The average claim amount paid was $284. If those averages reflect your real costs and your pet had two or three serious covered health problems in one year, insurance would pay off. Insurance will also contribute to the cost of medication, so if your pet takes meds daily, this might be a financially sound option.

Con: …But You Might Lose Money

In 2016 Consumer Reports studied the vet bills of a cat and dog and calculated how much their owners would have saved or lost under three different pet insurance policies. For both animals, only one of the three policies resulted in savings. With the other two policies, owners paid more in premiums than they received in reimbursements.

Of course, losing money on your pet insurance generally only happens when your pet stays healthy and needs minimal care, so in this case losing money might not be the worst possible outcome.

Pro: You Can More Accurately Budget

If creating and sticking to a budget is important to you, pet insurance might be a useful tool. Monthly pet insurance premiums are predictable. An animal’s accident or injury is not. It’s easier to plan for upcoming costs when you know what they’re going to be.

Con: It Usually Doesn’t Pay for Upfront Costs

Most pet insurance policies don’t work like your health insurance probably does. Handing over your membership card to the billing person at your vet’s office won’t wipe out your balance. Generally, the insurance company requires you to pay upfront for any veterinary care your pet receives. Then you can submit a claim and wait for the company to send a reimbursement check. If money is tight, waiting for weeks to get reimbursed might not be feasible. If the carrier denies your claim, you won’t get the money you were counting on.

That said, at least one carrier has already introduced a direct-pay option. Trupanion will pay its portion of a claim right to the vet while you check out. You’ll still have to pay your portion of the bill upfront, like you’d pay a co-pay at your own doctor’s office. Depending on your coverage, that amount may be minimal.

Pro: It’s Growing in Popularity

Pet insurance wasn’t something your parents or grandparents ever had to consider with their childhood pets. But if you buy pet insurance today, you might not be the first person on your block to have it.

This type of protection is becoming more and more popular. An estimated 2.43 million pets in the U.S. and Canada were covered by pet insurance at the end of 2018, according to NAPHIA. That was a 17% increase over the end of 2017, when an estimated 2.1 million pets were insured. As with any growing market, consumers can expect the competition to create more options and coverage types that will be available in coming years.

This could also be good news for pet parents who can’t afford to pay for care upfront and wait for reimbursement. As competition grows, carriers may compete to offer more direct-pay options like Trupanion’s.

Con: Not Everything is Covered

The pet insurance coverage you choose might not cover the bills you incur. If you purchase an accident-only policy and your dog gets sick, insurance might not help. Wellness and preventative care and pre-existing conditions may also not be covered. If your pet stays healthy all year, you’ll pay out-of-pocket for checkups and receive no reimbursement from insurance.

Also, not all animals are covered. Most companies only offer coverage for dogs and cats. Owners of other types of animals have limited options.

Pro: Peace of Mind

Perhaps the biggest selling point for pet insurance is the comfort that comes from knowing you have it, and knowing that you’ll never have to decline the care your pet needs because you can’t afford it. Whatever life throws at you and your pet, insurance will help soften the blow.

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