If you’re like most pet owners, chances are that you think of them as part of the family. You don’t hesitate when it comes to providing medical care and you will do whatever is necessary to ensure they enjoy a long, happy life. Of course, even preventative care is not cheap, and emergencies, illnesses, and diseases can come with extremely high costs. Pet medical insurance promises to help limit your out of pocket costs, but is pet insurance worth it?
What Is Pet Insurance All About?
Like all other types of insurance, pet insurance is about protecting something that you love. Homeowner’s insurance protects your home and its contents. Health insurance protects you and your family from costs associated with illness and injury. Car insurance protects your vehicles. Life insurance ensures that your heirs have at least some financial benefit in the event of your passing. Pet insurance helps make caring for your four-legged friends more affordable.
Is Pet Insurance Similar to Regular Health Insurance?
So, is pet insurance worth it? A key to determining whether it is a wise investment in your situation is understanding how pet insurance works, particularly in comparison to human health insurance.
To put it simply, both exist to help make medical care more affordable, but there are some major differences. For instance, most human health insurance plans make preventative care more affordable, not just emergency care. You go in for an annual physical and you pay less than you would if you were uninsured. That’s not the case with pet insurance.
Pet insurance is almost exclusively focused on emergency care for accidents, illnesses, and the like. Preventative care is not usually covered unless you purchase an additional wellness policy.
Still, pet insurance coverage varies a lot from provider to provider, and some companies include more types of coverage than others do. You’ll need to know more about the various options on the market in order to make an informed decision and answer the question of is pet insurance worth it for you. If you'd like to get a quote on affordable pet insurance for your cat or dog, we can help.
Pet Insurance Coverage Types to Know
There are three types of pet insurance coverage, but not all companies offer all three.
Illness
Like humans, our pets are subject to a wide range of illnesses. These include things like cancer, but also urinary tract infections, respiratory infections, arthritis, diabetes, and more. Most pet insurance policies offer illness coverage, but you will need to consider exclusions due to preexisting conditions, breed restrictions, and more. You will also need to consider your pet’s age. Many insurers raise their rates for older pets because there is a greater risk involved. If your pet is already aged, it might be wiser to consider an accident-only policy. If your pet is young and healthy, though, illness coverage can be quite affordable.
Accident
Too many pets are injured in accidents every year in the US. Like humans, dogs can slip and fall, pulling muscles and breaking bones. Dogs and cats are frequently hit by cars. Other animals, including predators like coyotes and even other pets that you encounter at the dog park, can attack your pet leading to gashes and broken bones.
Wellness
As mentioned, not all insurance providers offer wellness coverage, but some do make it available. Wellness coverage is really about preventative care – wellness checks, nail trimming, heartworm testing, and the like. Wellness plans work differently from pet insurance in that you pay a specific amount and are reimbursed a portion of the cost for covered treatments. Some carriers give you a total amount for wellness instead of a per-item limit, so be sure to read the fine print when comparing options.
What about Preexisting Conditions?
Most pet insurance carriers do not cover preexisting conditions and will not cover medical problems that develop as a direct result of those conditions. What do insurers consider a preexisting condition, though? While the time frame varies from provider to provider, any health condition that was originally diagnosed between one year and 18 months prior to purchasing pet insurance is considered a preexisting condition.
Some insurers even use potential previous diagnoses and written veterinarian notes to conclude that a specific condition was preexisting and deny coverage. Study the list of preexisting conditions/exclusions for each insurer you're considering before deciding to purchase coverage.
What about Chronic Conditions?
Again, our pets are subject to many of the same health conditions we are. This includes chronic conditions that must be managed over time. Diabetes is a good example. Pannus is another one. Both require ongoing medication to control potentially devastating diseases.
Although most pet insurance companies offer coverage for chronic conditions that were not pre-existing, some do not cover chronic conditions at all and some state they only cover chronic conditions during the first year of treatment. For this reason, it is essential to shop around and compare your options.
What about Premium Increases Due to Claims?
Just like other types of insurance, if you file a claim and they pay out, you may see your premium increase shortly thereafter. However, this is not true for all pet insurance providers. Check each company’s policy regarding premium increases due to claims and look for a strict no penalization policy in writing.
What about Cancellation?
Canceling your pet insurance policy before the term is up can incur additional fees, or it might mean that you lose the unused portion of your premium. However, some insurance companies refund the unused premium amount. If you choose to cancel your policy immediately after signing up, some companies offer a complete money-back guarantee for 10 days or so after signing up, if you have not filed any claims, of course.
What about Waiting Periods?
Many pet insurance companies have waiting periods during which you can enroll your pet, but coverage will not be provided. For instance, a company might have a two-week waiting period for treatment of illnesses. The same company might only have a two-day waiting period for accidents, though.
Some waiting periods are very long – one well-known pet insurer has a six-month waiting period for orthopedic conditions. The best advice is to check each insurer’s list of waiting periods, consider any waivers that might shorten the wait time, and then make an informed decision.
What about Vet Limitations/Restrictions?
You would think that a pet insurance company would allow you to use virtually any vet that you wanted, and that is true in some cases. However, that’s not the case in all situations. Some insurers have restrictions on which vets or animal hospitals can be used in much the same way that an HMO works. Others put the decision of which vet to use firmly in your hands.
Factors That Affect Pet Insurance Cost
Insurance costs are based on risks. This is true whether you’re discussing life insurance, car insurance, or pet insurance. However, there are many different factors that touch on “risk” when buying pet insurance and you’ll need to understand how they figure into the price you pay, both monthly and over time in terms of medical costs.
Breed
Some animal breeds are more susceptible to specific health conditions and diseases than are others. Breeds with higher risk levels will cost more to insure. Some breeds may not be insurable with some insurers.
Congenital Conditions
A congenital condition is one that is present in your pet from birth but that does not show symptoms until a later date. For instance, hypothyroidism is a congenital condition. Some pet insurance companies will not cover these, particularly if they have been previously diagnosed or if symptoms have appeared prior to the beginning of coverage.
Genetic and Hereditary Conditions
Genetic and hereditary conditions are health conditions that a pet has inherited from a parent or another ancestor. Examples include allergies, hip dysplasia and IVDD to name only a few. Many pet insurance companies only offer coverage for these conditions through an additional rider, while other companies may not cover them at all.
Age
The older the pet, the greater the risk of them suffering some type of health condition. The older your pet is, the higher your pet insurance costs will be. Note that some insurance companies increase your costs per year as your pet ages and the risk rises. For a pet owner with multiple aging pets, this can become quite expensive over time. However, other insurers allow you to lock in your rates when your pet is young provided you enroll them in coverage at a young enough age.
Geographic Area
The area where you live may also have an impact on your pet insurance cost. Each state has a specific premium average that is based on the average cost of veterinary fees for that area. So, pet insurance cost would be higher for an area like New York than it would in an area where the cost of living was lower.
Pet Type
The two most common types of pets in the US are dogs and cats. It costs more to insure a dog than a cat in most cases simply because dogs are more likely to need veterinary treatment. Rarer or more exotic animals may be more costly to insure, and some may not be insurable at all.
Your Coverage Level
You have a lot of control over the cost of pet insurance, particularly when it comes to the level of coverage you choose. The lower the coverage level, the lower your premiums will be. For instance, an accident-only policy will be more affordable than one that includes coverage for both illnesses and accidents. A policy that includes illness coverage, accident coverage, and wellness coverage would cost the most.
Your Deductible
As with any other type of insurance, your deductible will play a significant role in determining your premiums. The lower your deductible, the higher your monthly premium will be. Conversely, a higher deductible gives you a lower premium, but you will have to pay more out of pocket before the insurance will cover treatment. Ideally, you will find a balance between premium affordability and out of pocket expenses.
Your Reimbursement Rate
Reimbursement rate can be a confusing term. It’s actually nothing more than the amount of the bill that the insurance company pays, less your deductible. So, let’s say that your insurance policy has a 100% reimbursement rate. Once you pay your deductible, the insurer pays 100% of the remaining bill. However, if your policy had a 70% reimbursement rate, the insurer would pay 70% of the remaining balance and you would pay the final 30%. Obviously, the higher the reimbursement rate, the more expensive the policy will be. However, very low reimbursement rates may make healthcare for your pet too costly.
Is Affordable Pet Insurance a Reality?
Finding affordable pet insurance can certainly be a reality. This is particularly true if you compare the cost of pet insurance to the cost of human health insurance – they are worlds apart. In general, you will find the following true with most policies from most insurers (again, not all insurers are the same, so do your due diligence):
- Low Premiums – In most cases, premiums are relatively low, particularly if your pet is young and healthy. However, even older pets can benefit from affordable pet insurance coverage if you choose a lower tier.
- Low Deductibles – When compared to the cost of emergency vet treatment, pet insurance deductibles are downright reasonable, even cheap. This is particularly true in the case of an unexpected surgery due to an animal attack or being hit by a car.
- Keep Your Vet – Few pet insurance companies force you into an HMO like plan (there are some, though). In almost all cases, you can choose the vet that you want, so you’re free to shop around and find the right mix of expertise, bedside manner, and affordability. In some cases, it may really be cheaper to pay for some treatments out of pocket than meet an annual deductible, and shopping around for the right vet allows you to do that.
- No Life or Death Decisions – Without pet insurance, medical care can be incredibly costly, particularly for major illnesses and accidents resulting in serious injury. Often, the costs of the treatment are so high that families cannot afford to pay them, leading to the decision to euthanize a beloved member of the family. Pet insurance ensures that you are not faced with that choice based solely on financial considerations.
Will Pet Insurance Cover Most of Your Pet’s Medical Bills?
Is pet insurance worth it? Answering that question definitively is impossible, as the same answer will not hold true for every pet owner nor does it apply in all situations. For instance, pet insurance may not cover your pet’s medical bills if they're due to a pre-existing condition.
Even with pet insurance, most people end up paying a minimum of 20% of their pet’s medical costs, particularly because regular preventative care is often not included with a policy, or only available as an add-on. Wellness plans also often include fees for treatments that are necessary only once or twice in a pet’s lifetime, or that you will never use in the first place. That increases your out of pocket costs.
If your pet only needs routine wellness care, pet insurance may represent a significant additional cost with little immediate value, as well. However, it will pay for itself many times over in the event of a serious illness or catastrophic accident.
There is also the chance that you are not a pet owner who would spare no expense to treat your pet. After all, no type of insurance is “worth it” if you do not use it. Then it simply becomes yet another expense.
In Conclusion
In the end, purchasing pet insurance is a good decision for most pet owners, but may not be the right choice for all families. If you will use it, and you are one of the growing number of owners who will stop at nothing to ensure your pet is happy and healthy, it is a sound decision, though. If that sounds like you, follow a few simple tips to ensure you get the best deal possible:
- Sign your pet up as young as possible to avoid age-related premium increases.
- Get the right mixture of coverage types for your budget and your pet.
- Shop around with different insurers as policies, premiums, and other factors can vary wildly from company to company.
- Consider asking your vet for recommendations on pet insurance providers based on their expertise and their understanding of your pet’s breed and any potential health conditions.
- Apply for insurance before you need it, as most policies come with a waiting period before you can use the coverage.
Is pet insurance worth it? For most pet owners, the answer is yes. However, do your due diligence, shop around, and choose the right fit for your family, your pet, and your budget.
