Money Talks, So Should You

Is it worth it: Pet insurance

Clint Williams
by Clint Williams, Dimespring Contributor

Some financial decisions require more than crunching numbers. Some financial decisions require a bit of soul searching. How much are you willing to pay, for example, to save your pet?

The answer to that question may be the deciding factor when considering pet insurance.

Pet insurance policies typically reimburse for veterinary care expenses. Like people health insurance, there are deductibles and co-pays, so out-of-pocket costs should be considered into the equation even if you own the insurance. The amount the policy will reimburse varies – as do the premiums. For example, the premium for a policy with Protect Your Bubble for a 4-year-old mixed-breed male dog is $34.76 a month.

On basic unemotional terms, the question of whether it’s worth it or not would be mathematical. For example, in the case above, is $34.76 per month spread over the typical life of a pet more than the typical expenses you’d encounter?

The editors of Consumer Reports magazine last year used the lifetime vet bills of Roxy, a 10-year-old beagle in Dobbs Ferry, N.Y. to gauge the benefit of pet insurance. None of the nine policies would have paid out more than the projected premiums. But Roxy was comparatively healthy. But pet insurance did save money when the editors analyzed the cases of two real-life cats with serious and costly health problems – and that illustrates the gamble of any insurance.

Insurance should be used to protect you against unexpected expenses. No one expects the dog to eat the iPod, but the cost of removing a foreign object swallowed by a cat or dog is $1,500 to $1,967, according to Veterinary Pet Insurance Co., the oldest and large pet insurance firm. The average claim for repairing a torn knee ligament or cartilage – again, an unexpected event – was $1,578 in 2010, according to Veterinary Pet Insurance Co.

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Some experts say you’re better off taking that money and putting it in a savings account to cover pet expenses.

But not everyone has the discipline to build up an emergency fund, says Stephen Ebbett, president of Protect Your Bubble. “If you're faced with an unexpected pet injury, it can cost owners thousands of dollars,” he said.

This is where the emotional part of the argument comes in. Some owners have no limit when it comes to what it might cost them to take care of there pet. Others have a limit. If your limit is high, pet insurance begins to make more sense. The lower the limit, the less sense it makes. Forty dollars per month added on to food and flea medicine and other various pet expenses may be more than you’re willing to regularly spend, regardless.

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According to a survey by DVM Newsmagazine, veterinarians estimate the average dollar amount at which most clients would opt to stop treatment of a sick or injured animal at $1,451 – a threshold easy to reach.

The other factor, as mentioned above, is how disciplined you are with setting aside money for unexpected pet care. Would you be able to build a substantial emergency fund that might cover unexpected vet bills? The more disciplined you are, the less sense pet insurance makes. But if you’ll end up throwing that $34.76 away each month on Snickers bars and spontaneous movies On Demand, maybe the comfort of the insurance will work for you.

Americans spent $50.96 billion on their pets in 2011, according to a survey by the American Pet Products Association. Spending on pet insurance is estimated at $450 million and projected to grow to more than $500 million in 2012, according to the American Pet Products Association. That is a lot of money, but there is plenty of room for growth. While nearly two-thirds of U.S. households have a pet and more than 46 million people own a dog, only about 1 million pet owners insure Fluffy or Fido for illness and injury.

The American Veterinary Medical Association offers these tips when shopping for pet insurance:

  • The insurance provider should clearly spell out to you the details, including the limitations and exclusions, of coverage for routine and/or wellness care as well as emergency treatments and conditions that require extensive care. Find out how your premiums will be increased as your pet ages or if you make any claims.
  • Find out how they define and handle pre-existing conditions (diseases or conditions your pet already has – or has had – prior to purchasing the insurance plan).
  • In some cases, insurance providers will not insure a specific pet or breed of pet.
  • Some providers will give multiple pet discounts.
  • All of the charges, including co-pays, deductibles, add-on charges and other fees, should be clearly explained to you so you fully understand the policy and its limitations.
  • You should be allowed to choose the veterinarian who will provide veterinary care for your pet.
  • Pet insurance plans are generally reimbursement plans – you pay the bills up front and are reimbursed by the insurance provider. Ask the insurance provider how claims are processed as well as the timeframe for reimbursement of your expenses so you know what to expect. If you're concerned about covering the expenses up front, ask your veterinarian about payment options that will work for you in case you need to make arrangements.


Clint Williams is an Arizona-based freelancer for DImespring. He has written for the Arizona Republic and the Atlanta Journal-Constitution.