Is Pet Insurance For Me?

By Dr. Courtney Smock

I have recently been asked my opinion about pet insurance several times by friends and family, and it seems to be a question on the rise among clients as well. While a quick comparison between the costs of identical services at human vs. veterinary hospitals makes clear that vet care is one heck of a value, that still doesn't mean it is cheap. Particularly when the bill is coming out of your pocket, not Humana's or Blue Cross'. We want the best care for out pets, and it's no surprise an increasing number of people are looking toward insurance plans to afford that care. But are they a good deal for everyone?

As with any free-market product, there are almost as many choices for pet health insurance as there are pets.  However, with little exception, they all share an operational feature: YOU pay the bill at the veterinary clinic, submit your claim, and get reimbursed (or not!) at a later date.  This is an extremely important point to consider before anything else - even though pet insurance may help offset your costs in the future, you are still responsible for the entire bill in the present.  So, if you cannot temporarily access a few thousand dollars for an emergency situation (think tapping into savings, a high interest rate credit card you wouldn't normally use, or borrowing from friends and family), then pet insurance is not going to do squat for you, because there will probably be very little veterinary care happening.

Well then, what is pet insurance for?  Like any insurance, it is a tool to mitigate your expenses should something unfortunate happen.  But pet insurance is unique in the respect that it may help you make a difficult medical care decision should something unfortunate happen to your pet.  Let me give you two examples:

• At your dog’s yearly wellness visit, the veterinarian tells you that she feels a mass in Muffy’s belly.  X-rays suggest that it is a tumor in the spleen.  Your vet explains that there is a decent chance the tumor is benign, meaning that surgical removal of the spleen could be 100% curative.  If you do nothing, Muffy’s spleen could rupture, leading to fatal blood loss.  The estimate for surgery is $1500.  You have a credit card you could use, but every dollar is already spoken for in your budget and you don’t know how you will be able to make payments.  Pet insurance might allow you to authorize the surgery, knowing that most of the cost will be reimbursed in your insurance payout.  
• Your happy-go-lucky lab puppy gets loose at the dog park and is hit by a car (Dog forbid).  Fortunately there are no mortal wounds, but one of her legs is broken in the incident.  The vet says the fracture is too complicated and will need to go to a specialist for repair - but all those plates, screws, rechecks and the expertise of the surgical specialist are going to run $3000-$4000.  Otherwise, the fracture won't heal and the only humane thing to do is to remove the leg.  Pet insurance could save the leg without amputating your savings in turn.  

I used to tell clients that I didn’t think pet insurance was a good value; that they should take the money they would pay in premiums each month and put it in a dedicated pet savings account.  The problem with this recommendation is that if aforementioned puppy goes on the lam and you’ve only had time to save $60, that’s not really much help.  Now I amend that statement to say that if you have $2-5,000 to put in a dedicated savings account for your pet, or some other way to access that kind of money in an emergency, you definitely don’t NEED pet insurance.  However, if the idea of dropping five grand on Muffy’s prolonged hospital stay when she breaks her elbow jumping out of your handbag makes your stomach turn, you may still WANT pet insurance.

In the interest of full disclosure, I will freely admit that my pets are not insured, nor do I have $5,000 socked away in a pet savings account.  If, dear reader, you are still with me, and still thinking about getting pet insurance, then consider these KEY POINTS:

1. Remember that insurance providers are businesses, and they wouldn’t offer this service if they didn’t make a profit – you may break even or come out ahead financially, but the odds are not in your favor, so that should not be the main factor in your decision.
2. Wellness care (annual exam, vaccines, spay/neuter surgery, heartworm testing and preventative) is an expense that can be anticipated and for which you can save – I do not recommend insuring for wellness care.
3.  For the love of Dog, READ and be sure you understand any policy in full before committing (See point #1 above)!  Particularly be on the lookout for pre-existing condition exclusions and waiting periods, breed-related exclusions, and maximum payout details. If you have questions, talk to your veterinarian.
4. Go to Dr. Frances Wilkerson's site, Pet Insurance University.  Aside from an excellent article series on how pet insurance works and why you would consider it, she provides detailed reviews on all the major plans for easy comparison.