Pet Insurance
I’m about to become the proud momma to two new Bichon Frise puppies. They were just born and will be ready to come home to momma in about eight weeks. Coincidentally, I just got a credit card statement with a stuffer for pet insurance. Hmmm. Signal from the Universe? So I got to thinking about the issue of pet insurance and whether or not it’s worth the money.
Pet insurance is becoming very popular because vet costs are rising and interventions are becoming much more expensive. According to the American Veterinary Medical Association, Americans spend more than $20 billion dollars a year on veterinary care. In 2003, fewer than 1% of an estimated nine million Canadian pets were insured. ConsumerReports.org says that’s because pet insurance doesn’t offer good value for the money you have to put out. And I quote:
The problem with pet insurance is all its fine-print pitfalls. Indeed, buying a policy may end up increasing a pet owner’s total expenditures on veterinary care by thousands of dollars, according to our analysis of five plans. That’s because on top of deductibles required by all the insurers, plus any co-pays, unreimbursed costs, and exclusions–all of which you pay out-of-pocket–you also pay premiums. Seemingly small $11 to $50 per-month premiums can add up to $2,000 to $6,000 or more over a pet’s lifetime.
See their take on it. (http://www.consumerreports.org/pets/0307vet2.html)
If you decide in favour of pet insurance, it appears you have to be careful; you don’t want to just pick any old plan. There are policy options you’ll want to ask about such as benefit limits, deductibles, and, most importantly, what’s covered. Ask about:
- enrollment period: from what age to what age. Some plans cover critters from 8 weeks old to death; other cut off coverage at 8 years or so (hey, isn’t this exactly when you’re most likely to need coverage?)
- wait period: Plans often have a wait period of up to 21 days from the time you fill out the application until the plan goes into effect. Some plans also require a vet checkup before the plan is activated.
- benefit limit: the maximum the plan will pay out a year or over the life of the plan
- deductible: how much you must pay from your own pocket for each claim; some companies let you choose a deductible and reduce your premiums (by a smidgeon) based on the deductible you’ve chosen; with other plans, the deductible increases as your pet ages. Keep in mind that low premiums with too-high deductibles just aren’t worth it.
- co-pays: the plan pays up to 80% (or whatever your plan pays) and you pay the difference
- discounts for multiple pets
- coverage for pre-existing conditions: some plans will cover if the condition has been completely cured; other plans consider genetic conditions to be pre-existing. For example, Doberman Pinschers tend to suffer from Wobbler’s Disease and cardiomiopathy so those might not be covered for your Dobi.
- coverage for cancer
- coverage for sterilization
- coverage for preventative care: which would take care of your vet visits (most plans require at least an annual vet visit to keep the plan in effect)
- monthly cost: costs vary tremendously with the type of plan you sign up for, running anywhere from $10 to $100 a month. Basic plans cover the costs of accidents (like being hit by a car) and some common illnesses like eye and ear infections. Top of the line coverage may cover routine preventive care (such as vaccinations and neuters/spays) and even alternative therapies like acupuncture and hydrotherapy. Some even cover the costs of cremation or burial of a pet, and include extra coverage upon accidental death. (You should also check to see if the premium will change after you’ve taken out the plan, and by how much.)
I got quotes for insuring one of my puppies from a variety of sources and it looks like it might cost about $60 a month for a good level of coverage. And since many of the plans I looked at have a cut-off when the dog turns 8, after spending almost $6,000 in premiums, I’d be back on my own. Also my last Bichon Frise, Sabrina Sabu-Yabu, never had a day of illness and lived 14 great years, so the breed may be hardy enough to not require pet insurance.
So I’m looking for some feedback. What’s your experience been with pet insurance? Worth it or not? And were there any surprises when you tried to make a claim or after you had had the plan for a while?
Tags: pet insurance
July 31st, 2008 at 8:29 am
We looked into pet insurance for our cats this spring. We had just paid $1500 in vet bills due to fatty liver disease. The premium for two cats would have been around $40/month for a mid-range plan. I was uncomfortable with the exceptions though (which seemed quite consistent between compaines) and decided to simply open an ING account and put the $40/month away myself.
I am curious if others have found this to be a good investment?
July 31st, 2008 at 8:33 am
I get flyers in my PC statements for pet insurance as well. After researching a few pet insurance options, I decided it wasn’t worth it for me. I adopted my dog as a senior and the premiums for older dogs were outrageous. (over $80/month if I recall correctly) To top it off, none of them covered wellness visits which are important for older dogs. So, I would have basically been paying in case of catastrophe and/or death. Since most of my pet health $ is spent on vaccinations, wellness checkups and Benadryl (doggie congestion), it’s much cheaper to just pay as we go.
It did seem like a better deal for puppies though.
July 31st, 2008 at 8:49 am
We were thinking of setting aside a separate high interest savings account and put the money there. Kind of like an emergency fund. At least we’ll get it back with interest if, knock on wood, nothing bad ever happens.
July 31st, 2008 at 8:56 am
Hi Gail: Congratulations on the new puppies!! We are real dog lovers, however, we have never had pet insurance. This is due mostly to the fact that my sister has a dog for whom she had pet insurance and discovered that the company would raise her premiums each time she made a claim. She cancelled the policy because the premiums were becoming very high and she didn’t feel that it was worth it any longer. Her dog seems to suffer digestive upset a couple of times a year and requires a trip to the vet each time. Usually he has to stay overnight and have I.V. fluids, etc. Very expensive.
If a good policy is $60. per month I’m wondering if one would not be better off putting $60 each month into a good savings account (maybe like ING). Hopefully by the time the dog needs a trip to the vet one would have enough to cover the cost. If the dog never requires expensive care then you have a nice pot of money to start of with your next pet or to do whatever you want with. I find that the routine check ups and vaccinations are not too costly. It is the big stuff and emergencies that cost hundreds or even thousands of dollars that can leave you howling. In the case of puppies it could be many years before they would need special care. I guess another option would be to take an insurance for the first few years while one builds an emergency account. In this case you would have to pay the premiums along with putting some money into the pet account each month.
The bottom line is planning. Even with our “FREE” dog from the SPCA there have been significant expenses - $80. to the SPCA, $90. for the first vaccination, $80. for the second vaccination, $300 for the spaying, about $100 at the pet store for supplies, $80 for deworming/flea tablets, $20 for tags and about $100 for food. I’m sure there has been other stuff as well that I’m forgetting at the moment. This has all been in the past month. We are going on vacation in Aug. and have to leave our precious pooch in a kennel. This will cost about $300. for 10 days. I would love to have three of four dogs but I know that I just can’t afford it. At least not right now.
Bets of luck with your new furry children. I really recommend the Dog Whisperer with Cesar Millan to anyone who doesn’t already know about him. We watch every day and have learned a lot. Our favourite show after TDDUP!!
July 31st, 2008 at 9:52 am
Take a towel when you go pick up the puppies and rub it on their mother so it’ll have her scent. Having the towel with them during their transition will comfort the puppies–8 weeks is so young.
I’d concur with everyone on setting money aside and creating your own insurance pool. Insurance is nice for a catastrophic illness or accident but what are the odds of that happening? I’ve never had pet insurance and luckily haven’t experienced a situation where it cost thousands.
July 31st, 2008 at 11:15 am
I’ve looked into pet insurance as well, but it didn’t seem to make sense to me.
When people ask me about pet insurance, I usually tell them to get a quote and to put that amount every month into an ING account. When your pet gets sick, just dip into the account.
By my own experience, you should be way ahead.
July 31st, 2008 at 11:26 am
I have three cats all of various ages and don’t have pet insurance. I have to agree that the restrictions aren’t really worth it, not to mention the fact that I can’t really afford the premiums for all of them in some cases. As well, one of my cats is almost 12 and I think the majority of insurance policies won’t cover him. I set up a separate “vet account” and have put funds in there instead - as most people have suggested - and will use that for emergencies, visits, special needs, etc. I might start funnelling a little more cash that way again and raise what I’ve set aside…just in case.
July 31st, 2008 at 11:40 am
Hi Gail,
Great article and very informative!
I’m territory partners with a company called Trupanion (Vetinsurance in Canada). We strive to re-define the pet insurance industry by offering simple, fair, and affordable pet health insurance. We cover $20 000 over the lifetime for all unexpected vet bills (accidents and illnesses)…… and yes, we DO cover congenital and hereditary disorders.. There are no limits per claim, per year, per condition, or per incident. Basically it’s like an open chequebook for $20 000 that you can use whenever your pet becomes sick or is injured. There is no deductible, however the pet owner has to pay for all veterinary examination fees (we consider this in lieu of a deductible). We cover 90% of all diagnostic tests, surgeries, and medications. We never penalize pet owners for making claims nor do we penalize them for their pet aging. You must enroll your pets when they are puppies or kittens with Trupanion (between 8wks - 1yr), but we cover them for their lifetime. By only enrolling puppies and kittens, we greatly reduce chances of pre-existing conditions. this means we can pay more claims and pay them very quickly too! http://www.trupanion.com.
Good luck with your puppies!
July 31st, 2008 at 12:56 pm
Congratulations Gail on your new additions.
I have 3 small dogs 7 months, 2 years and 11 years and have never had pet insurance. I did do some investigation into pet insurance this year though as my 11 year has been a little ill and required several vet visits and tests which quickly added up. After investigating though I found that it was still cheaper for me to pay out of my pocket for the vet bills then it would have cost me to pay for pet insurance for the last 11 years.
I also find that they all stay pretty healthy if you take them for their yearly visit to the vet, get good quality dog food and ensure they get lots of exercise (kind of like people, the better we take of our selves the better we are) Of course there are always the unexpected illnesses but most of the time keeping your pet healthy means taking the time to care for them properly.
July 31st, 2008 at 1:35 pm
At times I had pet insurance and when the premium increased (because I was claiming), I cancelled the high one but kept the lower one (payed for the dentistry).
Age and coverage are a big thing in choosing pet insurance.
How easy is it to get reimbursed (hours on phone to get your money)?
Insurance bets on numbers, so the greater the number of pets you have, there is a good chance that insurance will not help you and you are better off with a special bank account.
As someone whose budget gets easily busted with vet fees (especially in the past year), I prefer putting money aside than going to the vet and guessing what will be reimbursed (I don’t want to make decisions based on that.
If insurance is for unexpected events, the following are known expenses:
- yearly check up (exam, heartworm pills, etc)
- spaying / neutering
- occasional additional vet expenses (ate something wrong)
- dentistry (some expected, some not)
- increased cost with age
- “Goodbye” to your pet
Many should budget at least $500/year/pet, but often $1000 can be the norm as the pet ages.
This shows one very important point: what would you do for your pet? Some would do surgery, some would never consider it. Are you ready financially for what medical care you are willing to provide for your pet? I do not want to start something controversial here, but philosophies do vary a lot on this point.
July 31st, 2008 at 1:45 pm
After having read some of the posts and Gail’s bit, I almost wonder, can the same statements be applied to our own insurance, or is human insurance different? I have no experience with it, and no need for it anytime soon since I have no dependents, so call me naive. Could saving what you would pay insurance in premiums be just as well spent in a savings account?
July 31st, 2008 at 2:05 pm
Jimmy, the main difference is as you mention that a pet has no dependents. In other words, if it dies than the family’s financial situation improves, and does not suffer. If one of the main income bringers dies, the family situation suffers greatly. It is for this reason that I think life insurance children is not a good investment. If you have no dependents, then you likely do not need life insurance (though accident insurance is a no brainer, and critical illness is to be considered). You may find this posting and related pages helpful: http://www.milliondollarjourney.com/determining-our-life-insurance-needs-i-criteria.htm
And especially think carefully before choosing universal life, if you take life insurance (term life is probably better).
July 31st, 2008 at 4:00 pm
My mom paid into the pet insurance thing for years, then her dog was diagnosed with diabetes and quickly went blind. The insurance only pays for part of the treatment and there were a surprising number of limitations.
After seeing what she has gone through, I don’t think it’s worth it. After all, if she had put the deluxe monthly fee for both dogs away into her emergency fund (and maybe gave the dogs less treats too) by the time the one dog got ill, she would have had loads saved up. And she wouldn’t have to go through the whole stupid disapointment with the insurance people.
I have a puppy-dog and a cat, I consider my pet’s health as something that is managed through appropriate diet, excercise (to keep out of trouble) and preventative maintenence through regular check-ups. Sure crap can happen, and that’s what the emergency fund is for.
That’s my feeling.
July 31st, 2008 at 8:41 pm
Great question Gail.
Karen, thank you for your information about your company. I’ll check that out for consideration with pets in the future.
I have had several dogs over my lifetime and never had a major vet requirement - thank the good heavens!
I currently have an 11 year old Jack Russell Terrier, an 11 yr old Chow Chow and a 4 yr old Springer Spaniel. Out of the 3, a side from regular shots and their neutering/spaying, I have spent $145 at the vet. My Jack Russell has start to suffer from Hot spots in the summer and need meds for it last year.
When I got my JRT & my Chow Chow 11 yrs ago, I didn’t know there was such a thing as pet insurance. I’ve just thought of it as an unneccessary expense since finding out more about it.
I think if you are adopting a breed that traditionally has certain health concerns, insurance might be a great thing, but over all, I would set money a side each month in a “pet” fund.
Jimmy: You raise a good question. have dependants, so I chose to have term life insurance and critical illness insurance. I have better peace of mind knowing my husband won’t be burdened if I pass while we are raising our child. The critical illness coverage is most important to me. If I get sick, I will have the funds for meds and to take the time to focus on hopefully getting better.
July 31st, 2008 at 10:36 pm
Hi Gail,
I’m not your average reader since I’m from Malaysia but I’ve been following your show on tele on our cable tv and have started reading your blog since I found out you have one.
Anyway, congratulations on your puppies. I love dogs and have 2 of my own. A Golden Retriever name Shasta and a Welsh Pembroke Corgi named Duchess. I think it’s a good idea to have insurance for your puppies. Even though your last Bichon Frise has good health but doesn’t mean this round, it will be, as in playing safe. I don’t mean it in a bad way, but it’s always good to be prepared.
Here in Malaysia, we don’t have insurance for pet, let alone a credit card with one. We’re way back compared to overseas countries. If the return is good, if there is one, probably it can be used as a savings like normal insurance you buy for your kids, should you not use it for any health problems. So I think it’s a good buy.
August 1st, 2008 at 1:01 am
i find it amusing that i as a person i am insured for cheaper than the quotes most of you received for a dog. i am an avid pet lover, just to clarify. but come on…possibly a scam?
humm…
August 1st, 2008 at 8:41 am
A lady who lived in our condo complex had a Bichon that had all kinds of problems while still quite young. He needed cataract surgery around three years old. He developed severe spinal problems and untreatable pain and mobility issues. He had to be put down by around age five, as I recall. She had bought pet insurance for her dog and had big problems trying to get it to pay for all of the vet bills. It sounded like the insurance company was doing everything possible to weasel out of paying claims.
The good news is that she got another Bichon puppy and he has been much healthier. And now she set up an account for setting aside a little every month to pay for future vet bills.
August 1st, 2008 at 1:26 pm
Well, I hardly need to second (fourth? eighth?) the idea of having an ING account instead, but that’s what I’ve been doing for the past year and a half and it’s worked great so far.
I did want to second Susan on the vote for watching the Dog Whisperer! We don’t have any dogs right now (two large cats fill up the apartment nicely) but boy do I wish Cesar Milan had been on the air back when we had our lab mix!
Congrats on the puppies
August 1st, 2008 at 6:30 pm
What most people forget when comparing pet insurance to human insurance is that most of our employers pay part of our premiums…. Try to get insurance without a full time job and not through a spouse. Cobra insurance can be costly. Also there are more human insurances types than pet and some of those are not good and people end up paying a lot out as well. But it is still less than if they did not have any insurance at all. In the long run insurance should help a person financially and while it would be great if no one ever had to pay a dime for medical care, who is going to pay the people who give the medical care. in my book any insurance is better than none. Why take the chance and have something catastrophic happen.
August 2nd, 2008 at 3:02 am
I’m glad this topic came up: I’ve thought, for years, that I should have it and now I know that it’s probably not worth it. Yep, 12 a month into a high-interest savings account will probably make it unnecessary.
And enjoy your little balls of fluff! But may I put in a request for puppy pictures when you get ‘em?