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Medical insurance for your pet

Diane Sermersheim thought her children might get sick when the weather turned last December, but instead it was her 4-year-old Irish setter who ran a fever and suffered diarrhea.

A battery of exams, blood samples, medications and two vet bills later, Sermersheim ran up $314.17 for what turned out to be "the crud."

Her experience reflects the frustrating reality of pet ownership. Animals get sick, fall in holes, chase cars and suffer from congenital maladies. Dogs run up the highest bills: They're more active, more likely to be outside and more prone to congenital and hereditary problems, says Mark Warren, president and CEO of Pet Health Inc., the holding company for PetCare Pet Insurance.

More and more, pets are viewed as valued family members and spending on their health care has grown correspondingly. According to a Packaged Facts study in November 2005, the spending on veterinary services increased 76 percent from 1994 to 2003. Reflective of that increase, a survey of VPI policyholders in 2006, revealed that 70 percent of the 5,200 respondents would spend any amount to save their pets life.

That's where pet insurance steps in.

A crossbreed of coverage
Pet insurance policies resemble a cross between indemnity products and automobile coverage, with many options to weave through.

Whether insuring a dog or cat, expect to pay a deductible, a co-pay or both. Some companies reimburse on a benefit schedule, others opt for a flat payback that typically hovers at 80 percent.

"If your pet's condition is minor, insurance coverage helps a little," says Jack Stephens, DVM, founder of VPI headquartered in Brea, Calif. "But where we really shine is when you have a large medical problem and you don't have that $1,000 or $2,000 in your pocket."

Most plans do impose annual payout limits between $10,000 and $12,000, which you can raise by buying a deluxe package policy.

Levels of care range from an accident-only policy at PetCare to VPI's comprehensive coverage and maintenance rider that pays for check-ups and teeth cleaning.

Somewhere in the middle, most plans step up to the plate to pay for gastrointestinal upset, dermatitis, ear infections, bladder infections, asthma, skin tumors, cancer, diabetes, broken bones, X-rays, diagnostic tests, surgery, anesthesia, hospitalization, prescriptions and lab fees.

However, coverage for common procedures like spay and neutering depend on the company, and some players require extra cash to cover vaccines. VPI excludes pre-existing conditions (unless the pet has not needed treatment for the problem in the proceeding six months), congenital problems and hereditary defects. PetCare says yes to these conditions, depending on your state.

VPI bases its rates on the pet's age -- older dogs reach as high as $500 a year for its premiums. PetCare offers enrollment to dogs up to 8 years old, 6 for select breeds; elderly insurance hopefuls are directed to the senior plan.

Next: "What's good for the vet isn't always sensible for pet owners."
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