Pet insurance: Is it worth the money?

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Whether you have a fluffy kitten or a purebred, 100-pound Rottweiler, as a pet owner you can expect occasional trips to the veterinarian. And even routine care can trigger sticker shock.

An emergency visit if your pet is hit by a car can cost as much as $3,000 to $7,000, says Dr. Zenithson Ng, a clinical assistant professor in the College of Veterinary Medicine at the University of Tennessee in Knoxville.

Pet insurance — with monthly premiums that range from less than $10 all the way up to around $100 — can cover some of your pet’s medical expenses. However, whether it makes sense for your budget is debatable.

“Pet insurance isn’t for everyone, but it can be helpful,” says Dr. Kimberly May, a spokeswoman for the American Veterinary Medical Association, or AVMA, based in Schaumburg, Ill. “When you need it, you’re glad to have it, but some animals use it a lot and others don’t use it at all.”

The cold, hard costs

According to the AVMA’s most recent statistics, released in 2012, U.S. pet owners spend $28 billion a year on vet bills.

Routine vet appointments for a young dog or cat range from $100 to $250, and additional costs for diagnostic testing can boost your bill by up to:

  • $1,200 for pet dentistry.
  • $500 per X-ray or ultrasound
  • $2,000 for an MRI or CT scan. 

Any necessary surgery costs thousands more, Ng adds.

“It may sound harsh to put a cash value on your pet’s health and happiness, but few of us have unlimited resources,” says Angie Hicks, founder of the consumer review website Angie’s List. “If you want to do whatever it takes to keep your animal happy and healthy, regardless of cost, pet insurance is probably a smart investment.”

Pros of pet insurance …

The main reason to buy pet insurance is for peace of mind, says May.

“There’s nothing worse than putting a pet down because you can’t afford to treat it,” she says.

A key difference between pet insurance and other insurance policies, she says, is that pet insurance typically is a reimbursement plan, meaning you pay the bill upfront and then get some or all of the money back.

One Angie’s List member had a dog that developed two slipped discs, a torn ligament, a sensitive stomach and several abscessed teeth over the years. Medical bills were about $12,000, but, because of insurance, the member received a partial reimbursement of $5,000 after paying about $1,800 in premiums.

So, thanks to the insurance, the person saved about $3,200, says Hicks.

… And the cons

Despite the potential savings, the percentage of pet owners who hold pet insurance is only in the single digits, according to various sources.

A policy may not be cost-effective for you, Hicks says. “Most policies exclude pre-existing conditions or chronic ailments, so if your pet is already sick or injured, it’s unlikely you can acquire affordable pet insurance that will cover the costs you’ll likely face.”

Another Angie’s list member insured her cat, but only after the pet was diagnosed with feline immunodeficiency virus. “Because it was a pre-existing condition, her plan didn’t cover it,” Hicks says, adding that the plan also excluded coverage for the type of trauma when the cat fell and suffered a tail injury.

Get referrals

If you think you want to purchase pet insurance, get some recommendations before you shop around. You might start with your vet.

“If you have a purebred animal, you should also talk to the breeder about any physical problems with your pet’s parents so that you can make sure you purchase a policy that covers that issue,” says Ng. “Some pets are more prone to illness, and breeds such as dachshunds and other dogs are prone to back issues that can be expensive to fix. You want to make sure an insurance policy will cover these issues.”

Ng recommends finding a reputable insurance company with representatives who will work with you to tailor a policy to your pet and your budget. He suggests checking online reviews and asking a lot of questions, such as whether you’ll be able to reach a company representative 24 hours a day with questions about your coverage.

Compare pet insurance policies

Hicks offers these tips for sizing up pet insurance policies:

  • Ask questions and find out exactly what the policy covers and what it excludes.
  • Look at the monthly premium and think about how it compares with your likely out-of-pocket costs.
  • Will the premium increase as your pet ages?
  • Is there a deductible and/or copayment? Do those costs vary based on the type of service needed?
  • Does the plan cover things like regular checkups, vaccinations and dental care? Or do you have to pay an extra premium for this sort of wellness care?
  • What crisis-care or long-term care issues are covered?
  • If you have more than one pet, see if there are discounts on monthly premiums or fees.

The bottom line

“Just like any other insurance, it’s hard to tell if you’ll need pet insurance ahead of time,” says May, of the American Veterinary Medical Association. “It’s an optional expense, so you have to weigh the risk that you won’t need it against your happiness that you have it if you do need it.”

If you choose not to purchase pet insurance, the University of Tennessee’s Ng recommends establishing a savings account dedicated to your pet care expenses so your budget won’t be busted by unexpected vet bills.