There are so many positive reasons to own a pet. These include companionship, a way for children to learn responsibility and empathy, a way to reduce stress and boost good health—and oh yeah, they are so darn cute and cuddly. But along with the love and good times comes the inevitable cost of veterinary care, which can be eye-popping when a major illness or injury occurs. And no one wants to be forced to decide on economic euthanasia for a beloved pet just because the cost of treatment is too much to bear. To help avoid these unexpected expenses, many pet owners are now buying pet insurance.
Pet medical costs are significant—no doubt about it. Cancer treatments can top $5,000; surgery to fix a torn ACL can run more than $3,000. Older cats often need tooth extractions, which can be thousands of dollars. And sadly a pet’s catastrophic illness or injury can often spawn a life or death decision. Consider that along with the statistic from Bankrate.com that only 39% of Americans would be able to cover a $1,000 unexpected expense. So think about what would happen if you got hit with a vet estimate of $2,000 or $3,000 suddenly for your furbaby.
So for these reasons, the pet insurance industry is growing. But here’s the crucial question: is a pet insurance policy worth it? Unfortunately, there is no simple answer. Let’s look at the issue more closely.
In 2018, the number of pets insured in North American grew 18% to 2.16 million pets, according to the North American Pet Health Insurance Association. In addition, the trade group states that the majority of policies are specifically for accident and illness coverage (98%). In the U.S., the average annual premium cost for dogs is $566, and $354 for cats.
But let’s look at that a little differently. According to Statista, there are about 183 million pets (cats and dogs) in the U.S. today. So the number of pet owners with pet insurance is less than 1.5%. So clearly we are still in the early days of pet insurance becoming commonplace. According to an employee at Smith Veterinary Hospital in Santa Fe, the number of patients with pet insurance is rising. “I think it is growing because people are becoming more aware of its availability.” She notes that the pet insurance companies are allowed to put their brochures in the Smith lobby so that pet owners can learn more.
“I have it [pet insurance] since my dog was nine weeks old. I used to have wellness and major medical. I dropped the wellness because I wasn’t using all the benefits. She is now 10. Unfortunately (and fortunately) every year her medical bills far surpass the premiums and $100 deductible. I am grateful I have it.” –Janet Wolbarst
Consumer groups have some strong opinions about the financial validity of pet insurance. Consumer Reports feels it is a much better idea to put aside the money you would spend on pet insurance into a separate fund to use for when you do need it. And both Consumer Reports and Checkbook.org recommend against buying insurance to cover routine wellness care and just sticking to illness and injury coverage if you decide to purchase a pet insurance policy.
Here’s some good information to consider. A few years ago, Consumer Reports ran a study that compared the cost versus payout for nine pet policies for a healthy 10-year-old dog. They calculated that the dog’s lifetime vet bills would run about $7,026, which in every case would be less than the total premiums paid on those insurance policies. However, when they included hypothetical medical problems that boosted vet bills to $12,685, five of the nine policies would have paid out more than they cost. So according to this study, there’s a 55% chance that you would come out ahead by having the policy.
“This is now my third dog and it will be the first time I invest in pet insurance. My previous Golden had so many problems and the bills were so high. I am not taking a risk this time. And I am also getting a breed with fewer inherent problems.” –Roberta Shapiro
Major policy providers include the ASPCA, Embrace, Healthy Paws, PetFirst, Petplan, and Trupanion. Most cover only cats and dogs, but one company, Nationwide, also insures birds, rabbits, snakes, turtles, and other animals. Read over policies carefully before selecting one. All policies have a variation on deductibles, co-payments, and premiums. Some policies have an annual amount to be covered while others have no annual ceiling. And some pay out a flat percentage after a deductible is met, while others will only cover “usual and customary” costs. So you must do your homework. The cost of policies also tends to jump for purebreds (with their hereditary problems) and older pets. Consider opting out of the wellness coverage since most pet owners will rarely find that coverage to be of value (financially speaking). And no policy will cover a pre-existing condition. So get your pet covered while it is young and healthy!
“We have pet insurance through Healthy Paws and it costs us $35 a month. We started when our pet was a puppy and it has saved us a bundle.” –Laura Chatain
The Balance, an online personal finance resource, recently published “The Six Best Pet Insurance Options of 2019,” which may be useful to review. Another terrific website to check out is Pet Insurance University, which is written by a vet for pet owners.
Another idea is to find vet clinics that have a sliding scale or subsidized payments for customers who qualify (income qualifications). In the Albuquerque area, check out Animal Humane’s donor-subsidized Veterinary Clinic. You must provide proof of income qualification at check-in and all sources of income must be included for all wage-earners in the household. In addition, the Clare Eddy Thaw Animal Hospital located at the Santa Fe Animal Shelter main campus also offers a sliding scale for qualified customers (proof of need is required and must be arranged before treatment).
It may come down to this: if you can afford a policy, it can certainly give you peace of mind and could be of value if a major illness or injury strikes your pet. One thing all experts agree on is that starting a policy when your pet is very young and continuing with it gives the best value. In that way, you should be covered if an unexpected major illness or injury occurs—and avoid a catastrophic financial loss. Purchasing a pet insurance plan is both an emotional and economic decision that should be based on your personal outlook and financial picture.