Is Pet Insurance Necessary?

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Cute PuppyI wrote about the total cost of owning a dog a few weeks ago and a couple of you chimed in about including pet health insurance. Even one of my friends, Nick, IM’d me to say that I should really consider getting pet insurance (he recently got a dog and had some medical issues to contend with) because it’s worth the peace of mind. I’ve never had a pet outside of some fish so I didn’t even think about getting insurance but it makes some sense.

For those, like me, who aren’t familiar with pet insurance, it’s just like your medical insurance. You pay monthly premiums and the pet insurance covers certain medical procedures and checkups. The more comprehensive the insurance, the more it covers and the more it costs. The big difference between the two is that with regular medical insurance today, the doctor usually interfaces directly with the insurance company. With pet insurance, you typically pay out of pocket and then request a reimbursement from the insurance company. I prefer the first way because then the doctor is often compelled to accept the price negotiated between the company and the doctor, which is often lower than the standard fee. By paying out of pocket first, you have to do the negotiating. (this may just have been the case with the insurance plans I saw)

Nick sent me a link to Veterinary Pet Insurance, the company he has his dog’s insurance with, and in reviewing the documents it seems pretty straightforward. VPI covers 90% of the scheduled allowance after a $50 per-incident deductible. If the procedure costs $1000, their benefit schedule covers $900 for that procedure, then they will pay out $765 ($900 – $50 x 90%) for the incident. Much like your standard medical insurance, they have a benefit schedule. Unlike your standard medical insurance, they don’t negotiate with the practitioner, you have to negotiate with them. I don’t know how flexible vets are about pricing but as I mentioned earlier, it’s easier if its the insurance company doing the negotiating (especially if you’re feeling the pressure because you know your pet needs the procedure!).

I entered in a quote for a two and a half year old Scottish Terrier and the comprehensive plan, with a $14k annual benefit allowance, cost $20.92 a month ($251/yr). The standard plan, with a $9k benefit allowance, was $11.33 a month ($136/yr). How does $251 a year stack up against the typical procedures a two and a half year old dog will face? I don’t know. I imagine though that, given it’s insurance, $251 is probably a bit above average (that’s how insurance companies work!).

Will we get pet insurance? Not sure yet, I think we will have to decide once we’ve adopted a dog and have a better idea of the types of medical expenses the breed will likely face in their lifetime. Another option would be to cover them when they are young and then once again when they are older. This opens up the potential for uncovered issues in the middle but depending on the price, it might be worth it. I don’t want to make an emotional decision but I also don’t want to be taken to the cleaners either way.

Anyone have experience with any other pet insurance companies or with pet insurance in general?

(Photo: cloneofsnake)

{ 30 comments, please add your thoughts now! }

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30 Responses to “Is Pet Insurance Necessary?”

  1. Patrick says:

    My mom has pet insurance on all 3 of her dogs and she says it is totally worth it. One of her dogs had a serious surgery that would have cost thousands if not for the insurance. Not all dogs have serious problems, but it could save tons of money if something serious were to arise.

  2. I’ve never found pet insurance to be worth it, or at least not for my cats. The likely and maximum benefits just don’t justify the annual premiums.

  3. CK says:

    Let’s see $251 a year for 12 years (rough avg life of a dog) = $3012

    Seems like you could self insure and probably come out ahead.

    (Plus, I believe this discussion is coming from a man who doesn’t have comprehensive or collision on his car.)

  4. Kelli says:

    I don’t think it’s worth it. I’ve had a dog for 5 years and usually only spend $50/year on the annual checkup/vaccines. This year my dog had a severe allergy reaction and we had to go to a special veterinary school to get treatment. Even that only cost $170 including medicines. Out of a pets entire (~15yr) life you may only spend $250+ one year. I think this is one of those things it is better to just put a little money aside for every month. You can “insure” the dog yourself for much cheaper than $250/year.

  5. Miss M says:

    If you do decide to get it, get it right away. They will exclude anything considered a pre-existing condition so if it’s been documented by your vet that your dog has a hip problem, they’ll exclude any hip treatments. They’ll also exclude anything considered hereditary or a known problem with the breed. My new rescue just had a $1400 surgery, it would have been excluded cause it’s a congenital defect known in boston terriers. What is pet insurance good for – if fido gets hit by a car or has some other accident. That is usually expensive and usually covered by pet insurance. I would have benefitted had I taken out pet insurance, but it’s too late now. My doggies have long medical files….

  6. Bill says:

    I think it is based on the pet owner. I’ve had dogs all my life and have 2 now. I’ve never met a dog worth $1,000 of vet bills. I do have a friend who spent $6k trying to save a 10 year old lab from cancer. He probably needs pet insurance, I’ll pass.

    • John says:

      “I’ve never met a dog worth $1000 of vet bills”

      Hmmm…I would imagine that is because you view them as disposable objects. I would say a majority of pet owners share your view.

      I am pretty frugal and tight with finances but I spent over $700 on pet bills last year. If you can’t see yourself allocating $50/month for pet health costs then you really shouldn’t even bother owning a pet.

  7. David says:

    If you do want it, get it on your animals while they are young. Most insurers will not start a policy on older animals at all, as I found out first hand.

  8. Beth says:

    Some insurers don’t cover pets over a certain age, so be careful! Those lifetime estimates may not apply.

    I’ve been thinking about adopting a cat and I’m not sure if I’ll go the insurance route. I’ve read quite a few financial blogs that recommend building emergency pet expenses into your emergency fund. That way you’re covered if something goes wrong, but you’re keeping your money in your own pocket and earning some interest on it to boot.

    However, it might be easier for some people to pay the monthly premium than save a couple extra thousand dollars — I guess it depends on the person.

  9. velvet jones says:

    I got a pedigree kitten about 4 years ago. I called the vet I would be taking her to inquiring about pet insurance. He said that in his opinion, it wasn’t worth it for an indoor cat. He said having $1,000 to $2,000 on hand should cover most emergencies. Luckily she’s been fine so far (I pay about $90 for annual checkups/vaccines/etc.) and have $1,000 set aside if there should be an emergency. If I had a big dog, I would keep more money on had (about $3,000) as they are more prone to hip surgeries. Depends on the type/breed of animal you have and how active it is, etc.

  10. I don’t take out insurance for my pets. I figure I’ll take the risk and pay out of pocket for whatever’s needed. Gosh, I guess if people can skip on health insurance (I know a lot who do), what more insurance for a pet?

    Wow your pet insurance quotes are not far behind that of term life insurance quotes!

  11. RRPF says:

    VPI gets a lot of bad press online. I’m going to use them for my bird (they do offer avian/exotic which is nice) but for my cat, I’m going with Pet Plan ( Cheaper than VPI and really good reviews online.

  12. nickfro says:

    Jim – While I’ve only ever used VPI (and there are plenty of other options), I can tell you that one trip to the emergency vet and your coverage will pay for itself… The pup had a small (viral) growth on his leg that needed to be removed to prevent severe bleeding and the potential for infection. It had to be done over New Year’s weekend. The cost for the exam, surgery, antibiotics, and aenethstesia was about $600. VPI covered around $300 of the cost, on a policy that cost me $20/month. Had I been able to take him to my regular vet, it would’ve cost about $200-300 less, and I still would’ve more than broken even. I view it like a Home Warranty — it’s peace of mind. My $0.02.

    • CK says:

      So you paid $20 a month for how long to get $300 dollars of benefit? If you have the ins for more then 15 months you’re in the hole.

      • John says:

        And if Nickfro’s pup had other health issues he would have saved even more. What’s your point? If you did a cost benefit analysis and decided pet insurance wasn’t for you then fine. Don’t go around trying to apply your situation to everyone.

  13. thomas says:

    Just like any insurance, the true value comes when you need to use it. For example, I haven’t had to use my health insurance in 3 years, but I’m certainly not going to cancel it to save a buck. Can insurance save you money? Yes. Can you “waste” your money? Sure. The cost of owning a pet and healthcare is rising just like people, so it is not out of the world to consider this. I do not have PI for my pets, but definitely see the value and have friends who have been able to take advantage of their policies.

    People without pets shouldn’t be allowed to weigh in on this conversation because they do not have a frame of reference.

    • CK says:

      Comparing human health ins. and pet ins. is apples to oranges.

      In my view insurance is supposed to protect your from large financial hits.

      I love my dog but I’m not going to spend a large amount of money on him if he’s sick so pet ins. isn’t for me.

      If you’re the type of person who is going to pay anything for your pet then it’s probably for you.

  14. Deby says:

    I find that pet insurance, for us at least, not to be worth it. We’ve had a couple of emergency visits over the years, but nothing we couldn’t handle. We set up a savings account for all pet expenses (food, vet vists, toys, etc.) for the year, so we earn interest on the money before we need it, and have the money available if an emergency does come up.

  15. Jim says:

    “How does $251 a year stack up against the typical procedures a two and a half year old dog will face?”

    For general reference: According to the American Veterinary Medical Association, in 2007 the mean annual expenditure on vet bills per cat was $81 and for dogs $200.

    Your 2.5 year old dog is probably less than the mean cause the mean would be skewed towards older dogs with illnesses related to age.

    I’d also look closely at the policy from any pet insurance. Looking at VPI’s site I found their maximum payouts on any procedure are relatively low IMHO. THey seem to max out around a few hundred dollars for most procedures and the most expensive things are around $1000. So if they only pay out max of $1000 for a very expensive procedure then that really limits what you’d get from them.


    • Beth says:

      The AVMA estimates don’t always mean a whole lot because many insurance companies don’t cover routine check ups and vaccinations (which accounts for a lot of that mean of $200). It really depends on the policy.

  16. Those companies are making piles of money, some of the profitable kinds of insurance plans. That’s not an accident.

  17. Ari says:

    We went with VPI when we got our rescue 2 years ago. Our coverage paid for itself last year for things like conjunctivitis, ear infection and some stomach ailments. After having a standard poodle who had bloat (2x), ear problems and hip dysplasia, my wife and I figured the $300 a year of insurance was worth it. We’ve been happy with VPI.

  18. Anonymous says:

    I live in NYC where vet costs are outrageous. I had a Cairn with kidney issues for 1 year and my bills were close to 7k. I have insurance on my dog now and wonder about the rising cost of premiums but based on my experience; the premiums are nothing compared to what I would have to spend if he was really sick. My premiums add up to 600$ per year.

  19. Chris says:

    Pet insurance can be downright essential in many cases. We have four cats (indoor only), who had never experienced anything worse than a cold. We figured that $20-30 here and there wouldn’t hurt for some anti-biotics.
    Then one of our cats (4 years old at the time), developed a urinary blockage that put him in emergency care three separate times. Each of these bills came out to $150-$250 per visit. We finally considered consigery, due to the 99% success and survival rate of comparable cases, and the young age of the cat. All told, we spent around $6000.
    If we had had insurance, it would have come to around $800 or so. For all of our cats and one dog, our insurance bill is $600 a year – small price to pay considering what we’ve already been through.

  20. VannessaBerg says:

    sounds like most vet insurances have some kinda ‘scam’ 2 them but so far iv been wit PET ASSURE ( 4 2 yrs and they have been so helpful and cheap!!i luv that they take 25% off the bill right @ the vet! im so thrilled wit them! 🙂

  21. Matt says:

    I have a 10 year old labradoodle that hasn’t had any health problems, so I probably saved thousands from not buying pet insurance. But if I bought an English Bulldog, or another breed with all sorts of health problems, I would definitely buy the insurance.

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