Updated: 11/4/2010 9:00 AM ET|
Should you buy pet insurance?
With vet bills soaring and fancy new treatments available, it's an option more owners are considering. Plus: 8 ways to cut the cost of keeping a healthy pet.
A few years ago, pet insurance would have ranked right up there with life insurance for children and dread-disease coverage on my list of policies you don't need.
Now I'm not so sure.
I still believe most people are better off forgoing pet insurance and instead putting the money they would have spent on premiums into a savings account. Pet coverage can cost $2,000 to $6,000 over the life of an average pet, and the chances are slim you'll ever need to shell out that much for treatment.
But if you're the type of person who would do anything to save your pet, including spend thousands of dollars on medical care, pet insurance might be a preferable alternative to going into debt.
New treatments and monstrous bills
What's changed in recent years is the state of veterinary science, as well as the economics of running a veterinary practice. Vets today can offer treatments that were unheard of just a few years ago -- and at prices that could make you howl. Consider:
- Treatments once reserved for humans, from radiation therapy to kidney transplants, are now available for pets. That means once-fatal conditions are now treatable at costs ranging from $1,000 to more than $5,000.
- Vets have access to increasingly sophisticated and costly diagnostic tools, such as MRIs. Such screenings not only boost the cost of exams but often detect problems that once would have gone unnoticed and untreated.
- These expensive tools and procedures have helped create health care inflation in the pet doctor world.
Of the estimated $45.4 billion Americans spent on their pets in 2009, $12.2 billion -- 27% of the total cost -- was expected to be devoted to veterinary care, according to the American Pet Products Association. That would be a 10% increase from 2008.
But pet owners with insurance are still a small minority. The American Veterinary Medical Association estimates that in 2007, 72 million dogs and nearly 82 million cats were kept as pets in the U.S. Yet there were only 850,000 pet insurance policies in effect that year, according to the National Commission on Veterinary Economic Issues.
Insurers have teamed with the American Kennel Club and Petco Animal Supplies to offer the insurance, and more than 1,600 companies -- including Office Depot and Google -- provide the coverage as an optional employee benefit.
Deductibles, exclusions and surcharges
The oldest pet insurer, Veterinary Pet Insurance, has seen its revenue climb at an average annual rate of 26.8% since 1998. The company, which has about 71% of the U.S. pet insurance market, had gross sales of $149 million in 2007.
Pet insurance is far from a cure-all, though:
- The policies typically have deductibles, co-pays and caps that limit how much will be paid out annually.
- Pre-existing problems and hereditary conditions, such as hip dysplasia in retrievers and German shepherds, are normally excluded, although one insurer, Embrace Pet Insurance, covers hereditary and chronic conditions.
- The older your animal, the more you'll have to shell out in premiums. Some insurers don't cover pets older than 9; others levy stiff surcharges.
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I appreciate the writer's overview on both sides of the "pet health savings account" argument. But I have to admit, I'm for pet insurance. While a savings account is a good idea in theory-- if you actually think about it-- it doesn't make much sense.
The typical pet insurance premium costs around $30 a month. If you were to put that $30 into a savings account each month instead of purchasing a pet insurance policy-- you would have less that $100 saved up in three months. What if your pet had a sudden accident or illness one or two months into saving? You wouldn't be able to afford much treatment.
Pet insurance companies like Pets Best Insurance reimburse 80% of the actual vet bill after a deductible. Ultimately, pet insurance helps to make vet costs more affordable for pet owners. This specific company was founded by the very vet, Dr. Jack Stephens, who founded pet insurance in the US in the early 1980s. I happen to work for the company and I also have my dog insured here.
For more information about pet insurance visit wwwDOTpetsbestDOTcom.
if your going to get insurance for your pet.. make sure you really read the fine print, figure out what specifically you are going to want it for.. and keep up on your policies....
i dont do insurance for my animals.. (i have 7) i put what i would have spent in premiums in a savings account.. i do not use that for annual exams, vaccinations etc.. it is strictly used for dentals, diagnostics, emergencies.
My dog costs me over $1000 a year. Allergies, cancer, surgeries--you name it.
VPI either rejected my claims or paid minimal on a large bill. I got rid of them after a couple of years because I realize how much they excluded. I now have PETPLANUSA and they do exactly what they are supposed to! I elected for 100 deductible and 20% co-pay. (You can adjust your level of coverage to whatever you want.) I have submitted several 1000+ claims and here is how they pay:
1000 x 80% (their responsibility) = $800 - 100 deductible= $700 PAID! You will owe $300.
Easy peesy! LOVE PETPLANUSA.COM!!
As someone who has pet insurance with another company, I can say that pet insurance does not cover everything, including dental, unless you pay a monthly premium of $65 or more. Don't get me wrong, pet insurance does cover 70%-100% depending on how much coverage you have but there are limits, restrictions, and sometimes a deductible. That is why I recently purchased Pet Assure. Pet Assure saves me 25% on services at their referred Vet's office, along with other affiliates in their network. It was automatic, no claim forms, or waiting for a check in the mail.
The Vet I found was great and less than a mile away. I have already saved more than half of my one year Pet Assure membership in one visit! My dog needed a dental cleaning (an expensive procedure), which was not covered by my pet insurance. Not only did I get a good price from the Vet but also 25% on top of that! Can't beat it.
Thank goodness for Pet Assure!
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