Will Pet Insurance Prevent My Sick Good Boi from Bankrupting Me?

Be forewarned: The math can get ruff.

Pet_Insurance

The vet bills started pouring in almost immediately after my girlfriend and I adopted our dog. He came with some parasitic worms (gross, I know), which required a $150(ish) vet visit and a $50(ish) dewormer. Shortly after that, he came down with an ear infection, so the vet charged us another couple hundred bucks to have his ears cleaned, before sending us home with a $50(ish) bottle of prescription-grade ear cleaner. Next, his separation anxiety started acting up, so the vet performed some blood tests (another $300) before putting him on a daily anxiety medication, which has since become a monthly payment of about $100. Now, most recently, he started having allergic reactions to the grass in our new backyard, so we took him in for another $150 check-up, where we were sold $75 worth of allergy pills and sprays.

Since we don’t have pet insurance, we paid everything in full. In fact, hardly anyone has pet insurance: While there were about 90 million pet dogs and 96 million pet cats in the U.S. alone in 2017, the latest North American Pet Health Insurance report shows that only two million pets in both the U.S. and Canada were insured that same year (or roughly less than one percent).

I obviously can’t say for certain why almost all pet owners go without pet insurance, but it probably has something to do with the fact that insurance policies are super complicated (and typically expensive in their own right). In that case, allow us to help…

What Exactly Is Pet Insurance?
Pet insurance is essentially health insurance for pets, and much like human health insurance policies, pet insurance policies come with various premiums (monthly payments) and deductibles (the amount you pay before the insurer pays). Many pet insurance policies also have an annual maximum that the insurer will pay — and if you want a higher maximum, you can expect to have higher premiums and deductibles.

However, unlike human health insurance, with pet insurance, you typically have to pay for vet bills out-of-pocket before filing a claim with your insurer to be reimbursed at a later date. “With pet insurance, owners pay the full amount of the veterinary bill to the hospital, and then deal with insurance companies after the fact to get reimbursed,” explains Rob Warren, communications and marketing officer at the University of California, Davis Veterinary Hospital.

What Does Pet Insurance Cover?
There are two main types of pet insurance: Accident-only coverage (which, for example, might cover an instance when your dog eats something they’re not supposed to) as well as accident and illness coverage (which would also cover things like cancer, arthritis and other illnesses). Some providers might offer wellness coverage for routine care as well — things like annual check-ups, flea and tick treatments and vaccinations — but you can expect to pay a lot more for stuff like that.

However — and this is important — pet insurance doesn’t cover pre-existing conditions, and many insurance companies have been known to stretch the term “pre-existing,” especially when dealing with animals who might, for whatever reason, have vague medical records. For example, when we took our dog in for his separation anxiety, our vet informed us that it would now be considered a pre-existing condition, and therefore, something that could never be covered by pet insurance (although, many pet insurance companies don’t cover “therapies” and medications for behavioral modifications, so it might not have been covered anyway).

In fact, many companies have a waiting period between when you purchase your policy and when the coverage actually begins to prevent people from getting insurance when their pet is already sick or injured. Insurers might also require you to take your pet in for a check-up before the coverage kicks in so they can account for any of those pesky “pre-existing conditions.”

How Much is Pet Insurance?
The average monthly cost of accident and illness pet insurance is currently $44.66 for dogs and $27.93 for cats (deductibles typically range from $0 to $1,000). This really depends on the type of insurance you want, though: For example, the average cost of an accident-only policy for dogs is only about $15 a month.

Then, much like human health insurance, the state of your pet (and even their breed) can make that premium go either up or down. For instance, the average accident and illness premium for golden retrievers is $40.56, whereas the average payment for beagles is only $34.32. (Golden retrievers are apparently more likely to eat things they shouldn’t eat.)

Additionally, as I mentioned earlier, many of these insurance companies don’t offer help with pre-existing conditions, and as your pet gets older, they tend to pick up more and more of such ailments. So finding a company that’s willing to insure an older pet, let alone at a good price, can be a struggle.

How Much Can Pet Insurance Save Me?
This really depends on what goes down. Kristen Lynch, executive director of the North American Pet Health Insurance Agency, sent me some of the most expensive North American claims in 2017 — they included a whopping $44,069 claim for a bulldog with pneumonia and a $25,177 claim for a cat that needed a kidney transplant. Those are extreme examples, though: The average cost for the most common dog treatments is $252.75, whereas the average cost for most common cat treatments cost $266.79. Frankly, though, you really only come out on top, financially speaking, when the worst happens. Which naturally brings me to my last point…

Is Pet Insurance Worth It?
In 2016, Consumer Reports crunched the numbers on two common cases — one unhealthy dog and one relatively healthy cat — and found what most people might find when shopping for health insurance: Some policies paid out more than they cost, while others didn’t.

But once again, pet insurance is only really worthwhile for large, unexpected expenses. In fairness, though, that’s how all insurance works: We pay a monthly fee to save us when something really, really bad happens — even if that bad thing might never happen. “Insurance wasn’t designed to be a health spending account,” Lynch explains. “The only way you get to break even or even ahead of the cost of premiums is if your pet is ill or has an accident. Ideally, my pet will never be sick, and I won’t break even on the cost of coverage. Some folks do see more in coverage than they do in premiums, while others are close to breaking even each year.”

So, at the end of the day, it’s impossible to answer whether pet insurance is worth it. Hopefully, nothing bad will ever happen to your precious pup, and if that’s the case, pet insurance is pointless. But lemme tell you: Pets are oftentimes unpredictable, and when your good boi swallows a toy when you’re not looking — an accident that could cost you $7,000 — having pet insurance may very well save you the trouble of having to decide between your dog and your life’s savings.