Pet Insurance: Is It Worth It?

This post was featured in Carnival of Personal Finance at Compounding Returns

Every time one of our pets gets sick, I ask myself this question: why don’t we have pet insurance?

In October our six-year old cat, Charlie (yes, this is his photo), suddenly stopped eating and drinking. He was lethargic and sleeping all day long. On the second day, when he refused his favorite treats, I got really worried. You see, Charlie is a big eater. He eats pretty much all the time. As long as I remember him, he never ever refused a treat. Immediately, Beaker and I took some time off and took Charlie to our vet.

This where the whole financial ordeal starts (and I am not talking about bank fees or debt management.) Charlie was hooked up to an IV to ensure that he gets hydrated. His blood and urine were tested the same day. Cost: $386. We were back to the vet the next day for test results. The results were normal, and our vet shook her head saying that she was puzzled why Charlie was not eating or drinking. Two days later we were back again but this time for an ultra sound and consultation with a specialist. The ultra sound showed nothing. The specialist prescribed some anti-nausea pills and send us on our way with $450 dollar bill charged to our credit card.

Back home I immediately turned on my computer and started researching pet insurance plans. Graduation from college was not required to figure a few things out. On average, pretty much any insurance company, covers 80% and has a deductible averaging from $100 to $500.

Another good reasons to have pet insurance is to protect your pets when you hire companies to provide services at your home like pet waste removal and dog walking.  It’s better to be covered then have someone accidentally injure your beloved pet!

Assumption A:

– Neither our cat nor our pug get sick too often. Major things usually happen every other year. I assumed 18 months average for big bills;

– Average monthly premium for two pets is about $55 or about $27 per pet;

– Average deductible is about $250 (per pet).

Calculations (some numbers are rounded up):

18 months x $27 in insurance premiums = $486 insurance premiums paid
$486 + $250 (average deductible a year) = $736 our total insurance cost
$850 (rounded up and paid for Charlie this month) x 0.8 insurance coverage = $670 would be reimbursed by the insurance.
$736 – $670 = $66 paid to insurance and not recovered

Conclusion: not bad, right?

Assumption B:

Same assumptions as in Assumption A, except that this time we need to pay $3,000 in vet’s bills.

18 months x $27 in insurance premiums = $486 insurance premiums paid
$486 + $250 (average deductible a year) = $736 our total insurance cost
$3000 (in vet’s bills) x 0.8 insurance coverage = $2,400 would be reimbursed by the insurance.
In this case insurance pays even more: $1,664.

We might be getting a pet insurance after all.

Am I looking at it from the right angle?

If you do have pet insurance, please share your experience. If you don’t have it, what are your reasons for not having it?

27 thoughts on “Pet Insurance: Is It Worth It?”

  1. Our Bichon had a bladder stone 3 years ago that needed surgery to remove. Our normal vet wanted $800 for the procedure. Based on the recommendation of some friends, we found a vet in a nearby town that only charged $250 for the whole deal. He’s a country vet that handles everything from dogs to horses. He did a great job and saved us quite a bit of money.

    1. I don’t know if I would change my vet for someone cheaper. My vet knows our pets from the day they came to live with us. I trust her. I would be afraid to go to someone who knows nothing about my pets but is cheaper.

  2. I have never gotten it, every time I looked at it, there seemed to be way more exclusions and deductibles and such that I wasn’t comfortable with. I recommend just throwing some money aside every month even when the pet is healthy, to cover any potential costs. It might not cover everything depending on how big the problem is, but if you start doing so when the pet is young, you can build up a pretty hefty fund by the time problems start to get more likely.

    1. I think that’s exactly what we are going to do. More I read, reseach and calculate, it makes sense to save up, instead of buying insurance.

  3. We have considered it, especially when we had our escape artist Aussie- what if he got hit by a car? But at the same time, you have to look at the exclusions- a lot of pet insurances will not pay anything for the most common ailments in breeds. So if you have a GSD, it won’t pay for hip dysplasia, for some breeds, it won’t pay for cancer treatment, others it won’t pay for eye problems, etc.
    Instead of trying to play the “will insurance cover this” game, we decided that we would save for vet care. If a pet needs an emergency procedure, that comes out of the emergency fund.
    In the past, I just shoved a whole bunch of money in savings and figured I’d take it when I needed it for what I needed it for. In 2012, I’m going to try tracking a little better and assuming X dollars are for pet costs, and see where my guesses take me.
    I hope your kitty is doing better now. Tonight, we’re taking our Beagle back in because after almost 20 days on antibiotics, her lymphnodes are still swollen and there’s a lump on her back. We’ve already paid around $600 and who knows what tonight’s visit will entail/cost. But I’ve got the savings, so I know it’s paid for.

    1. I hope your Beagle will get better soon. It can be very difficult and depressing to have a sick pet.
      I think that what we will do: just try to save up for our pets’ medical expenses. Our pug seems to have respiratory problems, almost a pre-ezisting condition, that probably will limit his coverage. there are plenty exclusions in insurance plans that, after all, make those monthly premiums almost a waste of money.

  4. How is the kitty? Improving, I hope.

    I just had a kitty develop fatty liver syndrome. Sadly, she passed away, but not before we tried medicine, a feeding tube, and about $900 in treatment. I would do it all over again in a heart beat! 2/3rds of cats recover from this, so while the odds weren’t great, they were in our favor. This particular cat was one that I had recently inherited from my cousin and the vet thinks the stress of moving and losing her owner might have just been too much. 🙁

    Charlie looks adorable. I will be hoping for a full recovery for him!

    1. I am so sorry to hear about your cat! It is very hard to go through losing a pet. I would spend our $1000 all over again just to save Charlie. I would not hesitate a bit. Yes, Charlie is uch better now. Still no one knows what was wrong with him!

  5. Insurance is exactly what it is. It protects you in case bad stuff happens. Based on the numbers you provided, it looks reasonable to purchase one. But once you buy it, it doesn’t make sense to cancel it in the future even if your cat doesn’t get sick for the next 2-3 years.

    1. I can see being tempted to cancel it if everything goes fine for the next 2-3 years. And you are right, it would not make sense.

  6. Pet insurance is worth every penny. Our dog needed an operation and without insurance we could not have done it. Apart from that the older the pets the more you need insurance (and harder to get at good price).

    1. This is my biggest fear to have to go through something big and not hae enough money to do it. That’s why I keep looking at some insurance plans. But still… I am not convinced.

  7. Aw Charlie is cute, even when he’s sick. We don’t have pet insurance but I wonder if we shouldn’t get it for our dog because he’s getting older (for his breed). We’ve also spent a LOT over the past couple of years on vet bills for our cat, so that would have been nice to have in retrospect.

    1. More I think about getting insurance, more doubts I have. Maybe it is worthwhile to just have a seperate account for pets and try to save as much money as possible for their old(er) age.

    1. When you take a responsibility over someone, it is your duty to take of that someone. It doesn’t matter if it is a dog, or a cat, or another living being. You are responsible for it.

      1. Agreed! It will be very hard for me after caring for my animal since it was 6 weeks old to just say “it’s just a dog” I love my pet. With that in mind, I boosted my emergency fund savings to account for such emergencies

    1. 🙂 Life is easier that way, isn’t it? I cannot imagine myself without my pets. They are my children.

  8. I don’t have pet insurance per se but I do have a reimbursement plan. I actually have two things. Banfield wellness plan. Which takes care of stuff like shots and doctor visits then I have a major medical plan from VPI. VPI basically charges us 250 year to reimburse us if we ever have a major surgery.

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  10. One thing to watch out for on pet insurance is a maximum pay out for individual procedures. Some plans have limits on what they pay. So for example you pay the $200/yr (or whatever) for the insurance and then your pet has a majory injury or illness. The bill from the vet is $5000. However this is when you find out about the maximum payout from the pet insurance when the insurance check is only $2300. Cause thats the maximum they pay. THAT type of pet insurance doesn’t seem like a good deal at all if you ask me. The point of such insurance is to help you handle the very big bills.

    VPI had such maximums on their policies when I looked last. Other insurers may too. You have to read the fine print of the policy to find it.

  11. The peace of mind I get makes it worthwhile. My puppy, Ozzy, started vomiting constantly. He vomited 6 times in an hour, and was clearly very ill. I was able to rush him to the vet ER and sign off on everything. His bill was over $700, but the treatment was life saving. I submitted my claim to Petplan, was able to track the claim online, and ended up getting hundreds reimbursed-just paid my deductible and the 20%–(I opted for 80% coverage). My policy is less per month than a couple of coffee drinks, and I know no matter what my little daredevil (he EARNED the name Ozzy) gets into, I am covered. I decided to get it but keep a high deductible. It works out to under $20 a month. If you do a higher deductible and only 80% refund, you keep the monthly cost low but have some solace knowing if they need, like, a $1000 surgery you won’t be totally responsible!

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