The decision whether or not to purchase pet insurance comes down to a series of key questions. The first is, Have you ever considered it?
Pet insurance is a relatively new product. Many pet owners are not familiar with it, and even some veterinarians have only slight experience around the issue, and do not routinely discuss insurance with their clients. So if insurers wonder why only a small percentage of pet owners obtain insurance, the first answer is that for most owners, the possibility hasn’t even been on the table.
It should be, of course. Pet insurance is a product that offers extensive benefits to certain pet owners, perhaps somewhat less to others, but should be looked at by all.
However, cost and complexity are major deterrents.
Purchasing insurance is a form of long-term thinking – for a reasonable investment now, we protect our pocketbooks against the consequences of major events later.
In an ideal world, we would all be able to think that way and to take advantage of the protections that are available.
But of course, we don’t live in that world. Some people can’t cope financially or temperamentally with that kind of analytical approach – and buying any kind of insurance is an analytical purchase if anything is.
People love their pets. More than ever, in fact – every study shows this. People spend big money on their pets. Even people who are less than well-off can spend a surprisingly high percentage of their income on their beloved animals.
But most of those expenditures are, reasonably enough, aimed at immediate needs and pleasures. Buying a pet bed that your dog or cat will enjoy tonight provides an immediate payoff that paying an insurance premium doesn’t.
Unfortunately, sooner or later a major, unanticipated medical expense will probably come up, and the loving, attentive pet owner may find themselves unprepared and short on funds.
Some animals are more prone to incur such expenses than others:
- Dogs slightly more than cats
- Large dogs somewhat more than small dogs
- Purebred dogs definitely more than mixed breeds
- Pets with outdoor freedoms more than indoor animals
Rural and urban pets face different health and accident threats – more ticks and snakes in the country, more speeding cars in the city – but because rural pets generally do have more outdoor freedoms than urban ones, they are more at-risk overall.
Overall, in a given year about one out of three pets will face a situation requiring non-routine care – but the percentage will be higher for the indicated categories of animals.
A decent insurance policy that:
- covers both accidents and illnesses
- offers acceptable levels of maximum annual benefits ($8,000-12,000 / year) and percentage-of-cost coverage on individual claims (75-85%)
- avoids onerous exclusions, high co-payments or up-front “excess” payments, sharp rises in premiums after the making of claims, and other tricky value reducers
– might run about $7-10 per week.
For many middle-class families, this will be an acceptable level of cost – although it is worth remembering that a fairly large percentage of pet owners have several dogs and cats, and that will change the equation for them. (Most insurers do offer multiple-pet discounts.)
Be sure to compare pet insurance policies before you buy!
Among pet owners who have looked at purchasing insurance but rejected it, the commonest complaint after cost is “Too many exclusions”. It is indeed an issue.
All policies will exclude pre-existing conditions, which is one reason to purchase insurance for a new puppy or kitten immediately, maybe even before the first visit to the veterinarian.
But watch out for other types of exclusions. An exclusion for a genetic pre-disposition to certain ailments could greatly reduce the value of a policy for the owner of a purebred dog. Bulldogs, for example, are known to present a host of possible hereditary health issues, and if an insurer won’t pay out on any of those, the bulldog owner might not see much value out of paying her premiums.
An exclusion for bilateral conditions – for example, paying out for hip dysplasia, but only for the first hip affected – obviously would reduce the value of a policy as well.
Honestly, read the whole thing. Many policies will go into detail about the coverage for specific situations such as insect bites, and you will want to know all of that.
Many insurers do not offer new policies for animals past a certain age. But if you purchased the policy when the animal was still young, you should be guaranteed lifelong coverage as long as you maintain your payments, and the payments should not go up drastically nor the coverages go down markedly when the pet becomes geriatric. That is naturally when you will make the most use of the insurance, so be aware what the policy says about it.
Another issue to be aware of goes to a basic understanding of how pet insurance claims and payments work. It would be a mistake to assume that the process is the same as that of human health insurance.
With many pet insurance policies, you pay the veterinarian or animal hospital up-front, submit the claim, and then receive a reimbursement payment from the insurer. The insurer does not pay the vet directly.
It is no surprise that many people do not like this feature, and some reject the purchase of pet insurance on that basis. The thinking goes, “If I have $4,000 sitting around to pay the vet, what do I need the insurance for?”
Well, of course it is always still good to get a reimbursement. But the objection is a serious and understandable one. A key reason for purchasing any insurance is the worry that you will not be able to cover a troublesome situation out-of-pocket. If pet insurance doesn’t lessen that worry, many people figure, why bother with it?
The insurers are alive to this objection, and some are offering new products that work more like human health insurance; others will do so eventually. But this welcome development requires that the veterinarians themselves get on board.
Some have, and some haven’t. So am important part of your consideration of whether to purchase pet insurance and which insurance policy to buy is to consult with your veterinarian to find out what experience she has with insurance, and whether she accepts direct reimbursement and from which companies.
Although it would be nice if this whole purchase process could be streamlined and simplified, the fact remains that for the foreseeable future, there will be a need for pet owners to explore their various options, look for policy pitfalls, and do rudimentary cost/benefit analyses.
But for most of us who really love our animal companions, one look into the eyes of our dog or cat will be enough to convince us that this small amount of trouble is worth taking!