Is Pet Insurance Worth the Cost?
Bringing a new pet into your family is a joyous occasion – but along with the cuddles and playtime comes the responsibility of their well-being. Considering the cost of veterinary care, many pet owners find themselves weighing the pros and cons of pet insurance. The question of whether pet insurance is worth the investment often depends on a complex equation of your pet’s breed, your financial situation, and your risk tolerance.
Alexis Pena, who adopted her Great Dane Zander, knew that her large breed dog would likely require an accident and illness policy. Drawing on her experience as a vet tech, she knew about the breed’s health concerns. She took out a policy shortly after bringing Zander home and says she has spent “thousands of dollars on … multiple long-term diseases on top of the heart disease.” Last year, she submitted 11 claims to her insurance company.
“Things are just getting more expensive,” says Pena. “It’s tough, and people in general don’t have a ton of flexible income.”
The Rising Costs of Pet Care
Veterinary care is becoming increasingly advanced, which means costs are rising. Pet owners constantly face the dilemma of choosing between their own budget or paying out for a premium insurance plan that may or may not cover all their needs.
Brian Vines, an editor at Consumer Reports, points out the similarities to human health insurance. “Insurance is the only thing you pay for that you pray you never use,” he says, and notes that an analysis by Consumer Reports found moderate returns for policyholders.
How Pet Insurance Works
So, how does pet insurance function? Here’s what to keep in mind as you shop around:
*Does pet insurance work like health insurance for people?
Yes. Accident and illness policies for pets typically cover chronic health conditions such as diabetes and heart disease, as well as sudden injuries. Pet insurance policies also have deductibles and co-pays, which can be up to $1,000 or more, according to Consumer Reports.
The key difference is in the regulations. Unlike human health insurance, state insurance regulatory bodies generally do not dictate what a pet policy must cover nor what companies must disclose.
However, this is changing in some states, with policymakers enacting more protections for consumers. For example, Maine passed a state law based on guidelines from the National Association of Insurance Commissioners (NAIC) to standardize consumer protections around policy renewals, coverage start dates, and wellness program language. States can choose to adopt NAIC’s model act or craft similar measures.
Another crucial distinction, especially tough on pet owners with limited financial resources, is that plans typically require you to pay for the service upfront, and then receive reimbursement.
Why is Pet Insurance Gaining Popularity?
Across the U.S., more Americans than ever are welcoming pets into their homes, and spending more time with them. A 2022 Post analysis showed that time spent with pets has roughly doubled in the last two decades, based on data from the Bureau of Labor Statistics.
Increased pet ownership also means increased spending on pet care. Overall spending on pets increased for decades before soaring to record highs in the wake of the pandemic. As technology advances, vet care costs climb with it.
Pet insurance companies are also getting an unlikely ally: employers. As a recruitment tool, companies are adding pet insurance as a voluntary benefit, according to Robyn Hopper, a knowledge advisor at the human resources association SHRM. Employers typically don’t pay for the benefit, but they may be able to provide a discount, similar to employer-provided cellphone plans or gym memberships.
Is Pet Insurance a Good Investment for You?
Pet owners have many forums for expressing their opinions about their policies. Those critical note denied claims, high premiums, and limited coverage, as well as arbitrary methods for determining when preexisting conditions are present.
It’s important to do your research, as Sarah Holzmann, who adopted Jet, a Chiweenie, in 2020, explains. She notes that you need to “heavily research what is and isn’t covered.” As Frances Wilkerson, a veterinarian turned consumer advocate, puts it, shopping for pet insurance isn’t as simple as it is for car insurance.
Pet owners need to understand how each company is different regarding waiting periods, exclusions, reimbursement rates, and coverage limits, to name a few. It’s especially important, she notes, to understand how the policy covers a preexisting condition – whether it’s an official diagnosis or not.
In addition, consumers should remember that wellness packages or preventive care packages – plans that cover routine vaccinations and spay/neuter services – are not insurance plans, but add-ons.
How to Shop for Pet Insurance
Can you save on pet insurance by shopping around? Yes! While any benefit offered through your employer is a good starting place, you should still check out other companies. Premiums are based on breed, age, and where you live. It’s ideal to take out a policy when the animal is young or newly acquired, without a large documented medical record. That way, there’s a lower risk of preexisting conditions.
Some experts suggest reading an insurer’s sample policy on its website to gain understanding of what is covered and what is not, and to opt for both accident and illness coverage. From there, you can ask your vet to explain medical terms you’re unclear about, as well as breed-specific medical issues that need to be covered under any policy.
If you have questions about insurance terms, turn to your state insurance regulators. Finally, you should get clarity on how reimbursement works, which ranges from 80 to 100 percent, depending on how your plan is structured and paid out after you file a claim. To see whether other pet owners are happy with their plans, check out reviews on Reddit or the Better Business Bureau.
Don’t forget that you can negotiate fees with your vet.
“[Vets] are service providers; you are well within your rights to call multiple vets and ask, ‘How much is this?’” Vines says. “You are absolutely allowed to make a deal with them.”
