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Should You Buy Pet Insurance?

Veterinary care is getting better and costing more — but price isn’t your only consideration.

April 2012

It’s a pet owner’s nightmare: A beloved animal — a true member of the family — incurs a serious illness or suffers a major injury.

While many owners will pay whatever it costs to treat a pet, they often are surprised at the bill. That’s because veterinary science has improved dramatically, and many practices now offer their patients medical treatments and technologies once limited to humans. Prices could make you yelp. Consider:

Chemotherapy, radiation therapy, heart surgery and kidney transplants now are available to pets, meaning that once-fatal conditions are now treatable at costs ranging from $2,000 to $10,000 or more.

Veterinarians now have more sophisticated and costly diagnostic tools, like MRIs, that not only boost the cost of exams but also detect problems that previously would have gone undetected and untreated. Of the estimated $51 billion Americans currently spend on their pets, about $14 billion — or 27% — is spent on veterinary care, says the American Pet Products Association. Despite this, few pet owners have insurance, according to the American Veterinary Medical Association.

Veterinarians often provide pet insurance literature to their clients because many insurers don’t have sales staff to deal directly with the public, but the veterinarians don’t earn a profit from this, explains Neal B. Neuman, VMD, owner of Montgomery Village Animal Hospital in Gaithersburg, Md.

“We tell all new clients about the availability of pet insurance, yet only about 1% of our clients actually have it,” he says. “I personally tell people to set up a savings fund for their pet if they do not want to buy pet insurance. That way they can be self-insured.”

Insurance, which can cost $2,000 to $6,000 over the life of the average pet, can be helpful, but beware the caveats:

• Pet policies usually have deductibles, co-pays and caps limiting the amount they’ll pay annually.
• Some cover routine services, but others cover only treatments for diagnosed illnesses or injuries.
• Pre-existing problems and hereditary conditions, like hip dysplasia in German Shepherds, are normally excluded, although at least one insurer, Embrace Pet Insurance, covers hereditary and chronic conditions.
• The older your animal, the more costly the premium. Some insurers won’t cover pets older than 9; others impose heavy surcharges.

The best use of pet insurance, like many other forms of insurance, is for catastrophic expenses, not those you could easily pay out of pocket.

Before you buy pet insurance, take these steps:

Shop around. Policy provisions and premiums vary. Consider cost as well as the differences in deductibles, co-pays and caps. Ask about discounts for multiple pets. Find out if your employer offers pet insurance as a benefit; some 1,600 companies do, according to Veterinary Pet Insurance, the nation’s oldest pet insurer.

Be careful of scams. Just like human health and life insurers, pet insurers should be registered with your state.

Understand policy exclusions. Unfortunately, conditions most likely to affect your breed of pet often are the ones most carriers are likely to exclude.

The AVMA doesn’t endorse or recommend insurance providers but does provide guidelines on pet health insurance at avma.org.

The American Animal Hospital Association suggests that all pet-owning families assess their financial situation and consider their ability to meet unexpected veterinary expenses through savings, loans or pet insurance. The group doesn’t endorse carriers but does offer guidance online at www.healthypet.com.

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