Should you get insurance for your pet?

Consumer protection, Insurance

As you’re handing over yet another huge wad of cash at the vet’s office, you can’t help but think there’s got to be a better way. Then you see the pamphlets at the front desk about pet insurance. “Yes!” you think. “The answer!” Pet insurance sounds like a great way to save money on pet expenses, but is it really all it’s cracked up to be?

Costly critters

Americans spent $15 billion on veterinary care in 2014 and $870 million of that was spent on pet insurance (yet only 3 percent of dogs and 1 percent of cats are covered by insurance). There’s no question both veterinary care and pet insurance are big industries. So how do you come out ahead financially?

While pet insurance might make you feel like you’re being proactive and smart, the only way to really know is to crunch the numbers. The problem of course is that there’s no way to accurately predict what’s going to happen in your pet’s future. Your pet may be healthy for many years with only minor problems, or might need several expensive surgeries along the way.

Consumer Reports says the average yearly cost for a dog is $225 per year, and $532 for an average one-time surgical visit. For cats, the yearly average is $203 and a surgical visit is $278. For a more personal assessment, you could ask your vet what they think a typical lifetime cost is for your type of animal. Also be sure to check with fellow pet owners for estimated costs—friends or even social media groups for your specific breed can help give you real-life examples.

Comparison shopping saves cents

Buying insurance when your pet is a puppy or a kitten is most likely to be the best deal since you’ll get the lowest premium rate (though you’ll also pay into the plan for more years). Rates depend on your pet’s type, breed, age, and pre-existing conditions, as the exact plan you choose and where you live. An average plan could run about $25 to $34 per month. That totals $300 to $400 a year.

While that might sound like the cost of one trip to the vet, and thus more than worth it, be aware the plan probably doesn’t cover everything, so it’s important to read the fine print. You’ll have to pay deductibles and co-pays as well as uncovered expenses. And be sure to determine if there is a yearly or lifetime max for payouts.

While you’re doing cost comparisons, realize that costs for veterinary care can vary widely from office to office, so it may be worth your time to make some calls to compare rates.

Insurance for peace of mind

Because it can be so hard to predict what kind of expenses Fido or Fluffy is going to rack up, the greatest benefit of pet insurance may just be peace of mind. You don’t have to bite your nails every time you walk in the door of the vet office, hoping the visit won’t clear out your vacation savings (or your rent).

Pet insurance can also be a way to avoid tough decisions. Buster needs a $5,000 hip replacement. You think of him as a family member, but that’s a lot of dough to spend on a dog. If you have the insurance, you don’t have to make that tough decision, since the surgery (or at least part of it) is probably covered.

It’s also true that if you set aside the costs of the premiums yourself in a separate account, it’s very likely you could come out ahead in the end (and any money left after all of your pet’s expenses is yours to keep).

The bottom line is: pet insurance is a gamble. But if it makes you feel better, it may be a worthwhile investment.

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