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Did you know that in the U.S, a pet emergency happens every two-and-a-half seconds? Or, that two out of every three pets experience a serious health issue during their lifetime? With those scary stats, it’s no wonder that pet insurance is on the rise.
From experience, my sister’s dog ran into the street shortly after she adopted him. Luckily, with insurance, she only had to pay the $500 deductible instead of the $5,000+ vet bill that otherwise would have been on her tab.
But is pet insurance worth it for your little Tigger or Bella? Let’s find out.
Pet insurance was initially created in 1890, primarily for livestock, but the first companion pet coverage policy in the United States wouldn’t be sold until 1982. Lassie, television’s most famous collie, was the lucky beneficiary. Since then, pet insurance has surged in popularity. By 2012, over one million pets were insured with annual premiums.
If you're going to buy dog insurance or cat insurance, consider a few things first. Even with affordable pet insurance, health care for your pet can be expensive. Keep in mind that pet insurance won’t cover everything. For instance, chronic and pre-existing conditions may not be covered. However, it can definitely mitigate the financial damage down the road.
Putting it another way: pet insurance means you'll never have to make the choice between your financial health and your pet's bodily health.
The insurance quote you receive may be higher (or lower) than you expect depending on a number of pricing factors, such as the type of pet and breed, where you live, your pet’s age, health, and level of coverage you select. In 2016, the average monthly cost of pet insurance was only $31, making pet insurance cheaper than the average annual cost of food, veterinary care, and grooming. Your unique quote will look at:
- Type of pet. There is a greater risk of injury and illness for dogs, making the average cost for insuring a dog more expensive than the average cost for insuring a cat. Insurance for purebred dogs is also slightly higher than mixed breeds because purebreds are more susceptive to hereditary conditions. In fact, genetic disorders such as cancer, heart disease, and hip dysplasia are the most prevalent and expensive health issues to treat.
- Cost of living index. While the average annual cost of pet insurance in the United States is $366, the cost of living index directly correlates to the cost for care depending on your area. For instance, veterinary surgery in Topeka, Kansas is half that of New York City. Pet insurance companies charge more for policies in upscale zip codes such as Los Angeles and New York because they pay claims based on the actual veterinary bills.
- Age and health. Older cats and dogs are more susceptible to injury and illness, making them more expensive to insure. You should enroll your pets when they’re younger (think puppy insurance) because the older they are, the more expensive the policy. As your pet ages, the average cost of pet insurance increases about 10 percent per year alongside the risk of illness and injury.
- Coverage levels. An extensive range of coverage levels exist, from comprehensive plans that include every type of emergency to accident-only policies. The more coverage you purchase, the more expensive the policy. Some pet insurance companies will let you add regular care coverage for an additional monthly charge.
Before choosing a policy, make sure to read through it thoroughly. In particular, look for exclusions. The most common exclusions are home visits, cancer, torn ligaments, and pre-existing conditions, such as diabetes or pregnancy. In terms of finding the best quote, a good place to start is a comparison website, to get quotes from multiple carriers.
One of the most convenient aspects of pet insurance plans is your flexibility in choosing the right deductible and reimbursement rate to best fit your budget. Deductibles range from $100 to $1,000, with most people choosing between $200-500; rates for reimbursement vary between 60 and 100 percent. Most pet owners opt for an 80 or 90 percent reimbursement rate to maximize the value of their plan.
That said, it’s always a good idea to confer with your veterinarian and fellow pet-owning friends for recommendations.
If you decide pet insurance isn’t right for you, you can still start an ‘emergency pet fund’ just in case. Start by setting aside funds monthly to cover routine as well as unexpected expenses. The nice thing about any insurance, of course, is not having to plan so hard for the unexpected.
Alissa Green is the Digital Marketing Manager at Alliant. She has 10+ years experience writing/blogging and has written for Jezebel, The Onion, MyFirstApartment.com, and MyFirstCondo.com amongst other sites. The best piece of financial advice she’s received was from her mother, who says one should never try to beat the market (thanks, mom!). In her spare time, you can find Alissa enjoying the local comedy scene, exploring different Chicago neighborhoods, supporting the Chicago Humanities Festival and reading up on FinTech.
