By Emily Guy Birken on 22 January 2020
Last fall, our greyhound Tivo refused his breakfast on a Friday
morning. He didn't eat or drink water all day, and we were worried. That night,
we took him to the 24-hour emergency veterinarian and Tivo was diagnosed with a
bacterial stomach bug and dehydration. We went home with antibiotics, a saline
IV, and a $200 vet bill.
Thankfully, we could afford this bill for unexpected emergency
care for Tivo. But if he were diagnosed with a chronic condition or needed a
very costly intervention, we might find ourselves facing some heartbreaking
financial decisions.
Pet insurance is often touted as a solution to these worries.
With pet insurance covering some costs of veterinary care, you're never forced
to choose between your beloved pet and your finances. However, does this kind
of coverage make sense for most pet-owners?
Here's what you need to know about pet insurance so you can keep
your fur babies bright-eyed and bushy-tailed for years to come.
Premium costs
As with human health insurance, pet insurance charges you a
monthly premium for your pet's coverage. According to Value Penguin, the
average monthly cost for canine pet insurance is $47.20, and the average for
feline insurance is $29.54 for accident and illness coverage.
Of course, this doesn't tell the whole story of what to expect
from premium costs. Many pet insurers increase premiums with the age of your
pet. Which means the $47 per month you pay to keep your 4-year-old pup healthy
could rise with his/her age, making the premiums harder to keep up with just as
they're more likely to need age-related medical intervention. In addition,
different breeds can have different premium prices, since there are some
hereditary conditions that various breeds may be more prone to.
However, even with these potential issues, there are some
methods to keep premiums manageable. For instance, some tried and true
insurance reduction strategies work just as well for your pet's health
insurance as they do for your own. These include increasing your deductible,
reducing the percentage that the insurance reimburses, or limiting the annual
payout rather than choosing unlimited coverage.
These strategies can keep your premiums affordable while still
helping with big veterinary bills. But you need to be prepared to pay anything
above and beyond the coverage limits you set up. (See also: 8 Ways to Lower Your Vet Bills)
Coverage
It's also important to note that pet insurance does not
necessarily cover every kind of health cost for your pets. To start, unlike
(some) human health insurance, most pet insurance will not cover preventive
care and annual exams. So you will need to plan for these costs on top of your
premiums.
Pet insurance policies generally come in two varieties: accident
and illness policies, and accident-only policies. In general, accident-only
policies do not raise their premiums as your pet ages, making this kind of
insurance more affordable long-term. However, accident-only policies tend to be
cheaper because your pet is less likely to get injured than fall ill. If you
decide to invest in pet insurance, getting both accident and illness protection
will likely offer you more protection.
That said, each insurer gets to decide which illnesses,
conditions, and services it covers, and not all ailments are covered. Many
insurers also do not cover the diagnostic exam for a particular illness, even
if the treatments are covered. Make sure you pay attention to the details of
what your potential insurer will cover before signing up for coverage.
As with many types of human health insurance, most pet insurance
policies exclude preexisting conditions. Unfortunately, some insurers consider
health problems to be "preexisting" if they crop up within a year of
the purchase of your policy. Insuring your pet when they're young is the best
way to avert the preexisting condition coverage gap.
Finally, pet insurance coverage is usually handled via reimbursement.
That means you'll be on the hook to pay the vet bill at the time of service,
and you'll submit your receipts to your insurer to receive reimbursement. (See
also: 7 Things You Need to Know About Pet
Insurance)
Should you buy pet insurance?
With all the caveats, coverage gaps, and reimbursement
requirements, pet insurance is not necessarily a slam dunk for everyone. In
fact, many consumer advocates recommend that pet owners put aside an amount
equal to the annual premium into a savings account each year. This will give
you the same peace of mind that you can cover any potential health care needs
for your pet while also allowing you to keep the money if you never need to use
it.
However, if you struggle with financial discipline, this
strategy will leave you in a difficult situation if your furry friend needs an
expensive procedure. Pet insurance can provide you with the protection your pet
needs even if you struggle with money.
Show your love with an emergency fund
Whether or not you decide to purchase pet insurance, remember
that you'll have to pay upfront for any veterinary procedures. With insurance,
you will get reimbursed for covered care, but you will still need to have
access to funds to pay for Mittens' kidney stone removal or Rex's arthritis
care at the time of care.
This means that one of the best ways you can protect your furry
friends and avoid heartbreaking financial choices is to have an emergency fund.
With or without pet insurance, set some money aside for the unexpected so you
can enjoy your four-legged family members for years to come.
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