Pet Health Insurance 101

I realize some folks reading this column may feel buying a pet health insurance policy is a luxury, and possibly even a joke. In these recessionary times of cutbacks, downsizing and personal sacrifices, it may even appear wasteful. But just like human health insurance or life insurance, pet health insurance is supposed to be there for those (hopefully) rare situations that are serious enough to cause one to angst over care vs. cost.

In hard times, would you drop your own or your dependent's healthcare coverage? Would you cancel your life insurance policy? Hopefully not.  

I personally have had a pet health insurance policy for Flip since he was a 1-year-old (he's now 10 years old). Back then it was a very new thing, had that "experimental" feel to it, and there were very few companies out there offering decent plans. As soon as I adopted Tiki (she was 2 years old), I added a plan for her as well (the policy premium was reduced a little due to a multi-plan discount). I've used VPI Pet Insurance, one of the first and largest, since day one. Back then, I believed it was the best plan out there. I'm not 100% sure that still holds true today, but I'm somewhat afraid to switch companies at this point due to exclusions like pre-existing conditions, etc. Other well known pet insurance plans include: Pet Assure, ASPCA Pet Insurance, Trupanion, and Hartville.

I pay the premiums for both plans on a monthly basis by auto-pay from my checking account. This is convenient and ensures I don't accidently let coverage lapse. I pay the vet bills up front, then submit the pre-printed forms provided to me by the insurer for reimbursement. The forms require the vet sign off. Back then, I submitted each claim myself. Today, my vet submits my claim form for me and it seems to get processed by the insurance company more quickly. I think the fact vets are now willing to handle their customers'  insurance claims is testimony to the growing popularity, need and demand for, pet health insurance.

Originally when I bought Flip's policy (he was very young), I paid for the "Wellness Rider," which back then was only $99 per year. The Wellness Rider essentially gave me a partial rebate on his routine care items such as vaccinations, flea and tick Rx, yearly check-ups, etc. After awhile, I figured it made more sense to keep the $99 and just put that money toward his routine care. A few years later, as Flip got older, I've added a Cancer Rider. Cancer and other serious, debilitating diseases, are the big ticket items you typically want to have some financial protection against. Also, dramatic injuries like being hit by a car, or attacked by another dog or wild animal. These types of health concerns can quickly add up and wipe out your bank account. A pet parent should never be in a position where they have to choose between caring for their beloved pet, possibly saving its life, or having to say goodbye simply because the cost is too high. That is the real tragedy, but it happens all the time.

However, pet health insurance may not be for everyone. If you are good at saving and budgeting, you can skip paying premiums to an outside party, and put that money in your own savings account to use towards potential medical emergencies.  But let's be honest, most of us are not known for being budget-conscious savers. So here are some considerations for whether pet healthcare is right for you:

• An Associated Press survey showed the majority of pet owners would draw the line at $500 vet care. With actual healthcare costs creeping up toward $1000, fewer pet owners are willing to pay.
• Pet insurance is growing in popularity, however it is still not widely purchased by pet owners; only around 3% of dogs and 1% of cats are insured according to industry estimates.
• Pet insurance coverage can be complicated, so you really need to read the fine print and understand what your policy includes and excludes, level of benefits, policy limits, what are considered reasonable costs for your geographic area, hidden fees, etc. Keep in mind it is similar to human health insurance in that the insurance companies are in it to make a profit, not payout large benefits.
• A Consumer Reports study found that overall the nine pet policies they analyzed were not worth the cost for a typical healthy pet, when spread over a 10 year lifespan of paying premiums.
• There are many more pet health insurance carriers now to choose from, so review their coverage, and compare companies and policies to find one that suits your needs and budget best.
• Consider setting up your own emergency savings fund to offset the cost of unexpected, high vet bills.