Pet Insurance: Cure for Increasing Costs?

The New Phenomenon of Pet Insurance

Pet insurance is a recent phenomenon that is becoming increasingly common. It wasn’t until 1947 that the first pet insurance policy was sold in Britain. Today, interest in pet insurance policies has been steadily increasing, with Sweden leading the world in numbers of insured pets (23%) and the United States insuring an estimated .65% of pets (according to Embrace Pet Insurance; some estimates are higher). These numbers are on the rise. According to the American Animal Hospital Association, three-fourths of American pet guardians would go into debt to secure the medical services needed for their pet. Improvements in veterinary medical technology, increased veterinary specialization, and changes in cultural standards of care for companion animals combine to result in higher costs of veterinary care and willingness to pay those costs. All of which makes insurance an attractive option for many pet guardians.

Not for Everyone?

While increasing in popularity, pet insurance still may not be right for everyone. Some people prefer to keep a sort of pet “health savings account,” or an amount set aside that is dedicated to their pet’s medical costs. This is a good idea, and works well for many, but has the potential to fall short in the event of a catastrophic injury or illness. For those concerned with the “what if” catastrophic scenario, insurance can be a benefit to a pet guardian’s peace of mind, as well as an advantage should it become necessary to use it. It’s also important to consider the reimbursement model of  companies providing insurance for pets. Currently, pet insurance is regarded as a type of property insurance. This means that you typically will pay your veterinarian, file a claim, and later receive reimbursement of eligible expenses (minus deductible and co-payment up to the limits of the policy). For this reason, you must have sufficient funds available to cover all the expenses of your pet’s medical care out of pocket while you wait for reimbursement. Pet insurance might not be a realistic option if this isn’t the case for you.

What You Need to Know

If you’re considering pet insurance, you’ll have several questions to ask prospective insurers about both coverage and reimbursement when deciding on the right provider and/or policy.

Coverage:

  • Are congenital and hereditary conditions (such as hip dysplasia or heart defects) covered?
  • What types of pets are covered (Dogs? Cats? Exotics?)?
  • What about wellness services, optional procedures (such as spaying and neutering), and tests (such as x-rays and lab tests)?
  • Are there annual contracts with pre-existing condition exclusions for conditions diagnosed in the previous year (so-called “non-lifetime” coverage) or past years?

Reimbursement:

  • Is the calculation based on the actual vet bill, a benefit schedule or “usual and customary” rates?
  • Is the deductible annual or per-incident?
  • Are there any limits or caps applied per incident, per year or over your pet’s lifetime?

Resources

Some of the best-known and respected providers of health insurance for pets are Healthy Paws, Trupanion, Nationwide, Embrace, PetPlan, and ASPCA (in no particular order). Nationwide notably insures exotic pets, while many of the others do not. To help with your research before purchasing pet insurance, PugetPets suggests referring to resources such as Pet Insurance Review, Consumers Advocate, and Pet Insurance Quotes for comparisons and reviews of companies.

Seattle Times pet blogger Neena Pellegrini has published a four-part tale of her own insurance-shopping odyssey in which she offers pet guardians lots of good advice based on her experience:

Part 1 – The Hunt for Pet Insurance Begins

Part 2 – Shopping for Pet Insurance: A Vet’s View

Part 3 – The Fine Print in Pet Insurance Shopping

Part 4 – Shopping for Pet Insurance, the Hunt Ends

Consumer Reports has also written about the pros, cons, and considerations of insuring your pet’s health. You can read that article here.

Pet insurance can be a true lifesaver when it comes to being able to provide the highest level of medical care for your furry family members. Asking the right questions and doing a bit of careful research will ensure that you find a policy that is right for you and that you get the most for your premium payments.