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What factors should I consider when deciding whether to purchase pet insurance?

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Read the coverages carefully. When I investigated pet insurance several years ago, I found that it was only useful for catastrophic costs; the premiums were about equal to the cost of the annual exam (or vet check) and shots, and provided minimal discount there. At that point, you're playing the odds: if your pet develops cancer, you'll be glad to have the insurance, but if it develops something that requires medication, but not surgery, it may not help much.

Additionally, there is often an age threshold: for the policies I was looking at, my ten-year-old cats were too old.

The best way to evaluate the cost is to compare the premiums and coverage amounts with your past and current data, if you have it, or failing that, with estimates from your vet.

  • Thanks, Monica. Some good basic advice on what to look for and applicable no matter where and what you insure. I'd also add that, personally, while I have no health insurance, I do have insurance for my dog. The local government won't let me die by the side of the road in case of an accident and will pay everything above a certain manageable excess, while for my dog, any condition above a few hundred bucks would mean I'd have to put him down without insurance. – ThomasH Oct 8 '13 at 23:48
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I'll relate my experience (United States) so you can refer to it; it might not be a definitive answer, but it could help you decide. In 2002-3, I purchased Veterinary Pet Insurance (VPI) for my first two dogs, with the Standard plans. This covered bare minimum expenses, and since one of my dogs had an ear infection early in life (due to his prior owner not cleaning his ears properly), any future ear issues with him were excluded.

I felt that I only received back enough money to almost cover the money I outlaid annually. One dog developed Cushing's Disease and required expensive monthly medication. The plan had a maximum annual cap on his monthly medication and annual treatment reimbursement; I did not have the money to cover the expenses at the time, so the idea of having insurance to cover canine medical expenses was important, but the fact that the insurance discounts were so limited, in retrospect, purchasing the insurance was not worth the expense.

When one of my dogs died, while the insurance company did pro-rate the account, his end of life expenses were not covered to my satisfaction. I am still keeping my other dog covered, but my third, new, dog is not covered.

Considering the additional time expense of personal busy work required for filling out forms, maintaining the account, and submitting forms and receipts, I feel I am better off setting aside a monthly "in case of emergency" expense account for new dog.

Within the last year or two, the VCA-branded hospitals have embraced VPI and are a bit more collaborative with them, so if you go to a VCA hospital and purchase a different plan than I had, and cover an animal with fewer pre-existing conditions, the insurance might work better in your favor.

Your mileage may vary.

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I purchased insurance for my cats from VPI. The thing to understand with insurance is that on average, you will lose money on the deal. I worked in insurance for the first 6 years of my software development career at both a carrier and an agent. Pet insurance isn't particularly organized, so you won't generally get discounts at the vet like you do with medical insurance. It is simply risk mitigation insurance.

If you saved money over the life of your pet equivalent to what you would pay for insurance, it should average out over time to being less than your insurance premiums. Ok, so if it is such a bad deal, why did I get it?

Two reasons, first, there is no guarantee that my pet will only have medical issues later in life. One of my pets has had medical issues with his eye and the coverage has helped with paying for that and has covered more than we paid for that cat (though not more than we've paid for both).

The second, bigger reason is one of having to place a value on my pet's life. Say I save my money in a fund to take care of my pet. My cat gets to be 18 years old, is getting near the end of his life and needs a $2000 procedure. If I've been saving all that time, I have a pile of cash that I have to spend a bunch to take care of him for what may not be much more time. I have other expenses and am in a hard spot of choosing if I really want to use that savings on my pet.

If, instead, I've been paying for insurance all along, I don't have any great amount of money I'm outlaying at 19 years old, but rather have been paying for having whatever issues come up all along. It is easy to decide to do the procedure because I don't have anything to lose.

The pet insurance makes it so that I don't have to worry about the unlikely event of major medical expenses now and means that I don't have to worry about hard decisions about spending for major medical expenses later in life. It lets me focus on doing what is best for my pet without having to worry about unpredictable costs and I give the insurance company some extra on the top for taking care of assuming that risk for me.

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I am looking at pet insurance my for newly adopted adult dog, and am finding that the maximum annual coverage really doesn't make sense for me. For example, most insurers start with a $5,000 annual coverage limit, and have options for as much as unlimited annual coverage for a few dollars more.

While this sounds great, if my dog were to have some huge expense costing tens of thousands of dollars, all of the policies I have come across state that they only reimburse policy holders; so in order to benefit from having insurance, one would have to first completely pay the vet bill. While this would be doable up to some amount, it obviously becomes impractical for most people at some point before "unlimited" occurs.

It seems like it's possible to be insured while unable to pay the vet costs upfront, and thus ineligible for reimbursement.

The pet insurance model is very different from the health insurance model. I think this is worth considering.

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