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Updated on Monday, September 18, 2017
More pet owners are buying insurance to cover the cost of accidents, illness and routine checkups, but that hasn’t made it any easier to decide if it’s really worth the extra expense or not.
Still, that represents a mere fraction of the estimated 400 million pets living in U.S. households today.
One factor holding pet owners back from investing in an insurance plan for their pet could be cost. Annual premiums for coverage can range from $163 (accident-only coverage) to $496 per pet (for a plan that covers both accidents and illnesses), according to the NAPHIA. Those costs can become much higher depending on the age of your pet, type of animal and where you live.
It’s also common for pet insurance plans to come with deductibles, so pet owners could easily still face hefty medical bills even with insurance.
With the increase in how much Americans spend on their pets — from $60.28 billion in 2015 to $66.75 billion in 2016 to an expected $69.36 billion in 2017 — as well as insurers offering coverage, it’s important to determine if insurance is a smart financial option for your furry friends.
What Pet Insurance Covers — and What It Doesn’t
Depending on the insurer and how much you’re willing to pay, you can get several different tiers of coverage for a pet.
The most basic plans offer one or the other: wellness visits or accident-only coverage (similar to a catastrophic health care plan for us humans). At a more comprehensive level, plans can cover illnesses and wellness visits as well as routine checkups. Prices also vary based on what type of pet you have.
For example, Nationwide offers a comprehensive dog insurance plan that covers wellness exams and visits, accidents, hereditary conditions, chronic conditions, and pay back up to 90 percent on some veterinary bills. The price starts at $65 per month or $780 per year. You can pay less and get less coverage.
Their so-called “major medical plan” covers accidents and illnesses but doesn’t offer coverage for wellness exams. The plan starts at $35 per month.
And at the bottom rung of coverage is a wellness plan starting at $18 per month and offering basic coverage for things like flea and heartworm prevention and vaccinations.
It make take time, but it’s important to comparison shop between different pet insurers before you decide on a plan. Sites like petinsurancequotes.com offer ways to compare insurers and plans.
What pet insurance doesn’t cover
While pet insurance can cover many emergencies, the type of plan you purchase will determine if the insurance pays for medical care beyond accidents. Wellness visits and vaccines are not covered by Trupanion, for example, which insures only cats and dogs. Grooming and nail trimming are not included in Nationwide’s wellness package.
While it’s now law that insurers can’t deny humans insurance based on pre-existing conditions, the same perk isn’t enjoyed by pets. Pet insurers such as Trupanion and Nationwide do not cover pre-existing conditions that the pet had before coverage began. Nationwide limits coverage for hereditary disorders by breed — such as cardiac arrhythmia in Boxers — in some plans, but offers full coverage for those conditions in its comprehensive Whole Pet with Wellness plan.
For this reason, the best time to purchase pet insurance is when the pet is young because there is little chance of pre-existing conditions. The average age of insured cats and dogs was 4.86 years in 2016, according to NAPHIA.
When Pet Insurance Makes Sense
In 2016, Americans spent $66.75 billion on pets, according to data from the American Pet Products Association. Of that, Americans spent $14.71 billion on pet supplies and over-the-counter medicine and $15.95 billion on vet care alone.
“Now people are demanding more for their pets,” says Dr. Simon Platt, a veterinary neurologist and professor at the University of Georgia College of Veterinary Medicine.
Insurance appeals to pet owners who prefer to pay a monthly cost for future health expenses instead of doling out hundreds, or even thousands, of dollars when care is needed.
When Destin Miller’s mixed border collie, Ozil, had gastric problems, her pet insurance from Trupanion covered $320 of the $350 bill for medication, fluids, blood work, and 24 cans of special dog food. The $30 that Trupanion did not cover were the dog’s two exams.
“They were all approved … extremely quickly,” says Miller, 23, a graduate student at the University of Georgia in Athens, Ga.
Miller says it is easier for her and her fiancé to pay about $80 per month in pet insurance because she knows it could help cover greater expenses when her dogs are sick.
“It’s a nice safety net,” she says.
In 2016, the average claim amount paid for accident and illness plans was $263 in the United States, according to the NAPHIA 2017 report.
When deciding whether or not to purchase pet insurance for your animal, there are several factors to consider other than cost:
- Breed:Know the risks and medical conditions associated with your breed, such as if your dog is likely to have diabetes, to determine if it will be covered or if the level of coverage will be enough for your pet’s care now or in the future. Also, if you have a purebred or pedigree dog or cat, it may have inherited medical conditions that could be considered high risk and too expensive to treat.
- Age: Typically, your pet needs to be at least eight weeks old to be covered, according to NAPHIA. But you also don’t want to wait too long to get coverage because your pet may be too old for a company to insure because of the potential for high costs of care with age.
- Waiting period: For most policies, you will need to wait 10 to 30 days for the insurance to kick in, according to NAPHIA.
- Number of pets: Some insurers may limit the number of pets you can insure, particularly if they are considered “high risk,” according to the American Veterinary Medical Association (AVMA). But others may give you a discount if you are insuring more than one pet.
How much should I pay for pet insurance?
Insurance companies provide a variety of plans. Pet insurance can vary due to different factors such as species, geographic location, age and gender.
Don’t simply purchase the plan with the cheapest premium. Look at the deductible as well, because that’s how much you’ll have to pay out of pocket before your insurance kicks in. You should also consider how much you are paying for your pet’s care today and how much care you anticipate your pet will need in the future. Paying for a more expensive plan may be worth the money if you make several visits to the vet each year.
Trupanion allows its customers to choose their own deductible from $0 to $1,000, which allows pet owners to choose a premium that works with their budget, says Emily Coté, director of customer marketing for Trupanion, a Seattle-based pet insurer.
For example, Nationwide offers these examples: Coverage for a small mixed-breed puppy, under the age of one and located in San Diego, Calif., could cost $17.75 a month for a Wellness Basic plan from Nationwide or $49.94 per month with Nationwide’s Whole Pet with Wellness plan. Nationwide, after an annual $250 deductible, will pay up to 90 percent of all accidents.
For a kitten under the age of one, the Wellness Basic plan would cost $12 a month, and Nationwide’s Whole Pet with Wellness plan would be $35.25.
“People want that peace of mind,” Coté says. “It’s easier to budget that monthly amount and not have to make medical decisions due to finances.”
Where to shop for pet insurance
While pet insurance has been in the United States for about 35 years, the awareness and interest is much smaller than their European — most specifically British — counterparts, say insurers and veterinarians.
Platt says when he worked in the United Kingdom, he would fill out three to four insurance claim forms a day. Platt says he has filled out only three to four claims while living and working in the United States the past 11 years.
“I now see some major household insurance names offering it,” he says.
Shop around and compare rates. More than a dozen companies offer pet insurance, with some under brands and entities with names like Pet Protect and Nuzzle, based on a list of NAPHIA members and a list of companies compiled by the AVMA. Providers include major home, auto and life insurers, such as Nationwide and Geico, while some companies, such as Trupanion, PetFirst, and Healthy Paws, specialize in insuring animals. It’s important to get quotes from insurers and compare coverage yourself to make sure you’re getting the best rate.
Free trials from pet shelters. Pet shelters also sign up owners for insurance, typically by offering a free trial for the first 30 days. However, after the trial, you could be charged unless you cancel the policy. Discount membership clubs, such as Sam’s Club with PetFirst Pet Insurance, also offer pet insurance.