Understanding Pet Insurance & Why I Won't Go Without It

 

If you've been following along with Boca's recent Ocular Ordeal, you know that pet insurance saved our butts on treatments and surgery totaling several thousand dollars. While the process wasn't perfect (my claim was initially denied), it did confirm that buying pet insurance for The Ginger Sisters was the right choice for me, and I won't go without it for my dogs. Pet insurance can be overwhelming and confusing, and there are many considerations to explore before purchasing a policy.

Having worked in the insurance industry for fifteen years now, I am comfortable navigating the fine print of coverages, exclusions and claims, something I know can be intimidating. This is by no means a comprehensive analysis, and although Ruby and Boca are both insured, I won't be specifically promoting or linking to those companies here. I use two different companies and my dogs have two very different policies - something that is nice about pet insurance is that it is very customizable. You can find coverages to fit almost any budget.

I have had claims with each of the companies I use; a small suspected obstruction claim for Ruby (which thankfully turned out to be nothing) and a major claim for Boca's conjunctival graft surgery and associated treatments. Both were handled quickly and I had reimbursements in hand or directly paid to my vet within two weeks of submitting the claims. Something that is extremely important to remember is that pet insurance in the U.S. handles claims on a reimbursement basis, which means that they reimburse you after you pay the vet charges for accident or illness. Some companies will pay the vet directly if this is pre-arranged and agreed upon by all parties.

I want to emphasize that every policy is different. Pet insurance is not required by law and so there is little standardization. Every company provides varying coverage options. I've been happy with both companies I use for different reasons - they each have strengths and weaknesses and I like having the real-life comparison. When shopping for pet insurance, here are some of the most important things to look for:

Limits: This is the amount the policy will pay per year or over the lifetime of the pet. There are some companies that have an unlimited lifetime benefit, and others that offer as low as $1,500 per year. Unlimited policies are going to be more expensive, and lower limits will be more budget-friendly.  Some policies have both annual and lifetime caps.

Deductible: This is the flat-fee amount you will pay out of pocket when you have a claim. Some companies offer an annual deductible and others are per-claim. For example, if you have a $500 annual deductible and submit a $1,000 claim, you would be reimbursed $500 (less your co-insurance and any exclusions or adjustments) but any claim after that within the policy year would not be subject to a deductible. If you have a $100 per-claim deductible, that would be subtracted from each claim. Your deductible choice is reflected in the premium - lower deductibles cost more.

If you want something for catastrophic events, such as a long term illness or emergency surgery, but are comfortable paying smaller bills out of pocket, a mid-range limit, high-deductible plan is a good choice. This is what I have for Boca. For Ruby, who needs more bubble wrap due to her flight-risk, high energy and propensity for eating things like gravel and plush toys, I have an unlimited plan with a low-deductible. Ruby's monthly plan costs more than twice what Boca's does, and my own risk management somewhat backfired when Boca was the one who ended up needing expensive treatment. Choosing insurance can feel a bit like gambling. 

Co-pay or Co-insurance: This is a percentage of a claim that you are responsible for. Most companies offer 70%, 80% and 90% reimbursement rates with a few offering 100%. Going back to that $1,000 claim with a $500 deductible, if you also had an 80% reimbursement rate, you would receive back $400 after your deductible and co-pay were applied (and yet another way in which companies differ is the order in which deductible and co-pay are applied to the claim.) Once again, the lower your co-insurance, the higher your premium will be.

Premiums: This is the bottom line - the amount you will pay for the coverage on a monthly or annual basis. I think many people assume that insurance is too expensive; however, in researching eight of the primary companies I found that premiums can range from as low as $10 a month to as much as $100 a month. I pay $16 a month for Boca's coverage, and if we only ever have the eye claim it will have more than paid for itself in her lifetime. It's one of those things you hope you never need, and if you pay for it year after year without a claim it can be tempting to let it slide. I might be a little superstitious in feeling like that one day I let the coverage lapse is the day something will go wrong. It is well worth it to me to include this monthly cost in my pet budget.

Below is a comparison of the major companies that I put together. The premium range is for a young, medium-sized mixed-breed dog: age, breed and size will affect pricing. I apologize for the tinyness/blurriness and any missing information - this was all gathered from websites. I am happy to email the PDF by request.

Exclusions: This is a big one, and one of the most crucial things to understand before purchasing a policy. While every company has different exclusions, pre-existing conditions are excluded across the board. I find that this is often misunderstood and one of the biggest reasons for dissatisfaction with pet insurance. Many people don't think about insurance until something is wrong, and of course by that time it is too late to get coverage. Even if the pet hasn't exhibited symptoms, but had something related to or indicative of the problem previously noted by a veterinarian, it most likely would not be covered because the pet insurance companies will request all vet records when there is a claim.

Even if your pet does have a pre-existing condition, that isn't always a reason to skip insurance altogether. A pet with hip dysplasia could still have a costly gastro-intestinal illness and a pet with allergies could still tear an ACL and require an expensive surgery. Some companies do not cover genetic conditions, alternative treatments, or behavioral therapy. Routine care and dental care are not generally covered under the standard policy, but many companies offer a separate wellness plan.

Other Considerations: Although it can be tedious to pore over policy wording, it is absolutely essential that you understand what you are buying. In looking over reviews on petinsurancereview.com, I found that negative reviews were very often due to a lack of understanding of their policies or insurance in general. A few things to pay special attention to are whether or not the policy covers exam fees (many don't), dental treatment (most don't), whether the reimbursement rate is the same for specialist and emergency treatment, whether medications are covered (some are automatically, others are an add-on coverage) and what the waiting periods are for accidents and illness (most are between 15 and 30 days, many have longer exclusions for hip dysplasia and other orthopedic conditions). It is also important to note that in most cases, once you have a claim, you cannot lower your deductible and co-insurance or increase your limits.

Something that I hear over and over when weighing the pros and cons of pet insurance is the savings account argument. This suggests that it is better to put the money you would pay toward insurance premiums into a savings account instead. If I had saved the money from both dogs' premiums from the time I adopted Boca, I would have had around $500 at the time of Boca's eye issue, and been short more than $2,500 for her surgery. This plan would not work for me, and unless you are able to set aside several thousand dollars right off the bat, you will not be prepared for a serious illness or major surgery. Since pet insurance usually requires vet bills be paid in advance, it's a good idea to have some savings in addition to pet insurance if at all possible. I do think that a savings account is a fair alternative to pet wellness plans, since those are essentially a savings plan with a discount for routine care (vaccinations, elective surgeries, dental work).

I believe that pet insurance is an essential part of pet guardianship, even if that means you are self-insuring with an adequate savings account or line of credit. Personally, I won't ever go without it. Even the healthiest of pets can have an accident or a sudden illness and vet bills can amass into the thousands of dollars very quickly. Veterinary emergencies and medical decisions are so much less stressful for me knowing that The Ginger Sisters have insurance coverage, although bubble wrap is still a good idea...

What about you - did you make it this far through all that "boring" insurance talk? Have you considered pet insurance?