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Pet Insurance – Is it Worth it?

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For many people, pets are an important part of their family. In fact, a whopping 85 million families in the United States have pets, based on a survey by the American Pet Products Association (APPA) in 2019-2020. That’s 67% of families in the US. In 2019, $75.38 billion was spent on pet care, and included expenses such as food, toys, and, of course, vet visits. With so many pets and so much money being spent on them, it’s no surprise that pet insurance is becoming more and more popular. Let’s take a closer look at this continuously growing industry.

How Does Pet Insurance Work?

According to Pawlicy Advisor, pet insurance is pretty similar to property insurance. First, you need to purchase coverage from an insurance company, and you’ll have a monthly payment to keep your plan active. Then, once you meet your deductible (which is an amount that you pay before your pet insurance “kicks in”), your insurance policy will pay or reimburse an agreed-upon percentage of your veterinary bills. There is normally a maximum limit for how much they will pay, but these details can be found in your policy or insurance quote.

Just like human health insurance, pet health insurance doesn’t cover everything. Most plans will cover unexpected injuries and accidents, unexpected illnesses, surgery, prescription medication, tests and diagnostics, and emergency exam fees. Some plans also cover alternative treatments (such as acupuncture, chiropractic, and hydrotherapy), hospital boarding, and if your pet gets lost, expenses for advertising and offering rewards. However, most plans won’t cover pre-existing conditions, routine care and wellness exams, preventative care, spay/neutering surgeries, or vaccinations.

Those interested in pet insurance should be aware that pets with pre-existing conditions can still be eligible for insurance, but their policy will exclude their condition. Also, policies can have add-ons included, such as the Wellness Plan add-on, which will cover routine care.

How Much Does Pet Insurance Cost?

Like almost all insurance policies, pet insurance has a monthly cost. While the amount you’ll pay per month will depend on multiple factors (such as your pet’s age, breed, and the policy coverage you choose), the average is approximately $29 per month for cats and $47 per month for dogs. However, rates can range from anywhere between $12 per month to $100 per month. Pawlicy Advisor gives the below chart as an example of the varying costs of pet insurance depending on age, breed, and location.

Dogs and cats are the two most popular types of pets in US, followed by freshwater fish, then birds, then small animals such as gerbils or hamsters. But don’t worry – you can get policies to cover almost every type of pet. This “Every Pet Insurance” covers almost all pets, but specifies that it won’t cover venomous or poisonous species, species which are endangered or threatened, or animals that require a special permit or license to own or are illegal to own. (Too bad for all those rattlesnake owners out there!)

Pet Insurance vs. No Insurance

No one can predict the future, but insurance is useful to have if you suddenly are facing lots of unexpected vet expenses. How does the cost of pet insurance stack up against the cost of paying out-of-pocket for vet care?

Using the above chart for a domestic shorthair kitten, let’s assume you purchase coverage when the kitten is 6 months old for $11 per month. The average age of a domestic shorthair is about 13 years  (although many cats live until their early twenties). With 12 months in a year and paying $11 per month, that’s a total cost of $1,716 for pet insurance for your cat’s lifetime. Now, using one of Pawlicy Advisor’s examples, let’s assume your cat needs a dental extraction, and that your policy has a $200 deductible with a 90% reimbursement rate. The extraction costs $1,400, but you would only pay $320 (the $200 deductible plus 10% of the remaining vet bill). That means that insurance will have saved you $1,080 on this one veterinary procedure. Throw in one or two more vet bills and the amount you save will almost definitely cover the cost of your pet’s monthly payment.

Of course, if your pet lives a perfectly healthy life until the end, you may not have saved anything. However, it’s estimated that 1 out of 3 pets will need an emergency vet visit each year, and 69% of Americans don’t have enough savings for a huge veterinary bill. Therefore, pet insurance is a wise option for many.

Will My Vet Accept Pet Insurance?

Typically, vets will accept any type of pet insurance. This is because, unlike human health insurance, you submit any veterinary claims yourself. (For human health insurance, the doctors will submit claims on your behalf, and therefore will need to have a prior relationship with that insurer.) However, it’s a smart idea to talk to your vet about their experiences with pet insurance companies, and confirm that they will be able to work with your preferred pet insurance plan.

Is Pet Insurance Right for You?

Surprisingly, despite the fact that there are approximately 94.2 million pet cats and 89.7 million pet dogs in the US, only about 3.1 million pets are insured. That’s only about 1.69%. Most people probably don’t think a lot about pet insurance, or assume that their savings will be enough to cover any unexpected costs. However, it’s clear that pet insurance is very useful to have in an emergency. If your pet gets sick unexpectedly, the last thing you want to be worrying about is the cost. With that said, consider getting some insurance quotes and finding the purrr-fect policy for you!

Fun Furry Facts!

Let’s end this blog post with some fun facts about our favorite furry companions!

Pet insurance first started almost 100 years ago in Sweden. Currently, almost 50% of Swedish pets are insured.

The first pet to be insured in the United States was the dog who played Lassie in 1982, and the policy was sold by a subsidiary of Nationwide.

Bailey and Bella are the most popular dog names, while Bella, Tigger, Chloe, and Shadow are the most popular cat names!

Are dogs, cats, or even birds and fish not exciting enough for you? Check out some unusual pets by clicking here – from alpacas to giant millipedes, lots of different animals can be considered pets!

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