Is pet insurance worth it? – Forbes Advisor

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If your pet is injured or sick, pet insurance covers medical expenses. What was once an obscure insurance product is gaining popularity. Pet insurance purchases increased for dog and cat owners (and almost doubled for cat owners), according to the 2021-2022 National Pet Owners Survey. American Pet Products Association.

If you want pet accident and sickness insurance, our analysis found that the average monthly cost is around $57 for dogs and $28 for cats, based on annual coverage. of $5,000 with a deductible of $250 and a reimbursement level of 90%.

If you’re considering jumping on the pet insurance bandwagon, you might be wondering if pet insurance is worth it. Here are some things to consider.

The cost of maintaining a pet

Before determining if pet insurance is worth it, it is essential to know what costs you face. For starters, expenses such as food, toys, treats, licenses and grooming supplies average about $465 for dogs per year and $501 for cats per year, according to the ASPCA.

And that doesn’t include the cost of routine and preventative pet care, such as vaccinations, flea and tick medications, and routine exams. That’s still $410 per year for dogs and $300 per year for cats.

While these costs add up, they don’t hit as hard as the cost of unforeseen medical emergencies. For example, if your dog tore his ACL while chasing a ball, the surgery could cost you thousands of dollars.

Many pet owners may not be able to absorb these medical expenses out of pocket. More than a third (36%) of Americans are unable to cover a $400 household emergency in cash, according to a 2021 Federal Reserve analysis of household well-being.

And if you’re unable to afford proper care for your pet, long-term expenses could skyrocket. For example, suppose your Pug suffers from chronic subluxation (meaning his hip doesn’t stay in place). If you don’t have the funds to treat this medical problem, you could adopt a “see how it heals” action plan, which could lead to chronic pain and recurring drug expenses.

It should also be mentioned that some pets are prone to hereditary conditions that could increase their care costs. For example, large dogs like Border Collies, Labrador Retrievers, Great Danes, and German Shepherds are more likely to have hip dysplasia, which can cost between $3,500 and $7,000 to treat, sometimes even more, depending on the situation.

What does pet insurance cover?

Now that you’ve taken a crash course in the cost of pet care, you’ll want to identify what pet insurance covers. An insurance policy will state how much the insurance company will pay for medical expenses.

Accident and sickness insurance plans typically cover:

  • broken bones
  • Toxic ingestion
  • Dental diseases like gingivitis
  • Chronic diseases like diabetes
  • Breed-specific conditions like hip dysplasia
  • Emergency care
  • Operation
  • Disnitic test
  • Hospitalization and surgery
  • Prescription drugs

An accident-only pet insurance plan will cover veterinary costs related to an accident, such as a torn ligament or a pet swallowing something poisonous. But an accident-only plan won’t cover veterinary costs related to an illness, such as ear infections or cancer.

Some pet insurance plans have the option of adding wellness or routine care coverage. This option covers expenses such as routine exams, microchipping, vaccinations and flea/tick prevention.

Pet Insurance Deductibles, Reimbursement and Coverage Limits

When you choose a pet insurance policy, you choose a deductible amount, which is the amount you pay before the pet insurance starts paying out. Common amounts per insurance deductible range from $50 to $1,000. Generally, there are two different types of pet insurance deductibles:

  • Annual deductible: You will be responsible for paying the deductible each term of the policy. Once your deductible is reached during the term of the contract, you will not have to pay it again until the following year.
  • Deductible per condition: You will pay a deductible for each condition or incident. For example, if your pet suffers from chronic allergies, you will pay a deductible for medical expenses related to this treatment. Once your deductible is reached, you will no longer have to pay it for veterinary costs related to this condition. However, you will have to pay another deductible if your pet develops a new condition or incident.

You will select a level of reimbursement, which corresponds to the share of veterinary costs that your insurer will pay (after the deductible). Common reimbursement levels are usually 70%, 80% or 90%. However, some insurance companies like Figo reimburse 100% of your veterinary costs.

Your pet insurance company may also allow you to choose an annual coverage cap, such as $5,000. Some companies like Pets Best, TrustedPals and Spot have unlimited coverage.

How much does pet insurance cost?

Our analysis found that the average annual cost is approximately $684 for dogs and $336 for cats, based on annual coverage of $5,000 with a deductible of $250 and a reimbursement level of 90%. But your costs will vary depending on factors such as:

  • Pet breed. Some animals are more susceptible to certain conditions than others. For this reason, insuring certain animals may cost more. For example, larger dogs generally cost more to insure.
  • Animal’s age. As pets age, they are more susceptible to accidents and illnesses.
  • Sex of the animal. Female pets may be considered a lower risk, which may result in lower pet insurance premiums.
  • Site. Vet fees vary by location. If veterinary costs are higher in your area, you may pay more for coverage.

Related: How much does pet insurance cost?

So, is pet insurance worth it?

Insurance companies are not in the business of paying more in claims than they collect in premiums. But that doesn’t mean the odds are always stacked against you. If you’re stuck with a large, unexpected vet bill, what you paid in premiums may be far less than what you receive in reimbursement. And that is the main point of insurance: to have financial protection against major disasters.

Here is a scenario:

  • Premiums: Let’s say you’ve been paying for pet insurance for your dog for three years at around $684 per year. That’s $2,052 so far in pet insurance premiums.
  • A big veterinary bill: Then your dog ingests one of your toddler’s toys, which ends up costing $4,000 in vet bills. If you have a deductible of $500 and a reimbursement level of 90%, your out-of-pocket for the incident would be $850 ($500 deductible + 10% of 3,500 = $850).
  • The result: Adding up the bonuses for three years and the toy incident, you paid $2,902. Without pet insurance, you would have paid $4,000 for the vet. You saved around $1,100 by having pet insurance.

“What is important to know is that four out of five pets will have an unexpected emergency. You don’t know if it’s going to happen three months or three years after you buy your pet,” says Walter Haugland, vice president of marketing for Pets Best. “It is almost impossible to foresee the unexpected. This is where pet insurance comes in.

When deciding if pet insurance is worth it, ask yourself:

  • What are you willing to pay out of pocket for vet bills?
  • How would you pay for expensive veterinary expenses if something happened, like an accident or illness like cancer?

You may already have an idea of ​​how much you would be willing to pay in veterinary bills in an emergency. But if your pet is truly in a life-and-death situation, “you might be willing to stretch the budget further than you ever imagined,” Haugland says.

“Overall, buying pet insurance can give pet owners peace of mind and options so they can make the best possible care decision for a pet. company, without financial risk,” says Haughland.

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