Skip NavigationMy chunky, precious, expensive baby boyKamaron McNair
When I got my dog, Otis, in the fall of 2020, I knew I was taking on an adorable, but serious financial responsibility.
I’ve tried to make smart financial moves to pay for his care over the years, including getting a pet insurance policy when I first brought him home, and renewing my plan each year.
The policy covers accidents, illness and some preventative care. It really came in handy during his puppy years when we had to go to the vet several times in a year for his vaccines, neutering and a few health concerns. I easily hit my $750 annual deductible in his first year, and got nearly $1,000 back in reimbursements after paying roughly $2,600 in vet bills for his shots, neutering, cherry eye surgery and prescriptions.
But in May, Otis put my financial planning to the test when he ate a chunk of his tire toy and wound up at the emergency vet. It was terrifying, but luckily the ordeal wasn’t as bad as it could have been. He didn’t need surgery, but he went into severe dehydration expelling the rubber and required IV fluids and overnight monitoring at the hospital. I was incredibly grateful he was OK. But the emergency care cost me $6,083.
Otis with the tire toy that landed him in the hospitalKamaron McNair
I had to pay up front, so I put it on my credit card knowing I had the emergency savings to cover it. But I also assumed my pet insurance would take care of most of the bill. I knew my reimbursement rate was 70% after my $750 deductible. I did not remember at the time that I had an annual reimbursement limit of just $2,500.
Covering the nearly $3,600 out-of-pocket expense made me wonder whether my policy was worth it. Putting an amount equal to my monthly premium of $73 in savings each month wouldn’t have gone very far in the face of such a large bill. Getting more coverage to increase or even remove my annual reimbursement limit is an option, but could nearly double my monthly premium — and the hope is that I won’t have to use the policy for such a big bill again.
I spoke with two financial planners to see how they advise pet owners to prepare for unexpected costs. Here’s what I learned.
Is pet insurance worth it?
It may only take one emergency vet bill to prove that pet insurance is worth it for you — or not. Jeff Judge, a certified financial planner based in Maryland, says deciding whether to get a policy is less about your monthly premiums and out-of-pocket savings with a policy, and more about your overall financial situation.
“The real question… [is] ‘Could I write a four-figure check tomorrow without raiding money I need elsewhere?’” says Judge, who has three dogs himself.
Without pet insurance, you’re on your own to cover a massive vet bill. And for individuals and families with the savings or disposable income to comfortably foot that bill, it might not be worth it to pay a premium each month for insurance they ultimately could wind up not needing. Others, however, may not be able to stash away a savings fund comparable to the coverage they can get by paying a monthly premium.
For example, I could get a policy for Otis that would have a 90% reimbursement rate and $10,000 annual limit for about $170 a month with his current provider, Spot Pet Insurance, according to a quote on their website. If I put the same amount into cash savings each month, it would take me nearly five years to rack up $10,000 — time during which I’d have to hope a major vet bill didn’t come due.
The most adorable puppyKamaron McNair
You have a variety of options to choose from when you’re shopping for a pet insurance plan, and a few levers to pull to help keep costs down. You could opt for a lower monthly premium that leaves you more cash month-to-month, but it may have a lower reimbursement rate or annual limit. A higher deductible could also give you a lower monthly payment.
In retrospect, I wish I had a higher annual reimbursement limit, but I’m comfortable with my current monthly premium and the ability to save extra cash for any emergencies, not just Otis-related incidents. And in cases like mine, Judge says an insurance policy paired with an emergency fund is a good route.
Paying for peace of mind
While a flush emergency fund can help provide some peace of mind for any accidents or illnesses you run into with your pet, an insurance policy can help remove some of the unknown factors around the hypothetical emergency, says Erin O’Brien, a CFP based in Naples, Florida who also has three dogs. Prices for vet care can range widely, making it difficult to save ahead of time. Pet-sitting company Rover says emergency vet bills tend to range from $300 on the low end to $2,500 on the high end.
Your costs can go a lot higher if your pet has a catastrophic accident or long-term illness. An insurance policy would at least give you a clear framework for what you’ll pay: your full deductible (unless the total cost of care falls below that), and the maximum out-of-pocket cost. The latter could be mitigated by your annual reimbursement limit, but you can get a policy without a limit. It’s feasible a major vet bill runs so high your maximum reimbursement feels meager. But every little bit helps.
O’Brien has pooled policies for all her dogs and says, “It’s not only been a cost saver, but [it] also takes away the hesitation to take our pups to the vet, because we know we have the coverage… The insurance gives us extra peace of mind.”
How to choose the best pet insurance policy
If you are going to get pet insurance, it’s wise to shop around to see where you can get the best bang for your buck. And when you have decided on a company and policy, make sure you read the fine print so you don’t have any surprises when you need to file a claim, Judge says.
Additionally, focusing on the monthly premium is, “the wrong starting point,” he says. Instead, pet owners should pay close attention to the following factors:
- Reimbursement rate: whether it’s a percentage of your bill or a fixed benefit schedule
- Annual deductible: how much you will have to pay out of pocket before the company reimburses you
- Annual reimbursement limit: the maximum amount each year you can get reimbursed
- Fixed vs. variable premium: how much you pay each month or year, and whether that increases as your pet ages
- Exclusions: if your pet has a pre-existing or breed-specific condition that may not be covered
He watches my back, I watch his.Kamaron McNair
Going forward, I’m planning to boost my emergency savings a bit knowing that Otis’ current policy only goes so far. I may explore options for more coverage, especially as he gets older, but in the end, I like having the peace of mind that I’m not completely on my own to cover his costs of care.
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