Our pets are our cute, lovable companions, and like everything else under our roof, they come with their share of costs. However, unlike a roommate, you can’t expect your pet to help with his share of the bills.
Of the two-thirds (67%) of American pet owners (defined as current cat and/or dog owners), 24% have pet insurance, according to a new NerdWallet survey conducted online by The Harris Poll of 1,366 pet owners. Pet insurance can help with certain medical expenses, but it can be expensive and may not be right for everyone.
Insurance is a tool to help protect you from unexpected or large expenses. You insure your car in part because it is legally required, but also because it is usually more manageable to pay a few hundred dollars a month than it is to cover the higher costs of car damage and injury after a serious accident. Also, you can insure the important jewelry to protect yourself from financial loss if it is damaged or stolen.
As with these examples, pet insurance requires you to make regular payments, in the form of premiums, in exchange for potentially covering larger costs. But also like these examples, the decision to sign up for pet insurance should come after careful consideration of your needs and coverage options.
Here are four times it might make sense to sign your furry friend up for coverage:
1. You expect your pet to need more than usual care
More than 2 in 5 pet owners (42%) who have pet insurance say they have it because their pets often need care covered by their policy, according to the survey. If you expect ongoing covered expenses, monthly insurance coverage premiums can help smooth out your costs. Some breeds may be more prone to medical problems than others, for example, so look at the characteristics of your particular type of pet when evaluating potential care costs.
However, pet insurance rarely covers it pre-existing conditions. This means that pet insurance is unlikely to pay for ongoing kidney problems or cancer treatment, for example, if your pet had those conditions before you got the policy. Also unlikely to be covered: routine care and spay and neuter proceduresunless you pay extra for preventive care coverage.
For these reasons, budgeting for common expenses is a good idea whether or not you get a pet insurance policy. Carefully read the details of any policy you are considering to determine how often you are likely to file successful claims.
2. Your pet is accident prone
Some pet insurance carriers offer accident-only coverage. Maybe your dog has a habit of getting loose and you’re worried about him getting hit by a car, or he probably eats things he shouldn’t. If so, an accident policy may cover the emergent costs associated with these events. Accident-only pet insurance is usually cheaper than more comprehensive policies.
3. You cannot pay covered expenses out of pocket
If you are able to pay cash for the care your pet needs, purchasing insurance coverage may not be necessary. You are paying for the insurance service, not just the veterinary care. Ask yourself: If your dog needs an expensive procedure, can you afford several thousand dollars in surgery costs? If so, insurance may not be a good value.
Although 40% of pet owners with pet insurance have a policy to reduce their costs, having insurance doesn’t mean you don’t have any out-of-pocket costs. Like human health insurance, pet insurance is usually included deductibles and scope limitations. For example, with a $500 annual deductible, you’ll need to cover the first $500 of vet bills in the year before your insurance policy starts covering the costs. And then, it can only pay a part.
Bottom line: Read the policy details to know what you’re really getting in exchange for the premium. You may find it simpler and more economical to create a separate emergency fund just for unexpected pet care expenses.
4. Peace of mind costs a premium
More than half (57%) of pet owners who have pet insurance say they have it for “peace of mind,” making that the most commonly cited reason for having such a policy, according to the survey. Pet care costs can be substantial, and 13% of pet owners say those costs are a source of financial stress. If the thought of a large emergency vet bill worries you, the monthly pet insurance premium may seem like a fair price to pay for a sense of financial and emotional security.
