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 Pet Insurance: Lifesaver or Ripoff? By Nancy Twigg
The fear of facing such a difficult choice is the basis of a relatively new product called pet insurance. Just like family health coverage, pet insurance is designed to make your pet’s medical care affordable. Recently, when we were faced with some emergency veterinary expenses, I began to wonder about the feasibility of pet insurance. Thankfully, our cat's injury was not life-threatening, but it did run up a bill close to three hundred dollars. This made me wonder if having pet insurance would have saved us from such expenses. In researching pet insurance companies on the Internet, I found the most information about two companies: Veterinary Pet Insurance and Premier Pet Insurance.* The policies offered by Veterinary Pet Insurance (VPI) are geared toward treatment of serious health conditions, although common problems are also covered. Coverage for routine check-ups, vaccinations, and dental care is an extra $99 per pet per year. VPI carries two types of policies. The difference between the two is the maximum each pays for covered injuries and ailments. There is a $40 per incident (per pet) deductible; after that is met, both plans pay 80% of the first $180, and 100% of anything over $180 up to the maximum allowed by that plan. If you opt for routine care coverage, there are set reimbursements for each shot or procedure. Premier Pet Insurance (PPI) has three different policies. The difference between the three is the extent of coverage and the limit each plan covers per incident and per year. The most basic and cheapest plan covers only treatment of illness and injury, and spaying and neutering. The other two plans add annual physicals and vaccinations. The most expensive of the three covers pet dental care and additional vaccinations. All three plans require a $100 per year (per pet) deductible; after that is met, 80% of all covered expenses are reimbursed. For the purpose of illustration, I compared coverage that included yearly shots and dental care. Using our two- pet household as an example, here is a breakdown of what each plan would cost: Veterinary Pet Insurance: $ 223.00 per year for a 10yr old pet (Basic plan) - 11.15 (5% multi-pet discount) + 99.00 Vaccination and routine care coverage $ 310.85 Yearly premium for one pet x 2 Addition of second pet $ 621.70 Total annual premium Premier Pet Insurance: $ 312.00 per year, one pet (Premier Ultimate plan) - 31.20 (10% multi-pet discount) $ 280.80 Yearly premium for one pet x 2 Addition of second pet $ 561.60 Total annual premium Let's compare these figures to our typical veterinary expenses. Last year, we spent a total of $238.08 for routine vaccinations and dental care for our cats. In addition, the little incident I mentioned earlier (a broken foot) cost us an additional $271.07. Thus, we spent a total of $509.15 last year on veterinary care for our two cats. Under the VPI plan, we would have been reimbursed $384.91 of that $509.15. Adding the uncovered portion ($124.24) to the annual premium ($621.70), our total cost would have been $745.94. With the PPI plan, only $261.83 of the $509.15 would have been reimbursed. Adding the uncovered portion ($261.83) to the annual premium ($561.60), we would have spent $823.43. As you see, with both plans we would have paid more for the luxury of having insurance than we would have paid for the actual veterinary expenses. Therefore, in the case of routine care and minor incidents such as we had, pet insurance is not worth the expense. But what if we had encountered more serious problems? What if Wheezer had needed surgery to reinforce the bone with a plate? That surgery can cost as much as $2000. In the case of such expensive procedures, either of these policies would have saved us more in benefits than we paid into it in premiums. Rip-off or Bargain? Is pet insurance a good deal? If you're facing thousands of dollars of medical bills in order to save your pet's life, you would probably wish you had it. Otherwise, in the case of average veterinary expenses, pet insurance would not be a wise investment. Would I say pet insurance is a rip-off? I believe the concept is good–saving pet owners from going into debt or having to base their pets' health care decisions on what the family can afford. The concept is good but the method is flawed. If pet owners really want to insure their pets, they would do better to self-insure. By regularly saving for future pet expenses, you will eventually build up a stash so the money is there if the need arises. Of course, your pet could have a serious illness for which you had not saved enough money, but there is probably a greater possibility that your pet won't encounter any major problems and you'll then have that money that can be used for something else. ______________________________ Nancy Twigg is the editor of Counting the Cost, a free e-mail newsletter on simple and frugal living. Published with permission. All rights reserved © 2009 AnswersForMe.org. Click here for content usage information. * Veterinary Pet Insurance and Premier Pet Insurance |
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