Should you buy pet insurance?





With vet bills soaring and fancy new treatments available, it's an option more owners are considering. Plus, 8 ways to cut the cost of keeping a healthy pet.

By Liz Pulliam Weston

A few years ago, pet insurance would have ranked right up there with policies on children and dread disease coverage on my list of insurance you dont need to buy.

Now Im not so sure.

I still believe most people are better off forgoing the policies and instead putting the money they would spend on premiums into a savings account. Pet insurance can cost ,000 to ,000 over the life of an average pet, and the chances are slim youd ever have to shell out that much for treatments.

But if youre the type of person who would do anything to save your pet, including spend thousands of dollars on medical treatments, pet insurance might be a preferable alternative to going into debt.

New tests, new treatments, monstrous bills
Whats changed in recent years is the state of veterinary science, as well as the economics of running a veterinary practice. Vets today can offer treatments that were unheard of just a few years ago -- and at prices that could make you howl. Consider:
Treatments once reserved for humans, from radiation therapy to kidney transplants, are currently available for pets. That means once-fatal conditions are now treatable at costs ranging from ,000 to ,000 or more.
Vets have access to increasingly sophisticated and costly diagnostic tools such as MRIs. Such screenings not only boost the cost of exams but often detect problems that once would have gone unnoticed, and untreated.
These expensive tools and procedures have helped create health-care inflation in the pet doctor world. Vet costs have risen 73% in the past five years, to billion.
That inflation has helped fuel a significant rise in the pet insurance industry. American Demographics magazine estimates that 5% of American pet owners have the insurance, up from less than 1% in 1995. Insurers have teamed with the American Kennel Club and Petco Animal Supplies to offer the insurance, while several major employers now provide the coverage as an optional employee benefit.

Deductibles, exclusions and surcharges
The oldest company, Veterinary Pet Insurance, has seen its revenues climb at a 40% annual rate since 1997 -- the year it finally broke even after 15 straight years of losses, according to founder Jack Stephens. VPI, which has about 85% of the pet insurance market, had gross sales of 0 million last year.

Pet insurance is far from a cure-all, though:
The policies typically have deductibles, co-pays and caps that limit how much will be paid out annually.
Pre-existing problems and hereditary conditions, such as hip dysphasia in German Shepherds and retrievers, are normally excluded.
The older your animal, the more youll have to shell out in premiums. Some insurers dont cover pets older than 9, while others levy a stiff surcharge.
Industry leader Veterinary Pet Insurance offers two levels of coverage that pay 50% to 90% of covered treatment costs after a deductible. Heres how the numbers work out.

Premiums and coverage for pet insurance
Item Standard plan Superior plan
Deductible
Co-pay* 10% to 50% 10% to 50%
Cap per accident/illness ,500 ,500
Annual cap ,000 ,000
Kitten premium** 2
Mature dog premium*** 4 1
Adult cat**** 4
Adult dog***** 4 9

*The co-pay varies by condition, level of coverage and vet costs in your area. The standard plan pays 0 for removing a foreign object from an animals intestines; the Superior plan pays ,363. *Kitten premium: Annual premium for a domestic shorthair less than a year old living in Los Angeles. ***Mature dog premium: Annual premium for an 8-year-old Labrador retriever living in Los Angeles. ****3-year-old adult cat in Seattle.*****3-year-old adult mixed-breed in Seattle.
Source: Veterinary Pet Insurance

Since insurance is best used as protection against catastrophic expenses -- not those you could easily pay out of pocket -- the question becomes: How deep in the hole would you go for your pet? And then could you afford to pay those costs yourself?

Pet insurance is a non-starter for many pet owners, simply because they take a pragmatic approach to their animals. If the cost of treatment got too high, they would choose to put the animal to sleep.

About half see the pet as disposable. If it got really ill they just wouldnt treat it, said Stephens, whose company conducted research on the issue. The other half were willing to treat, whatever it took.

(Keep in mind that a pet's teeth may be yellow due to early antibiotics like tetracyclinetotally normal.

Pet Purgatory In North Of Scotland

Even if one cannot afford an office visit, a pre-dated check will due.

Our pet insurance program policies pay 70% of the payable claim after the fixed deductible up to the policy limit. Here is how she would have fared, had she been insured with the two most viable pet insurance plans at the time (1992): Medipet* Plan A would have reimbursed me about 7. It's a very different outlook for pets in the North of Scotland where canny owners take a far less sentimental view of their pets.