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Is pet insurance worth it? – Forbes Advisor

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If your pet is injured or sick, pet insurance helps cover medical expenses. What was once an obscure insurance product has been gaining popularity. Pet insurance purchases are up for both dog and cat owners (and have nearly doubled for cat owners), according to the 2021-2022 National Pet Owners Survey conducted by the American Pet Products Association. Pets.

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

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

The cost of caring for a pet

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

And that doesn’t include the cost of preventive and routine pet care, like vaccinations, flea and tick medications, and routine checkups. That’s another $410 a year for dogs and $300 a year for cats.

While these costs add up, they don’t affect as much as the cost of unexpected medical emergencies. For example, if your dog tears his ACL while chasing a ball, the surgery could cost thousands of dollars.

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

And if you can’t afford proper care for your pet, long-term expenses could add up. For example, suppose your pug is experiencing chronic subluxation (meaning his hip won’t sit still). If you don’t have the funds to treat this medical problem, you can take a “see how it heals” course of action, which could result in chronic pain and recurring drug costs.

It’s also worth mentioning that some pets are prone to hereditary conditions that could increase the cost of their care. For example, large dogs like Border Collies, Labradors, Great Danes, and German Shepherds are more likely to have hip dysplasia, which can cost $3,500 to $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 caring for a pet, you’ll want to identify what pet insurance covers. An insurance policy will indicate the amount that the insurance company will pay for medical expenses.

Accident and illness plans usually cover:

  • Broken bones
  • toxic ingestion
  • Dental diseases such as gingivitis
  • Chronic conditions such as diabetes.
  • Breed-specific conditions such as hip dysplasia.
  • emergency care
  • Surgery
  • Dysnotic tests
  • Hospitalization and surgery
  • Prescription drugs

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

Some pet insurance insurance plans have the option to add wellness or routine care coverage. This add-on covers expenses such as routine checkups, microchipping, vaccinations, and flea and tick prevention.

Pet Insurance Deductibles, Reimbursements, and Coverage Limits

When you choose a pet insurance policy, you’ll choose a deductible amount, which is the amount you pay before pet insurance begins to pay. Common insurance deductible amounts range from $50 to $1,000. In general, 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 you meet your deductible during the policy term, you won’t have to pay it again until the next year.
  • Deductible per condition: You will pay a deductible for each condition or incident. For example, if your pet has chronic allergies, you would pay a deductible for medical expenses related to that treatment. Once you meet your deductible, you won’t have to pay again for veterinary expenses related to that condition. However, you will have to pay another deductible if your pet develops a new condition or incident.

You’ll select a reimbursement level, which is the portion of your veterinary expenses that your insurer will pay (after the deductible). Common rebate levels are typically 70%, 80%, or 90%. However, some insurance companies like Figo will reimburse 100% of veterinary expenses.

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

How much does pet insurance cost?

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

  • Pet breed. Some pets are more susceptible to certain conditions than others. For this reason, it may cost more to insure certain pets. For example, larger dogs generally cost more to insure.
  • Pet age. As pets age, they are more susceptible to accidents and illness.
  • Gender of the pet. Female pets may be considered lower risk, which can result in lower pet insurance premiums.
  • Location. Vet costs vary by location. If vet 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 receive in premiums. But that doesn’t mean the odds are always against you. If you receive a large and unexpected veterinary bill, what you have paid in premiums may be much 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:

  • Cousins: Suppose you’ve been paying for pet insurance on your dog for three years at about $684 a year. That’s $2,052 so far in pet insurance premiums.
  • A large vet bill: Then her dog ingests one of her toddler’s toys, which ends up costing $4,000 in vet bills. If you have a $500 deductible and a 90% reimbursement level, your out-of-pocket cost for the incident would be $850 ($500 deductible + 10% of 3,500 = $850).
  • The result: Adding the premiums for three years and the toy incident, he paid $2,902. Without pet insurance, she would have paid $4,000 for the vet. She has avoided paying about $1,100 by having pet insurance.

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

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

  • How much are you willing to pay out of pocket for vet bills?
  • How would you pay for expensive vet bills if something came up, like an accident or a disease like cancer?

You may have an idea at this point of how much you’d be willing to pay in vet bills for an emergency. But if his pet really does face a life-or-death situation, “he may be willing to stretch the budget further than he ever imagined,” says Haugland.

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

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