Whut you means we not worth insuring?
No matter how much I like my cats, they’re ultimately just furry freeloaders. You’d think that they’d pick up part time jobs or something, but no dice- like adult children living at home or my notorious QCV stock, they continue to cost me significantly more money than they bring in.
I’ve accepted that my pets are going to cost me money in food and basic care- those items can be budgeted for. But it’s the unexpected vet bills that cause me some concern. Just a few months ago, one of my cats had an illness that cost me close to $400. Similarly, Blunt Money wrote yesterday that her cat has been diagnosed with liver failure, with a potential bill in the range of $400 to $1,000.
FreeMoneyFinance had a lively discussion a few weeks ago after asking the question that every pet lover dreads: “How Much Would You be Willing to Spend to Save Your Pet’s Life?” I probably fall on the high end of the scale- provided that a full recovery and decent standard of life is likely, the vet bill would have to be well in to the thousands before I would even consider not going ahead with treatment. But I might be an exceptional case- in addition to being a crazy cat person, we’ve got a good emergency savings, a decent income and cash flow, and access to a lot of credit if we should need it. Not everybody has that luxury, and even though I’d be more than willing to dip into my savings to pay for treatment, it would certainly be nice if I didn’t have to. For that reason, when we first got our kittens I looked into a number of pet insurance options to help cover vet costs should the need arise.
What Pet Insurance Covers
There are a number of companies offering pet insurance in both Canada and the US, and most offer a number of levels of coverage, ranging from limited coverage for certain accidents to full coverage “Cadillac” packages offering unlimited coverage for all accidents and illnesses, some even including annual checkups and other regular visits. There are as many packages and combinations as there are cat hairs on my dress pants, but as with most things, to get more you need to pay more.
Coverage is generally broken down between accident coverage, which includes accidents such as Fido getting hit by a moped or attacked by a polar bear, and illness coverage to take care of things if Fido developing a heart problem or is diagnosed with a disease. Routine vet visits and vaccinations are not covered for most plans (those that do provide this coverage generally cost a fair bit more), and not all accidents and illness are covered- pre-existing conditions are generally excluded from coverage, and there are often breed-specific exclusions for conditions particularly common to certain breeds, such as hip dysplasia and certain respiratory problems. To my surprise, many plans also exclude coverage for eye injuries, so tell Mittens not to run with scissors or play with that BB gun. He’s sure to shoot his eye out.
What it Costs
The premiums you pay can range from about $9 per month (per pet) for limited accident coverage for cats to over $85 per month for the more deluxe packages for dogs. Most policies also have limits on coverage amounts, annual or per-incident deductibles, and a co-insurance (read: you pay) of 20%, so even though the insurance company will pay the bulk of the vet bill, you’re still going to be on the hook for something.
In looking for rates for Lenny*, a 2 year old domestic short hair cat, these are the rates I found for typical mid-range coverage:
| Pet Care MasterCare 80% for Cats | Pet Secure
Secure 2 |
President’s Choice Choice Plan | |
| Cost (monthly / annually) | $22.50 / $270.00 | $22.78 / $273.36 | $17.97 / $215.64 |
| Accident Coverage | 80%, up to $2,000 per accident | 80%, up to $2,500 per accident | 80%, up to $2,500 per accident |
| Illness Coverage | 80% coverage up to $2,500 per illness category | 80%, up to $2,500 per illness per year | 80%, up to $2,500 per illness per year |
| Deductible | $100 annually; increases with age | $100 annually | $100 per accident; $100 annual for illness (increases with age) |
Dogs cost a little more. For our as-of-yet imaginary golden retriever puppy named Ferpher, the rates looked like this:
| Pet Care MasterCare 80% for Dogs | Pet Secure
Secure 2 |
President’s Choice Value Plan | |
| Cost (monthly / annually) | $37.95 / $455.40 | $38.61 / $463.32 | $25.41 / $304.92 |
| Accident Coverage | 80%, up to $2,000 per accident | 80%, up to $2,500 per accident | 80%, up to $2,500 per accident |
| Illness Coverage | 80% coverage up to $3,000 per illness category | 80%, up to $2,500 per illness per year | 80%, up to $2,500 per illness per year |
| Deductible | $100 annually; increases with age | $100 annually | $100 per accident; $100 annual for illness (increases with age) |
Is it Worth It?
To help determine whether the coverage offered by pet insurance is worth the cost, I checked with a veterinarian friend to get an idea of average fees faced by pet owners with an ill or injured pet. She tells me that an average visit, including examination and basic treatment, will usually cost somewhere between $75 and $200, although bills of $500 are not uncommon. X-rays can run anywhere from $50 to $100, a standard surgery will run $200-$500, and a sleepover at the vet (what fun!) will cost around $35 per night. According to her, there are some major procedures and operations than can cost in excess of $3,000, but these tend to be less common. I’ve had pets for most of my life, and these numbers are fairly consistent with what I’ve seen.
Based on these numbers, I find it hard to justify the cost of pet insurance. When you consider the deductibles and co-pay expenses, you would probably need several insured visits in a year just to break even. And remember, annual checkups and vaccinations aren’t included.
Of course, the real value in pet insurance (or any other form of insurance, for that matter) is not coverage for the little things, it’s for the big things- those $3,000 bills that were mentioned. Yet even with the risk of such high expenses, pet insurance comes up short. Let’s assume that Rover lives 12 years, and you’ve been paying $25 per month for coverage all along. Over Rover’s lifetime, you will have paid $3,600. Unless he requires multiple, major treatments over this period, you would do better to save your premiums and dip into savings should the need arise. It is possible that he will require more treatment than that, but it’s not likely. Insurance is all about managing risks and protecting yourself, and this is a risk that you should be able to handle without putting your assets (or pets) at serious risk.
If you really have no savings and no access to funds in the event of an emergency, pet insurance may provide peace of mind and security. But if you’re in such a position, the monthly premiums may be put to better use establishing a fund to cover contingencies, as that money can then be used for more than just vet care, should the need arise.
* Yes, my cats (one mostly black, one mostly white) are named Lenny and Carl. Fans of The Simpsons will get the reference. And yes, my wife let me name them that. She’s awesome.
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I know I will get flamed by this but here goes anyway. If you have a real pet (e.g., a dog that is not a lap dog like my two black labs) spend the money. If it is a disposable pet (e.g., a cat with attitude), save your money for something better. OK, fire away.
My cats (both with attitudes) are as much “real pets” as any slobbery leg humpers ;).
I take your point about some pets being viewed as disposable, though. If you’re not that concerned, insurance makes no sense whatoever. But even with “real pets”, I’m don’t think that pet insurance offers a lot of benefit. The premiums cost more than the likely benefit, and the worst-case scenario isn’t so catastrophic or expensive as to jusitfy having coverage for peace of mind.
Mr. ToughMoneyLove, I’m assuming you’ve got insurance on your labs? Have you found it to be of much benefit?
I’m with the MGL on this one. I’ve had pets all my life and none have been ‘disposable’.
At the same time, most of the procedures that run into the extreme range end up bordering on 50% and below survival rate. While I love my pets to death, spending thousands of dollars to put them through procedures that will cause them grief and still have a low percentage of recovery would hurt more than just the pocket book?
I’ve had insurance for my mastiff since she was a puppy, and it has been well worth it. The peace of mind of knowing that I don’t have to worry about vet bills is worth it, and I’m not reluctant to give her the best treatment available. Insurance isn’t just about breaking even, it’s about security. You’re probably not going to break even on your house or car insurance either.
@Colby - good point about the survival rates for some of the exteme (and extemely expensive) procedures. If a pet requires $15,000 of vet care, I can’t help but wonder whether it will survive and, if it does, what kind of quality of life it’s going to enjoy.
@Pervez - Thanks for the comment. Do you find that you use your pet insurance much, or is it mainly for the peace of mind?
I’d also note that the big difference between pet insurance and home/auto insurance (aside from the fact that I’m required to have these!) is the potential costs of a claim- for pet insurance, it is extremely unlikely to need more than $10,000 for an accident or illness. For home/auto, claims of $100k or more are common. If I absolutely had to, I could take a $10k hit, but a $100k hit could be devastating.
Aww, lookit the baby Lenny and Carl!
This is all pretty much what I’m thinking. If Charlie had needed $3000 surgery when he got sick (and it was a possibility), we wouldn’t have been able to pay for it- but then, we couldn’t afford the insurance, either. I would’ve done whatever we could for him, but I’m pretty sure AJ considers cats disposable- I think “ungrateful” and “demon” are words that have been tossed around from time to time…
You’re too funny. I know I shouldn’t laugh about Fido, mopeds and polar bears, but, well, I did. Thanks.
I have VPI “Superior Plan” coverage on both of my large-breed dogs, at $264/year each. The vet costs you’ve listed here are very low compared to my area (DC suburbs). A night in the hospital with IV fluids, combined with the emergency visit that brought you there, and the complete blood count and chemistry tests, you’re looking at $700, possibly $1000 if the dog gets meds during the hospital stay. I’ve had two major incidents, one with each dog, that have cost me over $2500 combined. The insurance reimbursement for those vet visits was well over the cost of coverage, for at least two years for each dog.
Yes, it’s just anecdotal evidence, but the cost of insurance versus the cost of care in my area makes it well worth it.
(Both incidents involved dogs eating something they shouldn’t and thus were “accident” claims.)