How to shop for pet insurance
One happy consequence of the COVID-19 shelter-in-place orders last spring was that animal shelters were emptied by rescuers seeking companionship. Hopefully, it all worked out well for the pets and their new owners. But since this is a personal finance column, it’s also important to note the financial responsibility that comes with pet ownership.
Yes, there’s a cost for pet food and annual medical visits for shots, not to mention grooming and supplies like flea protection and heartworm meds. It’s estimated that Americans spent over $75 billion on their pets in 2019. Beyond that, you could have some expensive vet bills at some point in the future. And even if you consider your pet a member of the family, they are not covered by your health insurance policy!
That’s why you might consider taking out a separate pet health insurance policy, so you’re never confronted with a horrible decision based on money if your pet has a serious illness or accident. These days your dog can be successfully treated for the same ailments as humans — ranging from plasma therapy for arthritic joints to cancer treatments — but those costs are truly stratospheric. Even treating common problems like allergies or ear infections can make a dent in your wallet. That’s where pet insurance comes in.
Rob Jackson, CEO and cofounder of Healthy Paws, one of the largest pet insurance providers, says there’s a big difference between pet owners and “pet parents,” who typically buy insurance. How can you tell which is which? Says Jackson, “If your pet sleeps on your bed with you, you’re a pet parent!” And more than 550,000 pet parents have signed up at HealthyPaws.com for this coverage.
Pet insurance is a rapidly growing industry, with big names backing the policies. Healthy Paws is part of the Aon insurance empire. There are several large competitors in the business, and many smaller companies as well. Even retailer Petco offers a private-label policy. You can compare consumer ratings and policy offerings at PetInsuranceReview.com.
But it helps to know exactly what to compare, beyond the monthly premium.
—Coverage. Pet insurance isn’t meant to cover the ordinary expenses like vaccinations or annual checkups and heartworm tests. Instead, you’re buying coverage for accidents, illnesses, surgeries, diagnostic tests and other unusual health events. Not all policies cover the same issues. Many exclude (either permanently or for one year from purchase) coverage for hereditary diseases, such as hip dysplasia. So check the coverages before comparing price.
—Cost. The monthly premium you pay depends on choices you make about how much coverage you want. Typically, there will be a choice of co-payments (the portion you pay), with the most popular being 20%. There will also be a choice of deductibles, ranging from $200 to $1,000. The higher the deductible, the less expensive the monthly premium. But be sure there is no overall cap on payouts, either for one illness or for lifetime coverage.
—Process. Some companies take longer to reimburse expenses, requiring you to put charge the vet bills on your credit card. Healthy Paws has an app, allowing you to upload the bills, which they say are reimbursed within a couple of days — before you get your credit card bill. They even work with vets to pre-approve emergency costs and pay the vet directly.
—Timing. Coverage should start within 15 days from purchase of the policy. You’ll need to have a recent vet examination to serve as a “baseline” of good health for future claims. Policies do not cover pre-existing conditions, so the time to buy is when your pet is young. That will start you out with lower premiums. But it may still make sense to buy a policy for a healthy older dog or cat.
If you’ve read this far, you understand the emotional as well as financial draw of buying health insurance for your pet. So how much will it cost? I’m in the process of getting a new puppy, which triggered the research for this column. It’s easy to get the cost instantly at Healthy Paws. At under 10 pounds (size, breed and location matter in pricing), I’ll be paying about $25 a month.
I hope I never need to use this policy, and that it turns out to be a big waste of money! But that’s the way I feel about all my insurance. And that’s The Savage Truth.
(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)© 2020 TERRY SAVAGE