Pet Insurance:Costly Con or Household Essential?

by Carrie Boyko, CEB
with information from many web resources

My posts are typically not so long as this one, but there are times when you just need ALL the facts. I've done my best to offer many options. Here goes: With many households already feeling the pinch on their pocket, many consumers are trying to cut costs and save wherever possible. For those sharing their home with a furry friend, the cost of insurance makes many pet owners ponder the question, is the price really worth it? Let’s look at a pet insurance comparison and break down the basics every pet owner should know. There are other comparisons for the U.S. and Canada in my sidebar. The particular site linked above deals with UK companies, as I have a strong readership there, as well. Choose a comparison based on your location.

The first point to make is that when looking at pet insurance comparisons, there are some fundamentally different types of policies on the market, so while it is always worth shopping around, the cheapest quote may not actually be the best.


The lowest levels of coverage are often limited, usually to one year. Think of them as term insurance policies for pets. After the period expires, the policy can usually be renewed but the price may be recalculated and any conditions which have arisen in the past year will possibly be automatically excluded.


The Rolls Royce of pet insurance policies offer life-time coverage with no cap on amounts claimed per condition. Although these policies are usually renewable annually too, the terms are generally not re-written, so any illnesses which either have been or are being treated will continue to be covered without restriction. 


The mid-range policies offer a compromise between the two extremes and often are the type of policies featured on pet insurance comparison sites. Renewable annually, they offer continuing protection for conditions which have arisen, but with a ceiling on the amount of coverage included. Therefore ongoing illnesses should continue to be covered by the policy, provided the treatment has not exceeded the policy maximum.


With such diversity in coverage, it is easy to see how it can be misleading just to compare the cost of policies. However, the differences do not end there – many insurers offer freebies to make the policy more alluring. Some provide the option of tagging on additional benefits to tailor the coverage to individual needs. Additional extras can include boarding kennel fees (payable if the owner is hospitalized), the costs of advertising and offering a reward if the pet goes missing, and even sometimes third party injury.


There are also specific policies out there aimed directly at certain customers. These policies can offer comprehensive protection against damage to rental dwellings, as well as some designed specifically for posh pooches. However, when comparing pet insurance, it is worth considering how likely you would be to use the extras on the policy.


There are also hidden catches to beware of with some policies that exclude a long list of conditions; pet insurance comparison is never straight forward. A common exclusion to check for is hereditary conditions, especially if your pet is a 'purebred/pedigree' (pick your term; they basically mean the same thing). Some insurers will not offer protection for certain conditions on breeds that have a known weakness. Others will automatically exclude genetic conditions and the many will exclude pre-existing illnesses. Another offering from some insurance companies to watch out for is supposed 'life long' policies where the premium increases as the animal ages; real lifetime insurance sets the premium levels at the outset. Be sure to compare the fine print for these details.


So the question remains, is pet insurance worth it, especially with the minefield of terms and conditions to pick through to find the right policy? The answer depends on one basic question: what would you do if something happened to your pet? 


Some pet-owners would be able to get their hands on sufficient funds should the unfortunate situation ever arise. For these individuals, the alternative approach of so-called 'self insuring' may be the right approach, rather than forking out a monthly premium for an insurance policy.


Many pet-owners feel they would be able to juggle their finances to deal with a chronic, long term illness, but could be manage a large, unexpected bill if their animal suddenly fell ill or had an accident. In these cases, the low-level policy may be sufficient, as it would cover immediate fees, but offers no longer term protection against ongoing costs.


Of course, all pet owners would like the peace of mind of knowing that their pet is covered for an unlimited amount, with minimal exclusions. The only way I have found to achieve this is by taking out a lifetime policy, but this comes at a higher cost. A growing number of families that wish to insure their dog's health in order to protect their own finances, are choosing alternatives that help to cover major, short term costs, while leaving them to cover regular healthcare or ongoing maintenance with their monthly income. 


The choice is yours. Protection is the ideal, but not necessarily available to all. I hope this information helps you sort through the fine print. Happy tails!