6 Things to Know About Insuring Your Pets

It's increasingly common to get insurance coverage for our furry and feathered friends, but it can be costly, so learn the ropes before you pick a policy.

We do love our critters.

Americans spent $60.28 billion on their pets in 2015, and that spending was on track to be even higher in 2016, according to the American Pet Products Association.

Following food (which amounted to $23.05 billion) the next largest expense for pet owners was veterinary care ($15.42 billion) and supplies/over-the-counter medicines ($14.28 billion). It’s easy to see why vet bills are swelling, given the new, but costly, treatments that are becoming available. For example, pets are now routinely treated for cancer.

So it makes sense that the pet health insurance industry is also growing. More than 1.6 million pets were insured in the United States in 2015, continuing a six-year run of double-digit increases, according to the North American Pet Health Insurance Association.

Another reason for the growth is that pet insurance is now offered as a benefit by one-third of Fortune 500 companies, according to Consumer Reports. If you’re a pet owner at one of those companies, you’re in luck.

But if you’re like most people looking at coverage for your pet, and you are on the hook for the bill, here are things you need to know about pricing, and tips to limit the cost:

1. Pet insurance isn’t cheap

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This is especially true if you insure against illness as well as accidents. To get an idea, here are the 2015 pet insurance averages provided by the NAPHIA:

Dogs – average annual premiums

Accident only – $164

Accident and illness – $456

Cats – average annual premiums

Accident only – $136
Accident and illness – $316

Consumer Reports advises that you download sample policies from insurance websites and read them thoroughly for limitations, exceptions and co-payments.

2. Cost varies according to breed

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Among the most expensive breeds to insure are Rottweilers, Great Danes and Bernese mountain dogs — larger breeds that are genetically predisposed to costly conditions like cancer and hip dysplasia. Among the cheapest breeds to insure are Shih Tzus and poodles.

For example, for a $250-deductible policy for a Boston-based owner, pet insurer Trupanion told Bloomberg it would charge a monthly premium of about $66 for a male Great Dane puppy and about $39 per month for a Puggle, a cross between a beagle and a pug.

According to Trupanion, factors other than breed that go into the cost of insuring your dog:

  • Your dog’s age at enrollment
  • Gender
  • Where your dog lives
  • Whether your dog has been spayed/neutered

3. You may pay a deductible every time you see the vet

135Pixels / Shutterstock.com135Pixels / Shutterstock.com

Deductibles for human insurance policies are typically annual. Whether it requires one trip to the ER or 10 trips to the doctor, once your annual deductible is met, you’re no longer responsible for the cost of subsequent visits.

With some pet policies, however, the deductible applies to each condition being treated. For example, if your policy has a $250 deductible, you’ll pay the first $250 of the bill when your dog eats a sock, then another $250 weeks later when your cat scratches the dog in the eye. Be sure to ask the details before buying a policy.

Of course, as with other types of insurance, premiums are lower when deductibles are higher. Some insurers also reimburse flat amounts rather than a percentage.

ASPCA Pet Health Insurance suggests choosing not only your own deductible but your own reimbursement percentage, as the insurer offers 70 percent, 80 percent and 90 percent reimbursement options.

4. Premiums can rise annually

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The practice is legal for pet insurers and might be tied to the increasing likelihood of a pet developing an illness as the pet ages.

Premiums and premium hikes vary from state to state, according to Consumer Reports. The independent nonprofit reported in 2011 that Trupanion, which performed best overall in multiple pet insurance company comparisons, had raised its premiums an average of 52 percent in parts of California, and cited veterinary inflation and the scope of available treatments for the cost spike.

5. Don’t expect pre-existing conditions to be covered

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Since passage of the Affordable Care Act, human health insurance companies can no longer refuse to cover or charge more to cover pre-existing conditions. But pet insurers can — and most do.

According to Consumer Reports, all pet insurers exclude pre-existing conditions. They might also impose a maximum limit on treatment for individual conditions or on the yearly or lifetime reimbursement for those conditions. That’s something else human health insurance companies can no longer do.

6. Preventative care insurance is overpriced

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The premiums on policies that cover “wellness” care such as annual vaccines, check-ups and heartworm tests are typically more than twice the cost of premiums on policies limited to accidents and illness. For example, while the average policy covering accident and illness was $456.98 in 2013, the average cost of a policy that included wellness was $1,178.13.

A recent Consumer Reports article advises:

Consider skipping wellness coverage if possible and paying for it out of pocket. Last year routine vet care cost cat owners just $196 and dog owners only $235, according to the [APPA].

And if you decide against carrying any insurance for your pet, you can still guard against illness and accidents:

If you don’t want to pay for pet insurance, consider starting an emergency savings fund for pet care instead. If you find you need help with a big pet medical bill, the Humane Society has a list of organizations that may help pay for it.

For more on help getting care for your favorite critter, read: “How to Get Cheaper or Free Vet Care.”

Do you insure your pet? Do you think pet insurance is worth it? Share your thoughts in comments below or on our Facebook page.

Kari Huus contributed to this post.

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