For many people, pets are more than companions or protectors. They’re beloved family members. Americans spend an estimated $147 billion a year annually on their furry friends — costs that have more than doubled in the past decade.
Pet insurance policies provide a way for pet owners to manage those costs, and the number of insurance companies that provide medical and wellness coverage to pet owners has increased in recent years. They offer coverage akin to health insurance at a variety of rates, depending on the type of plan you purchase.
“Pets are like our family,” says Brian Jorgensen, chief executive officer of MetLife Pet Insurance. Pet owners “want to keep them healthy and happy, but regardless of age or breed, they can experience accidents or diseases. When some of the really expensive things happen, it can be a bit of a nightmare.”
What does pet insurance cover?
Pet insurance mainly covers dogs and cats, although specialized plans cover reptiles, birds, small mammals and other exotic pets. There are three main types of coverage: accident-only, accident and illness, and wellness.
Accident and illness plans cover occurrences ranging from ingestion of a foreign object to cancer. Wellness coverage typically includes vaccines, annual checkups, dental care, nail trimmings, and flea, tick and heartworm medications. Pet owners can buy accident, illness and wellness coverage individually or bundled. Most policies don’t cover preexisting conditions, although some will include them if the condition is curable.
When shopping for pet insurance, consider your pet’s age, potential illnesses common with its breed and any preexisting conditions, says Janet Ruiz, a spokeswoman for the Insurance Information Institute. If you’re unsure what diseases are common, check with your veterinarian before selecting a provider.
Pet insurance vs a pet savings account
Many pet owners wonder whether the money spent on pet insurance premiums might be better spent on building up a pet savings account. Having a savings account just for pet costs is helpful.
It gives you a cushion to cover emergencies without messing up your budget. It’s your own money so you don’t have to worry about filing a claim, waiting for reimbursement or getting your claim denied. If you opt for a high yield savings account, it can even earn interest while you’re building it up.
With pet insurance premiums averaging as much as $56 per month, you’d have set aside over $670 in your first year if you put that cash into a savings account instead. But a single emergency can easily wipe out that balance – and if it’s an emergency that requires ongoing care like arthritis or diabetes, you’d need to spend far more than $56 per month to keep up with the care your pet needs.
Ultimately, the best option is to do both. Get pet insurance and budget to put some money aside each month into a dedicated pet savings account. Once you have a few thousand saved up in that account, you can reevaluate whether you want to keep your insurance. Though, it’s probably a good idea to keep it for the life of your pet.
