With vet bills soaring and fancy new treatments available, it's an option more owners are considering. Plus, eight ways to cut the cost of keeping a healthy pet.
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By Liz Pulliam Weston
A few years ago, pet insurance would have ranked right up there with policies on children and dread disease coverage on my list of insurance you don't need to buy.
Now I'm not so sure.
I still believe most people are better off forgoing the policies and instead putting the money they would spend on premiums into a savings account. Pet insurance can cost $2,000 to $6,000 over the life of an average pet, and the chances are slim you'd ever have to shell out that much for treatments.
But if you're the type of person who would do anything to save your pet, including spend thousands of dollars on medical treatments, pet insurance might be a preferable alternative to going into debt.
New tests, treatments, monstrous bills
What's changed in recent years is the state of veterinary science, as well as the economics of running a veterinary practice. Vets today can offer treatments that were unheard of just a few years ago -- and at prices that could make you howl. Consider:
o Treatments once reserved for humans, from radiation therapy to kidney transplants, are currently available for pets. That means once-fatal conditions are now treatable at costs ranging from $1,000 to $5,000 or more.
o Vets have access to increasingly sophisticated and costly diagnostic tools such as MRIs. Such screenings not only boost the cost of exams but often detect problems that once would have gone unnoticed, and untreated.
o These expensive tools and procedures have helped create health-care inflation in the pet doctor world.
That inflation has helped fuel a significant rise in the pet insurance industry. American Demographics magazine estimates that 5% of American pet owners have the insurance, up from less than 1% in 1995. Insurers have teamed with the American Kennel Club and Petco Animal Supplies to offer the insurance, while several major employers now provide the coverage as an optional employee benefit.
Deductibles, exclusions and surcharges
The oldest company, Veterinary Pet Insurance, has seen its revenues climb at a 40% annual rate since 1997 -- the year it finally broke even after 15 straight years of losses, according to founder Jack Stephens. VPI, which has about 85% of the pet insurance market, had gross sales of $110 million in 2005.
Pet insurance is far from a cure-all, though:
* The policies typically have deductibles, co-pays and caps that limit how much will be paid out annually.
* Pre-existing problems and hereditary conditions, such as hip dysplasia in German shepherds and retrievers, are normally excluded.
* The older your animal, the more you'll have to shell out in premiums. Some insurers don't cover pets older than 9, while others levy a stiff surcharge.
* Industry leader Veterinary Pet Insurance offers two levels of coverage that pay 50% to 90% of covered treatment costs after a $50 deductible. Here's how the numbers work out.
Premiums and coverage for pet insuranceItem Standard plan Superior plan
Deductible
$50
$50
Co-pay*
10% to 50%
10% to 50%
Cap per accident/illness
$2,500
$4,500
Annual cap
$9,000
$14,000
Kitten premium**
$93
$162
Mature dog premium***
$254
$471
Adult cat****
$94
$164
Adult dog*****
$134
$239
*The co-pay varies by condition, level of coverage and vet costs in your area. The standard plan pays $780 for removing a foreign object from an animal’s intestines; the Superior plan pays $1,363. *Kitten premium: Annual premium for a domestic shorthair less than a year old living in Los Angeles. ***Mature dog premium: Annual premium for an 8-year-old Labrador retriever living in Los Angeles. ****3-year-old adult cat in Seattle. *****3-year-old adult mixed-breed in Seattle.
Source: Veterinary Pet Insurance
Since insurance is best used as protection against catastrophic expenses -- not those you could easily pay out of pocket -- the question becomes: How deep in the hole would you go for your pet? And then could you afford to pay those costs yourself?
Pet insurance is a nonstarter for many pet owners, simply because they take a pragmatic approach to their animals. If the cost of treatment got too high, they would choose to put the animal to sleep.
"About half see the pet as disposable. If it got really ill they just wouldn't treat it," said Stephens, whose company conducted research on the issue. The other half "were willing to treat, whatever it took."
Going the distance for Fluffy
If you're in the latter category and you don't have sufficient savings to cover the treatments, you might consider pet insurance. But do your homework before you buy:
Shop around. Policies and premiums can vary widely. Note not just the monthly or annual cost but the differences in deductibles, co-pays and caps, which may limit payouts by incident, annually or the animal's lifetime. Ask whether the insurer offers discounts for insuring multiple pets. Some of the companies to check include:
* PetCare Pet Insurance, (866) 373-7387
* Petshealth Care Plan, (800) 807-6724
* Veterinary Pet Insurance, (800) 872-7387
Check with state insurance department. Like human health insurers, pet insurers should be registered with your state regulators.
Scrutinize the policy and understand the exclusions. Remember, the conditions most likely to afflict your pet are often the ones most likely to be excluded from your policy.
Beef up your savings. A Consumer Reports analysis found that pet owners with insurance may actually spend more over time on their animals than those without.
8 ways to keep overall pet costs low
Whether or not you opt for pet insurance, you can help control how much your animal costs you. Here are some other ways you can trim vet bills:
Use low-cost clinics for shots. Your vet may host one or two such clinics each year, or you can call your local Humane Society, animal control department or veterinary hospital for leads.
Get second opinions. You'll have time, with most conditions, to consult another vet before committing to expensive treatments or drugs. You also can consult The Merck Veterinary Manual online for a rundown on your pet's condition and recommended treatments.
Ask for samples. Your vet may have free starter packets of many popular medications. It doesn't hurt to ask.
Shop around for meds. You can call around to other vets, check out pet catalogs or search the Internet. Discountpetmedicines.com has links to sites that offer lower-priced medications.
Don't cheap out on pet food. An investment in better-quality food can pay off in fewer health problems, particularly with cats, which can be more susceptible to urinary tract infections if fed inexpensive cat food. Check with your vet.
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Keep their weight down. Just as with people, obesity in animals can trigger more health problems.
Keep your pet indoors or on a leash. Free-running animals have more accidents, contract more illnesses and take a bigger toll on the environment than pets that are kept under control. (In other words, Fluffy will live a longer, healthier life indoors, and the songbirds of the neighborhood will thank you.)
Consider a cat -- or a mutt. Next time you're in the market for a pet, remember that dogs tend to wind up in the vet's office twice as often as cats, and that purebreds tend to have far more hereditary weaknesses than your average pound puppy.
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.
advertisement
Article Tools
* E-mail to a friend
* Tools Index
* Print-friendly version
* Site Map
* Discuss in a Message Board
* Article Index
By Liz Pulliam Weston
A few years ago, pet insurance would have ranked right up there with policies on children and dread disease coverage on my list of insurance you don't need to buy.
Now I'm not so sure.
I still believe most people are better off forgoing the policies and instead putting the money they would spend on premiums into a savings account. Pet insurance can cost $2,000 to $6,000 over the life of an average pet, and the chances are slim you'd ever have to shell out that much for treatments.
But if you're the type of person who would do anything to save your pet, including spend thousands of dollars on medical treatments, pet insurance might be a preferable alternative to going into debt.
New tests, treatments, monstrous bills
What's changed in recent years is the state of veterinary science, as well as the economics of running a veterinary practice. Vets today can offer treatments that were unheard of just a few years ago -- and at prices that could make you howl. Consider:
o Treatments once reserved for humans, from radiation therapy to kidney transplants, are currently available for pets. That means once-fatal conditions are now treatable at costs ranging from $1,000 to $5,000 or more.
o Vets have access to increasingly sophisticated and costly diagnostic tools such as MRIs. Such screenings not only boost the cost of exams but often detect problems that once would have gone unnoticed, and untreated.
o These expensive tools and procedures have helped create health-care inflation in the pet doctor world.
That inflation has helped fuel a significant rise in the pet insurance industry. American Demographics magazine estimates that 5% of American pet owners have the insurance, up from less than 1% in 1995. Insurers have teamed with the American Kennel Club and Petco Animal Supplies to offer the insurance, while several major employers now provide the coverage as an optional employee benefit.
Deductibles, exclusions and surcharges
The oldest company, Veterinary Pet Insurance, has seen its revenues climb at a 40% annual rate since 1997 -- the year it finally broke even after 15 straight years of losses, according to founder Jack Stephens. VPI, which has about 85% of the pet insurance market, had gross sales of $110 million in 2005.
Pet insurance is far from a cure-all, though:
* The policies typically have deductibles, co-pays and caps that limit how much will be paid out annually.
* Pre-existing problems and hereditary conditions, such as hip dysplasia in German shepherds and retrievers, are normally excluded.
* The older your animal, the more you'll have to shell out in premiums. Some insurers don't cover pets older than 9, while others levy a stiff surcharge.
* Industry leader Veterinary Pet Insurance offers two levels of coverage that pay 50% to 90% of covered treatment costs after a $50 deductible. Here's how the numbers work out.
Premiums and coverage for pet insuranceItem Standard plan Superior plan
Deductible
$50
$50
Co-pay*
10% to 50%
10% to 50%
Cap per accident/illness
$2,500
$4,500
Annual cap
$9,000
$14,000
Kitten premium**
$93
$162
Mature dog premium***
$254
$471
Adult cat****
$94
$164
Adult dog*****
$134
$239
*The co-pay varies by condition, level of coverage and vet costs in your area. The standard plan pays $780 for removing a foreign object from an animal’s intestines; the Superior plan pays $1,363. *Kitten premium: Annual premium for a domestic shorthair less than a year old living in Los Angeles. ***Mature dog premium: Annual premium for an 8-year-old Labrador retriever living in Los Angeles. ****3-year-old adult cat in Seattle. *****3-year-old adult mixed-breed in Seattle.
Source: Veterinary Pet Insurance
Since insurance is best used as protection against catastrophic expenses -- not those you could easily pay out of pocket -- the question becomes: How deep in the hole would you go for your pet? And then could you afford to pay those costs yourself?
Pet insurance is a nonstarter for many pet owners, simply because they take a pragmatic approach to their animals. If the cost of treatment got too high, they would choose to put the animal to sleep.
"About half see the pet as disposable. If it got really ill they just wouldn't treat it," said Stephens, whose company conducted research on the issue. The other half "were willing to treat, whatever it took."
Going the distance for Fluffy
If you're in the latter category and you don't have sufficient savings to cover the treatments, you might consider pet insurance. But do your homework before you buy:
Shop around. Policies and premiums can vary widely. Note not just the monthly or annual cost but the differences in deductibles, co-pays and caps, which may limit payouts by incident, annually or the animal's lifetime. Ask whether the insurer offers discounts for insuring multiple pets. Some of the companies to check include:
* PetCare Pet Insurance, (866) 373-7387
* Petshealth Care Plan, (800) 807-6724
* Veterinary Pet Insurance, (800) 872-7387
Check with state insurance department. Like human health insurers, pet insurers should be registered with your state regulators.
Scrutinize the policy and understand the exclusions. Remember, the conditions most likely to afflict your pet are often the ones most likely to be excluded from your policy.
Beef up your savings. A Consumer Reports analysis found that pet owners with insurance may actually spend more over time on their animals than those without.
8 ways to keep overall pet costs low
Whether or not you opt for pet insurance, you can help control how much your animal costs you. Here are some other ways you can trim vet bills:
Use low-cost clinics for shots. Your vet may host one or two such clinics each year, or you can call your local Humane Society, animal control department or veterinary hospital for leads.
Get second opinions. You'll have time, with most conditions, to consult another vet before committing to expensive treatments or drugs. You also can consult The Merck Veterinary Manual online for a rundown on your pet's condition and recommended treatments.
Ask for samples. Your vet may have free starter packets of many popular medications. It doesn't hurt to ask.
Shop around for meds. You can call around to other vets, check out pet catalogs or search the Internet. Discountpetmedicines.com has links to sites that offer lower-priced medications.
Don't cheap out on pet food. An investment in better-quality food can pay off in fewer health problems, particularly with cats, which can be more susceptible to urinary tract infections if fed inexpensive cat food. Check with your vet.
Get the latest from Liz Pulliam Weston. Sign up to receive her free weekly newsletter.
Preferred format:
HTMLPlain Text
Learn more about newsletters
Keep their weight down. Just as with people, obesity in animals can trigger more health problems.
Keep your pet indoors or on a leash. Free-running animals have more accidents, contract more illnesses and take a bigger toll on the environment than pets that are kept under control. (In other words, Fluffy will live a longer, healthier life indoors, and the songbirds of the neighborhood will thank you.)
Consider a cat -- or a mutt. Next time you're in the market for a pet, remember that dogs tend to wind up in the vet's office twice as often as cats, and that purebreds tend to have far more hereditary weaknesses than your average pound puppy.
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.
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