Is pet insurance worth it?

Many of the pet-related forums I read have been discussing an article from Consumer Reports that questions the value of pet insurance.  We decided about a year ago that it wasn’t worth it, and we decided to self-insure.  Here’s why…

We insured both of our greyhounds under VPI, and at first it didn’t seem too bad: around $25 per month per dog.  Then at their renewal dates, they raised one policy by 17%, and then the next policy by 21%.  At that point, we had not made a single claim, and we were paying about $65/month, or $800/yr.  So I decided to submit the vet bills of around $1,000 we had accumulated while we were paying insurance.

They reimbursed us $338.47 or about one-third of our actual expenses.  By the way, our submissions did NOT include meds or vaccines: only treatments by the vet for medical issues.

We didn’t have any confidence that the numbers would change much going forward, i.e., we would only get reimbursed for a fraction of the actual cost of medical care. So we put $10,000 into a rainy day account and canceled the insurance.  Here are the final numbers:

Insurance period: May 2007 through July 2010

$1,799.86       Premiums paid

$   956.07       Vet bills

($   338.47)    Insurance reimbursements

That’s our experience. What’s yours?

Posted in Pet Care Tales | Tags:
Is pet insurance worth it?
This post has 3 comments
  1. Kent Kruse says:

    The latest Consumer Reports article concluded, as I recall, that 90% of the pet health insurance policies were of questionable value. What CR failed to reveal, however, were the names of the companies providing the 10% of the policies that WERE of value. So the experience related above has at least two elements which may have resulted in a poor experience. The first is that more thorough research may have discovered a better company and/or plan than the one selected. There are 13 insurance companies to select from so this is no small task. A good policy should pay 80% of the medical expenses after the deductible is met. Secondly, keep in mind that insurance is NOT an investement. It is an expense designed to provide peace of mind in the event of a catastrophic illness or accident. Like automobile collision insurance, however, the best policy is one where premiums are paid, the availability of supplemental money is there, but the owner never has to file a claim. As an example, a car owner would never calculate collision insurance premiums over a period of time and compare that sum against benefits received and then conclude that collision insurance wasn’t worth the investment. Having said that, if a pet owner has $10,000 to put in a “rainy day account” and dedicate that account to pet related medical expenses PLUS re-imburse the account as money is withdrawn, pet health insurance is probably not a necessary expense.

    In the interest of full disclosure, I am a veterinarian and an executive with a major pet health insurance company.

  2. mark says:

    Thanks for that insight, Kent, and for the full disclosure. I think that the real purpose of any insurance (car, health, life) should be to cover catastrophic expenses that are beyond the means of the policy holder.

    It must be difficult to stand out if you are 1 of only 1 or 2 companies in a 13 company niche that actually provide reasonable value for the premium.

    Mark Leonard

  3. nancy says:

    We have insured all our dogs with VPI with good experience. We currently have 3 adult dogs, just seniors all.

    I have dropped the Wellness part of the plan as net/net, it was a $5 annual savings.

    But, we are ahead on all the catastrophic and surgical claims. On my Labrador Retriever, I sent in a claim for $300. They sent me a check for $500 because they included coverage on things I had missed. The annual premium for that dog is $200 because I insured her as a 12-week old puppy with a cancer rider.

    It is a standard plan with a $50 deductible. Their are maximum limits, but I believe it is worthwhile to insure my pets.

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