Should You Insure Your Family Pet?

The least expensive policies run about $10 a month, with premium plans up to $50 a month or more. The cost of insurance increases as the coverage improves. That means you could easily spend up to $7,200 on premiums over your pet's lifetime.

How Pet Insurance Works

Is pet insurance worth the price? You need to weigh the cost of the insurance against the likelihood of submitting a claim. Pet insurance, like human health insurance, works best to cover unexpected and expensive situations. If your pet ends up hospitalized with a serious illness, coverage will be a godsend and can save you hundreds, if not thousands, of dollars. Pet health insurance is inexpensive compared to human health insurance.

There are two basic kinds of health plans. First, like human insurance plans, there are companies that pay a percentage of the charges after you pay a deductible first. Second, there are price-reduction plans that, for an annual fee, cover a small percentage of virtually any pet-related charges. Usually, the smaller the deductible, the higher the premium. As with human health insurance, the more expensive plans have higher limits.

Unlike human health insurance plans, though, pet insurance plans may have age restrictions, and there are limits to what a company will pay. Compared to human insurance, which offers a lifetime maximum of around $3 million, pet insurance offers a lifetime maximum of approximately $150,000. There are also per-incident limits and annual limits to what a company will pay out.

To Insure or Not to Insure

What do you think the odds are that your pet will have an accident or become ill? You need to carefully analyze your pet's lifestyle. Does it often get into fights with other dogs or cats, get into the garbage, have a tendency to eat nonfood items, or have a pet's family history of hip dysplasia, diabetes, or some other genetically predisposed condition?

When it comes to pet insurance, you can't decide on price alone, so arm yourself with knowledge to secure the insurance policy that's best for you and your pet. I recommend that you add up how much you spend a year on veterinary care for each pet and separate the costs into routine care versus accidents and/or illness. Develop estimates for one to five years and then see how expensive the premium would be for the same period and how much of your expenses the pet insurance policy would cover. You also need to consider the age of your cat or dog and their potential to have health problems. Usually, lower monthly premiums come with higher deductibles and/or larger co-payments.