There is home insurance, car insurance, renters insurance, health insurance and life insurance but what about pet insurance? A lot of people think that pet insurance is a scam, but if we dig deep into the matter we can find scenarios where it could be beneficial. In today’s post, we will be looking further into pet insurance to see when it is worth it and when you should pass on it.
Before getting too ahead of myself, I want to preface this with a reminder. This is a topic regarding personal finance and your pets health. There is no clear right or wrong way, as long as you are making the decision from your personal standpoint and doing whats best for you and your pet then you are making the right decision.
Pet insurance, just like all other types of insurance, should be purchased as a form of risk mitigation. If the risk is large enough where it would put you under water, that is what insurance is meant to help hedge. However, if the risk isn’t detrimental to your situation, then insurance may not be necessary.
Lastly, it is your job as the owner of your pet to keep up with preventive care. Feed them quality food, ensure they get daily exercise (even in the winter!), weigh them monthly and always be on the look out for abnormal signs (behavioral or a physical bump/bulge).
When Pet Insurance Is Worth It
Prior to obtaining any sort of pet insurance policy, you need to ensure you are doing your research on the best options out there. A lot of insurance companies won’t cover pre-existing conditions, vet visits and some policies will even auto renew so that something being treated the past year will begins to count as a pre-existing condition.
There are a lot of bad pet insurance policies out there, but there are a few really great ones so makes sure to ask questions and read reviews from other customers before signing up.
How much are you willing to spend if your pet gets sick? If you don’t think you could afford emergency medical bills, but want to make sure that money is never an issue when it comes to ensuring your pets health. Then pet insurance is a good risk mitigation for you.
For example, say you have a perfectly healthy cat but all of a sudden your cat can’t walk and you have absolutely no idea why. You take your cat to vet and they need to do blood tests, x-rays and your cat has to stay overnight for further testing. This can quickly add up to a couple thousand dollars. Are you in the position where that wouldn’t hurt you financially.
Also, consider if something like that happens but from now on your cat needs reoccurring pet visits and expensive medicine. Can you cover these expenses or would these additional monthly costs put you in a bad spot?
Or, one of the worst stories I have heard, what if your cat gets run over by a car and needs emergency surgery. This surgery can cost upwards of $5k. Plus all the post operation costs like vet visits, medication, etc. Would you be able to cover that cost?
A lot of people believe that pet insurance is a scam but in these situations, it can seriously save you a lot of money and stress. Instead of paying these prices out of pocket, you would only be paying your deductible.
These are all scenarios that we weighted out while making our decision on whether or not we should purchase pet insurance for Jamie.
It’s also important to note that normally it is cheaper to get your pet insured when they are very young and keep the insurance for their entire lifespan.
When Pet Insurance Is Not Worth It
There are definitely a couple cases when pet insurance may not be worth the expense to your budget. For example, if you are making more than enough money and have enough income to put at least $5k aside solely for your pet’s benefit then I wouldn’t bother with insurance.
Even if something did come up over the $5k you have set aside, if you have the disposable income where you wouldn’t be phased financially then you would be fine not purchasing insurance.
Also, if you are qualified to take care of your pet if these worst case scenarios occurred, then again, it probably isn’t worth it since most of the time you would be able to help your pet all by yourself.
Pet Emergency Savings Account
This is a form of self-insurance; You are still mitigating the risk of an injury or emergency expense. Except instead of paying someone else every month, you are paying yourself. There are pros and cons to this method that we dig into below.
If you really don’t want to purchase pet insurance, but want to make sure money is never an issue. Then it would be wise to start setting aside money into a separate emergency fund specifically for your pet.
This is tricky because if you only put $50/month in this account, it is going to take a bit to grow into an amount that can act as a safety net. I would suggest putting at least $1k aside for your pet, if not more, to start. This gives you a better runway just in case something happens.
Especially since if you are only putting $50/month into the account, if something happens to your pet in the first year of you saving, there won’t be much money to help subdue the cost of bills.
However, the benefit of this is that if nothing bad ever happens to your pet (hopefully that is the case!) then this money still stays under your name and you aren’t giving it to an insurance company.
This is a bet you are making by self-insuring. Whether or not you have the means to cover a potential risk on your own.
Final Thoughts
Overall, pet insurance can be a great way to mitigate the financial risks of a medical emergency.. That said, if you can afford to pay a large medical bill then pet insurance may not be for you. I think one thing we can agree on is that we hope they never end up in the emergency room. đŸ™‚
Thanks for reading! Do you have pet insurance? What’s your stance on this topic? Let us know in the comments!
For more wicked reads, check out these articles below!
