Should You Bite on Pet Health Insurance?

Is insuring your pet’s health worth it? Owners face hefty bills, and it pays to get help.

When pundits on TV talk about health care reform, they don’t jawbone about pet health care insurance. But maybe they should. Pet owners face huge bills when dealing with their pets’ health issues, and pet health insurance can help — that is, if you know how to get the best deal.

While the actual number of U.S. pet owners who spring for pet health insurance is small, its popularity is growing. According to the American Pet Products Association, about 3% of all dogs and 1% of all cats in the U.S. now have health insurance. Another review of the data from a research group called Packaged Facts says the rate of pet health insurance in the U.S. increased by 56% from 2003 to 2007.

Pet health insurance comprises a small percentage of the $47.7 billion Americans spend on their pets, but the cost of the pets themselves remain high. The APPA estimates the average annual costs of surgical veterinary visits to be $532 for dogs and $278 for cats. Overall, Americans spend $23.8 billion on veterinary care, in addition to purchasing over-the-counter pet medicine and supplies. The APPA also estimates that the cost of veterinary services has risen 80% since 2000.

Health care can cut into the high costs of caring for pets, especially as new technologies and new drugs raise the costs in the U.S. and abroad. Premiums on pet health care are all over the board, but pet owners can expect to pay monthly premiums between $10 and $100, with deductibles costing anywhere from $50 to $500. This is why it’s important to understand what insurance programs are available.

Structurally, pet health care plans mirror the health care plans of their human-related counterparts. They have annual premiums, deductibles and myriad health care plans to choose from. Most plans pay out for accidents and illness, but the more comprehensive (and pricier ones) also offer coverage for annual check-ups, prescription drugs and even surgeries for things like spaying or neutering.

There are some wrinkles unique to pet owners, which should be checked out before buying a policy. Here’s a look at some of the biggest “surprises” to look for when shopping for pet insurance:

Age limits. Most pet health care policies won’t cover newborn animals. They usually start offering coverage for pets when they’re between six and eight weeks old. On the other end of the spectrum, pet health insurance policies may not cover your animal for longer than an eight-year period. There may be exceptions, but by and large, pet insurers won’t take the risk of insuring an older pet.

Pre-existing health conditions. While restrictions vary among pet health care providers, don’t expect to get immediate coverage if you pet has a pre-existing health condition. Some providers allow coverage, but only after a waiting period than can last as long as one year. Others will simply not offer coverage at all for pre-existing conditions. It’s a good idea to get coverage when your pet is young, and presumably healthy.

Wellness packages. Your best bet is to talk with local veterinarians, but many pet care professionals offer discounts for health care if you participate in pet-based wellness programs. Such programs give you discounts for things like check-ups and vaccinations. Check out PetAssure.com, which offers discount packages (they don’t call it insurance) for up to 25% off on vet care visits and 50% off on pet supplies and services.

Pet insurance is growing in popularity, especially as more pet owners consider their pets to be members of the family. But with money tight, it’s imperative that you know the lay of the land, so you can make an informed decision that won’t ultimately cost you an arm and a leg.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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