We mentioned the topic of insurance for pets to a non pet-owner and he laughed and asked why would need such a thing and said it seemed absurd. We don’t think he would be laughing if he got stuck with a $3,000 vet bill. Concerns over the pet food recall are also promoting pet owners to take another look. In fact, it’s already a big business in Europe, with 19% of pets covered in the UK and almost 50% covered in Sweden.
With the rising costs of veterinary services, a lot of pet owners are wondering if they should get pet insurance and just how it works. Don’t worry, you’re not in the minority — according to the ASPCA, less than 2% of pets are insured. What is a pet owner supposed to do?
We talked to two pet insurance companies: VPI Pet Insurance, a company that has been insuring pets for 25 years and has 440,000 policyholders, and Embrace Pet Insurance, a relatively new pet insurance company with just a thousand policyholders that is providing different coverage options and offers more customizable plans. We also contacted PetCare insurance, but our request was not returned.
After the jump, you will find a comparison of each company and useful terms and definitions.
Pet Insurance Definitions:
- Pre-Existing Condition: Medical conditions that existed before the policy took effect.
- Congenital or Hereditary Condition: Medical conditions that existed before birth or were passed on from the biological parents — not you.
- Preventative Care: Annual check ups, exams and vaccinations.
- Deductible: The portion of any claim that is not covered by the insurance provider.
- Co-pay: A flat dollar amount paid for a medical service by the coverage holder.
VPI Pet Insurance:
VPI offers insurance for dogs, cats, birds and exotic pets. (Some examples of exotic pets that they cover are pot-bellied pigs, gerbils, ferrets, and iguanas. 83% of their policyholders are insuring dogs, 15% are insuring cats and 2% are insuring birds and exotic pets according to Brian Iannessa, VPI’s PR Supervisor.)
They promote two major plans: the VPI Superior Plan and the VPI Superior Plan plus Vaccination and Routine Coverage. The VPI Superior Plan protects pets from accidents, emergencies and illnesses. The Vaccination and Routine Coverage (VRC) supplement covers preventive care.
Congenital or hereditary conditions, like hip dysplaxia, are not covered under VPI’s insurance plan. Pre-existing conditions are also not covered. VPI’s insurance plans do cover drug or substance toxicity, so if a policyholder claimed vet bills due to a pet’s illness because of poison in tainted food, this would be covered.
Premiums are based on the species of a pet (dog, cat, bird, exotic pet), which plan that is selected, age of pet (older pets cost more to insure), and your location (prices vary slightly from state to state, about $1-$2 per month). The breed of your pet does not affect the price. Iannessa says that pet health insurance should not be viewed as an investment but more of a risk management tool to prepare pet owners for the unexpected. He also recommends that pet owners get insurance when pets are young to reduce to the risk of pre-existing conditions as the pet ages.
Embrace was launched in October 2006 “to modernize the pet insurance industry” by allowing pet parents to control and create their own policies. According to co-founders Alex Krooglik and Laura Bennett, Embrace gives pet owners a la carte options, so they can specifically customize and tailor their pet insurance plan to fit their budget. A pet owner can specify maximum cash outlay, deductible, co-pay, and optional coverage, so there are thousands of different combinations of plans. Currently, Embrace is not available in these three states: Oregon, Utah and Washington.
Premiums are calculated on where you live (since vet costs vary by your location, says Embrace), whether you have a cat or dog, your pet’s breed, your pet’s age and whether your pet is spayed or neutered. Embrace only covers cats and dogs at this point. Genetic conditions — including hip dysplaxia — are covered under all of Embrace’s pet insurance plans. Pre-existing conditions are not covered. Embrace has also processed a claim due to tainted food, so they will cover if policyholders have vet bills due to food poisoning.
Krooglik and Bennett both say that pet owners need to plan in advance. If you need pet insurance, it’s too late. When you buy insurance, you pass the risk on to someone else and you have the peace of mind that your pet can get the care that he needs and deserves without the need to make the hard choices based on finances.
Krooglik also offered some good tips of what to do with big vet bills if you have no pet insurance.
Here are ten questions that pet owners can ask when looking at pet insurance companies.
Ultimately, pet insurance is about making a decision that fits your life and a plan that is best suited for you, but it definitely is not a laughing matter.