Pet Insurance: Is it worth it?

Back in 2012, I read an op/ed piece in Wall Street's MarketWatch written by contributing author Jeanette Pavini that suggested pet insurance was a waste of money.

I wrote an article with an opposing opinion and was recently asked to update it. This is the 2017 version of the original Monday Medical post.
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First, despite Ms. Pavini's 2012 claims that per insurance isn't worth your hard-earned cash, there are an increasing number of affordable plans that begin as low as $4.56/month in the U.S. That coverage was estimated based on a 3 year old male cat with no preexisting conditions.

I also discovered something encouraging: that plan increased just 48¢/month since 2012, but the 2017 value is much higher.

In 2012, it only covered accidents. Today's policy covers accidents, illnesses, cancer, hereditary conditions, emergency visits, surgeries and prescription drugs.

Of course, with a policy that reasonable, you can expect high deductibles and a 30% copay. For this policy the deductible is $1,000, which translates to more of a catastrophic policy than an annual-use one. Still, when disaster hits, it's better to have a $1,000 bill than a $5,000 one.

Pet insurance helps Maxie hold onto his lone, last fang.

$4.56 a month.

That's less than half the price of a movie ticket these days. Have you seen what's playing on the big screen lately? Let's talk "waste of money," Ms. Pavini.

The 2012 Wall Street article also included a statement that inaccurately describes the coverage provided by most pet insurance companies. Here is the statement in question: "...with most plans, the premiums rise and coverage declines as your pet gets older—when they are more likely to need costly procedures."

This seems highly counter-intuitive. If that were truly the case, what person in their right mind would purchase it? In 2012, I accused Ms. Pavini of irresponsible journalism. Perhaps that was a bit harsh in today's politically-charged climate, so I'll just say that I wish she had done just ten minutes of research to back her claim before making that statement.

A bit of time spent searching several well-known U.S. insurance sites provided absolutely no evidence that coverage shrinks as a pet ages. So for this 2017 reboot, I revisited three of the top pet insurance companies in the U.S. to find if they had changed their positions since 2012.

Nope.

Pet insurance: protection that helps you weather the storm

Here's VPI's position: "Our coverage does not decline as a pet ages. As long as your pet is enrolled before age 10 and you keep your policy continually in force (translation: don't let it lapse or expire), we promise not to drop your pet."

Trupanion allows you to enroll your pet any time before your pet’s 14th birthday. Here is Trupanion's response to my query about the Wall street article when I contacted them in 2012: "Trupanion coverage does not decline as the pet ages. Perhaps they meant to say that coverage options (pre-enrollment only) decline?"

Quite possibly that's what the author meant. Because it is true that the cost to insure a pet increases as the pet ages. And the older the pet, the more potential exclusions there will be if you opt into coverage at a late date. It's the same with human insurance, as well. But if that's what the Wall Street article intended to say...it failed. The article certainly didn't leave one with that impression.

I also spoke with Laura Bennett, CEO of Embrace Pet Insurance, back in 2012, and her response is still valid 5 years later:

“I was really disappointed that the author of the article, Jeanette Pavini, based her opinion of pet insurance on one friend’s experience with one company.

"Regarding the example she provided, it is true that a few pet insurers exclude hereditary conditions and given a Bernese Mountain Dog is prone to hip dysplasia amongst other conditions, that might have been the surgery she mentioned that was not covered; however, there are a number of pet insurers that do cover hereditary conditions (Embrace and Petplan being two of them) and even some of those that have not covered them in the past are adding optional coverage for breed-specific issues now (such as VPI and ASPCA).

"I would love to discuss pet insurance with Ms Pavini just to show that pet insurance is not all the same and a high deductible policy to protect against large unexpected vet bills, just like her friend would have wished for, is worth getting.” 

Finally, I personally believe Ms. Pavini's logic is flawed. She recommended that, instead of pet insurance, a person would be better off starting a pet emergency savings account. While technically there is truth in her statement, a 2016 GO Banking Rates report stated that 69% of Americans have less than $1,000 in their savings accounts.

I fear the sticker shock of a veterinary emergency room bill may negatively impact the decision to seek care for the pet. Again, Laura Bennett:

"Budgeting is for predictable expenses; insurance is for unpredictable and financially impactful veterinary costs. Unless you are very wealthy, budgeting can never replace insurance if you would do whatever it takes to help the health of your pet in a veterinary health decision."

Having pet insurance may mean the difference between several more years of companionship or making that painful decision to euthanize. And call me crazy, but I see pet insurance as another way to cut down on the number of deaths at animal shelters in the U.S. annually.

Yes, some people, upon discovering their "beloved pet" has an expensive disease, will simply abandon it. I have seen it firsthand.

One of my previous cats, Ryker, was insured. A few months after he passed away, I went through 13 years of medical bills and insurance invoices. In the end, we came out ahead. Not by much, but we did end up spending less on our vet bills with insurance than we would have without.

All three of the Tonk's Tale cats are insured, and they will remain so. The peace of mind, if nothing else, is worth it.

And no, I was not compensated in any way for this post. I simply happen to believe that pet insurance is worth it.
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Postscript: Interestingly enough, there has been only one other article on pet insurance in Wall Street's MarketWatch since 2012. 

It was another op/ed piece, published in April of this year. This time, the author's opinion was favorable.

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Monday Medical Issues: Pet insurance - worth it?

Just a few weeks ago, on May 7, Wall Street's MarketWatch published an article written by contributing author Jeanette Pavini that suggested pet insurance was a waste of money.

We do not agree.

First, there are an increasing number of affordable plans that begin as low as $4.08/month in the U.S. (at the date of this publication) for accident coverage only.  That's less than half the price of a movie ticket these days. Excuse me? Have you seen what's playing on the big screen? Let's talk "waste of money" here.

Second, the Wall Street article included a statement that inaccurately describes the coverage provided by most pet insurance companies. Here is the statement in question:

"...with most plans, the premiums rise and coverage declines as your pet gets older—when they are more likely to need costly procedures."

This seems highly counter-intuitive. If that were truly the case, what person in their right mind would purchase it?  This is irresponsible journalism on the part of Ms. Pavini. A bit of time spent searching several well-known U.S. insurance sites provided absolutely no evidence whatsoever that coverage shrinks as a pet ages. [One wonders where Ms. Pavini did her research...?]

So I went to three of the top pet insurance companies in the U.S. and asked them, point blank, if they did this. The answer, in all three cases, was unequivocally NO.

VPI: "Our coverage does not decline as a pet ages. We will not drop a pet or reduce coverage simply because a pet is getting older."

Trupanion: "Trupanion coverage does not decline as the pet ages. Perhaps they meant to say that coverage options (pre-enrollment only) decline?"

Quite possibly that's what the author meant. Because it is true that the cost to insure a pet increases as the pet ages. And the older the pet, the more potential exclusions there will be if you opt into coverage at a late date. It's the same with human insurance, as well.  But if that's what the Wall Street article intended to say...it failed. The article certainly didn't leave one with that impression. In our opinion, Trupanion was being very kind and diplomatic to give the author an "out."

Then, at the recommendation of friend and artist Bz Tat, of Okey's Promise, I spoke with Laura Bennett, CEO of Embrace Pet Insurance, and Chairman of the Board of the North American Pet Health Insurance Association.

Bz Tat, who also worked for decades as a child and family therapist, has a well developed ability to take the measure of a person and is someone whose opinion I respect. So when she referred to Ms. Bennett as a person who runs her company in a very principled manner, I asked for an introduction.

I then asked Ms. Bennett if she thought pet insurance was a waste of money, and if she would like to respond to the Wall Street article.  Here is what she said:

“I was really disappointed that the author of the article, Jeanette Pavini, based her opinion of pet insurance on one friend’s experience with one company.

Regarding the example she provided, it is true that a few pet insurers exclude hereditary conditions and given a Bernese Mountain Dog is prone to hip dysplasia amongst other conditions, that might have been the surgery she mentioned that was not covered; however, there are a number of pet insurers that do cover hereditary conditions (Embrace and Petplan being two of them) and even some of those that have not covered them in the past are adding optional coverage for breed-specific issues now (such as VPI and ASPCA).

I would love to discuss pet insurance with Ms Pavini just to show that pet insurance is not all the same and a high deductible policy to protect against large unexpected vet bills, just like her friend would have wished for, is worth getting.”


Finally, I personally believe Ms. Pavini's logic is flawed. She recommended that, instead of pet insurance, a person would be better off starting a pet emergency savings account. You can never convince me that the average American household is going to set aside funds for a pet's health care, despite the advice of Ms. Pavini's MarketWatch recommendation. Even if they did, the sticker shock factor of the large volume of money required all at once for an injury/illness may negatively impact the decision to seek care for the pet.  Again, Laura Bennett:

"Budgeting is for predictable expenses; insurance is for unpredictable and financially impactful veterinary costs. Unless you are very wealthy, budgeting can never replace insurance if you would do whatever it takes to help the health of your pet in a veterinary health decision."

Ryker, after sonogram test for lymphona

Having pet insurance may mean the difference between several more years of companionship or making that painful decision to euthanize.

And -- call me crazy, but in a way, I see pet insurance as another way to cut down on the number of deaths at animal shelters in the U.S. annually. (Yes, some people, upon discovering their "beloved pet" has an expensive disease, will simply abandon it. Seen it firsthand.)


Ryker was insured. A few months after he passed away, I did the math. In the end, we came out ahead (not by much, but we did end up spending less on our vet bills with insurance than we would have without).

All three of our kitties are insured, and they will remain so. If nothing else, the peace of mind, for us, is worth it.

And no, I was not compensated in any way for this post. I simply happen to believe personally that pet insurance is worth it.