Pets and Insurance

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Pets are like to children to many people. We had a few cats growing up, but the last one was Peter and we also had a dalmatian, Budweiser. They both died within a few months of each other and I was gutted. Those events have partly kept me from getting another pet because I don’t want to go through losing a loved one again. In any case, the reason I’m writing about this today is that I was doing some surfing/research on the differences between US online insurance sales and costs and Canadian online insurance sales and costs and I came across an article talking about the differences in how some people spend money on health-care with regards to their pets versus their children (US focused audience – for all our American readers you can check out their insurance quotes and let me know how they stack up).

You are more likely to go into debt for your kids than your pets

People, on average, are more likely to go into debt to treat their children than they are to go into debt to treat their pets. If people had the means to avoid debt, then the level of care secured might be more equitable. This is when pet insurance might make sense for people. If you are willing to do whatever it takes to treat your pet, but want to guard against a catastrophic loss (monetary), then you will definitely want to consider pet insurance.

The article provides some good points to consider if you are thinking about going down the route of pet insurance, such as exclusions based on breed/species of your pet, per-incident caps on benefits, multi-pet discounts, etc. It’s not enough to just get pet insurance if you think you need it, you need to check the fine print – especially as it’s easier to glaze over these kinds of details on decisions heavily influenced by emotions. But if the time comes, and your expectations are not met you’ll be doubly upset.

My opinion on insurance in general is that you should insure only against events that have the potential to ruin you. Buying that extended warranty on electronics doesn’t make sense to me. If you always buy that  insurance, I would bet that the total claims you make over your lifetime are less than your total costs. Of course, if you are a klutz, that might be a different story. But the point is, it would be an inconvenience if your iPod broke, but it wouldn’t mean you are now teetering on losing your house. If you lost your income, on the other hand, that will ruin you – so it’s imperative to have disability insurance.

With pet owners, I think they would be more inclined to seek more treatment if insured, but this is notwithstanding the quality of life issues to deal with.

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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Showing 19 comments
  • Big Cajun Man

    After having spent over $1500 on one cat one year, and about $1000 on a dog in vet bills, it SOUNDS like a good idea, however, in hindsight the animals should have been put down earlier (because I think they were in pain).

    Then there was the time I had to spend $75 on a hamster that eventually was euthanized (the hamster cost $5 to buy)… The little thing was having continual strokes …

    Pets are expensive! –c8j

  • Fan of Pet Insurance

    Pets can be expensive and they also can definitely get into things, that is why I think pet insurance is the way to go! I have pet insurance for my two year old boxer and I absolutely love it! It definitely helped out on some bills!

  • Former Employee

    I worked at a pet insurance company here in Canada. For every dollar pet owners paid to us, we paid 50 CENTS out in claims. The rest was 20-25 costs and remaining pure profit. Never buy plans that cover check-ups, they have the highest margin. Same with cats.

    If you are willing to pay $1000s of dollars for pet care in the case of an accident or illness, get the absolute cheapest monthly plan and put the rest into a separate monthly savings account or use the high interest credit cards that vets offer and take the risk. Consumer Reports says the same thing.

    One company even started calling pet owners, “pet PARENTS” to guilt them into buying insurance! They changed their name from petplan to petsecure now though. It is all about marketing and creating a need.

  • mike

    i was thinking of getting a pet but after reading this article i think i will hold off for a bit. thanks!!

  • Jason

    Some great ideas… especially from the former employee. I remember when we used to get a pet for free and get rid of it for free after it lived its healthy, long life.

  • karash

    please add my name for i-pod give away

  • Sam P

    Pet insurance can definitely be expensive but can save a lot of money should a pet require expensive surgery or other expensive procedure.

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