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Posted: 10:50 a.m. Friday, Dec. 27, 2013

Is pet insurance worth the price?



By Theo Thimou, Director of Content

ClarkHoward.com


Thinking about getting a pet insurance policy? Read this before you do...

The pet insurance market is a booming industry that's growing by 25 percent per year. There is a quarter billion being paid in premiums annually! Yet is that growth really warranted?

Consumer Reports  ran an article that found pet insurance is not necessarily a wise investment unless your pet is older and goes to the vet a few times a year. But if you have younger animals, Consumer Reports recommends putting what you would pay for pet insurance into a savings account for future use.

People treat buying pet insurance policies like they would when they purchase an extended warranty on electronics equipment. They say, "Wow, I bought the insurance and then my dog needed medical care six months later. The insurance company paid tons of money that didn't have to come out of my pocket."

In fact, the argument is better made for pet insurance than extended warranties on your new TV or stereo. Less than five percent of electronics will break in the first few years. On the other hand, you know your animals will need medical care.

Just think carefully about their age and current health before you buy. Also watch out because the industry excludes many breeds from coverage. Ask your vet about which policies are best before buying. He or she will know firsthand from customer feedback.

If you are going to buy pet insurance, Consumer Reports suggests you pay attention to the following:

Read the fine print.  Know the limitations, cost-sharing, and service fees. What are your deductibles? What are your co-pays? Select coverage with simple, percentage-based payouts. Skip the stuf that relies on judgments of what's "reasonable."

Know the exclusions. Chronic diseases generally aren't covered, and insurers often won't pay for known defects among certain breeds. And of course, no insurer covers pre-existing conditions. Watch out for a maximum limit on treatment for individual illnesses too.

Skip the riders. Wellness care riders, as just one example, are deemed "generally not worth the price" by the magazine.

Take the highest deductible that makes sense. As with all insurance, a higher deductible will usually result in lower premiums for you.

Watch out for premium increases. Pet insurers raise rates based on the age of your pet, veterinary cost inflation, and the types of treatment that are potentially available for an illness.

For further reading: