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Sales are surging for pet insurance, especially among younger dog and cat owners. But whether it makes sense for you to insure your dog or cat depends a lot on your approach to pet ownership, as I know from first-hand experience.

Americans and Canadians insured two-and-a-half million pets in 2019, according to the North American Pet Health Insurance Association — an increase of nearly 18 percent over just the year before. “When I started out 20 years ago, it was very rare to have pet health insurance,” says Sarah Cutler, a veterinarian in Westchester, New York. “Now every time I have a new dog owner, they bring it up. It’s a standard question.”

The younger the pet owner, it seems, the more inclined they are to insure their pet. More than a third of Millennials (aged 24-38) have bought pet insurance, according to a Harris Poll conducted in the spring of 2020. That’s double the proportion of GenXers (aged 39-54) who have done so, and triple that of Boomers (aged 55-73).

This piece runs down the factors, financial and otherwise, that can affect your decision to buy or take a pass on insurance for a pet. It includes my own insights, based on having a policy cover more than $25,000 in medical costs for my late dog.

Pet health costs and coverage

The wisdom of buying pet health insurance depends partly on your finances, a little on the luck of your pet, and a good deal on your pet-ownership style and priorities.

Health insurance for the four-legged members of the family costs less than for humans, thankfully, but still isn’t cheap. Premiums average about $50 a month with Trupanion, one of Money’s top picks in pet insurers. As with human health insurance, there are extra costs and limitations.

Conditions that predate getting a pet insurance policy are not covered, for one thing. You also have to choose a deductible and a percentage of reimbursement; the higher the former and the lower the latter, the less the premium, as a rule.

Not every health expense is covered. The costs of routine care, such as vaccinations and teeth cleaning, are rarely reimbursed, at least without a policy add-on that increases your monthly premium. That omission, according to a study by the American Pet Products Association (APPA), means you’re liable to pay an annual average of $257 for routine care for a dog and $182 for a cat.

Health coverage provides the greatest benefit if and when your pet becomes ill. The same APPA study found the average pet owner spent $204 annually when a dog is sick; cat owners paid $244. Surgery is more expensive yet, especially for dogs, for which owners whose pooch required it paid an annual average of $474. Annual bills for cat surgery averaged $245.

But those are only averages, of course, and some people can face bills that are far higher. I was one of those pet owners. We adopted our beloved St. Bernard when she was a year old and insured her over the course of her life. She came down with urethral cancer at age nine and died a year-and-a-half later.

Total cost of her cancer care: a whopping $28,000. The total amount that insurance paid was $25,000, since we had a plan that paid us 90% of the bills and a $250 deductible. Total cost to us: $3,000 in copays, plus perhaps $4,500 in premiums, including the deductible. We got an extra 18 months with our dog and she got more time to nap in the sun, cuddle on the couch, and referee disputes between our house cats. Perhaps best of all, we had the chance to do what we and our vets thought was best for our dog, without worrying too much about how much it would cost.

Weighing pet insurance

My own case was exceptional. Few pet owners will face five-figure vet bills or be willing or able to make a $7,500 contribution to the cost of care. And even if they were in a position to pay, they might consider that sum too much to spend to prolong the life of a nine-year-old dog, especially given that St. Bernards as a breed have a life expectancy between eight and ten years.

But because the payoff from pet insurance is so focused on treating serious illness or accidents, deciding whether or not to insure a pet requires considering your willingness to extend the life of their companion. The more you’re prepared to go to any lengths in those efforts, the more worthwhile insurance may be for you.

That calculation is in part financial. “Most people want to do everything they can for their pets, but some of that comes down to everything they can within their financial constraints,” says Alison Skala, a veterinarian in Columbus, Ohio. A survey done in 2015 by veterinary trade magazine dvm360 found that most clients refused or stopped treatment for a pet when the bill reached just over $1,400.

Yet there’s also a component that’s emotional, even philosophical, involving your willingness to keep a pet that’s very ill, and perhaps very old as well. “There’s a spectrum,” says Alison Skala, a veterinarian in Columbus, Ohio. “Some people are willing to do everything for a pet, and some people are not.”.

Absent frequent pet illnesses or accidents, from colliding with a car to eating the family's winter woolens, the economics of pet insurance may not make sense for many people. The accumulated cost of premiums over the years can easily run into the thousands of dollars and, in the end, those premiums will very likely total more than the price of a pet’s lifetime care.

On the other hand, if you’re more inclined than most people to prolong your pet’s life, even through serious illness, insurance allows you to pay a manageable monthly premium and avoid the possibility, if remote, of prohibitively large vets' bills. Alternatively, having insurance could let you avoid an emotionally painful decision to decline expensive but affordable treatment for your pet because you'd struggle to justify it financially.

When you buy pet health insurance, you’re mostly purchasing, at a high cumulative cost, the knowledge that you won’t face a big veterinary cost on your own. For me, that was a worthwhile investment, but it may not be so for all pet owners.


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