Pet insurance can pay off over time

The Savage Truth

If you consider your dog or cat a member of the family, you are not a pet owner — you're a pet parent.

There's a vast difference, according to Robert Jackson, CEO of HealthyPaws.com, a pet insurance provider.

Jackson's company and others provide health and accident insurance benefits to people who would do anything to save their pets. But “anything” can be expensive. The costs of emergency surgery or a stay in intensive care could easily ring up a bill of $3,000 or more, as I recently learned when my Yorkie needed surgery.

Pet health insurance is not designed to cover the ordinary annual costs of owning a pet, such as vaccinations, health examinations and regular teeth cleaning, which, according to the American Pet Products Association, costs the average cat owner $196 and the average dog owner $233.

Should you consider buying health insurance for your pet? In recent years, it has become a far more respected product. Consumer Reports has studied the “best buys” of pet insurance, concluding that if you choose wisely, the odds are good that your policy will pay for itself at some point in your pet's life.

There are websites such as PetInsuranceReview.com that compare premium costs and coverages on pet health policies. Enter your pet's information and your email address to get quotes.

If you're thinking about getting pet medical insurance, here are five things you should know:

The cost of coverage depends on the age of the pet, the breed (there is a category for mixed breeds) and your zip code. An online calculator on HealthyPaws.com gives instant quotes. You can lower the premium by agreeing to pay a higher deductible or co-pay. A popular option is a $200 deductible with 80 percent coverage with a 20 percent co-pay.

For a small, young dog, that works out to about $25-$30 per month at HealthyPaws; that cost is automatically renewed on your credit card until you cancel. The ASPCA also offers pet insurance, and a comparable policy for a small, young dog is about $40 per month.

Not all costs are covered. Again, pet insurance is not meant for the ordinary annual costs of owning a pet. Annual heartworm tests and meds, shots and dental are not covered in most policies, but you are typically covered for expenses in case of an accident, emergency or illness — including cancer, hereditary and congenital conditions, surgery, diagnostic treatments, prescription drugs and a long list of other potential costs.

The costs of covered care are reimbursed. HealthyPaws.com has simplified the payment of claims with its own app. You can simply take a photo of the bill and upload it to submit your claim.

Coverage typically starts 15 days after the application is approved. You don't need to send in your pet's medical records until you file a claim. Then the company will quickly check with the vet and reimburse you for your costs, after you have satisfied the deductible and made the co-payment.

Buy insurance when your pet is young. Pets with pre-existing conditions cannot be covered, so it's best to buy when you first get your dog or cat. Also, while all breeds are covered, there is one major exclusion: A one-year waiting period for coverage for hip dysplasia for certain breeds such as German shepherds, prone to this condition. At HealthyPaws, you cannot purchase new coverage for this condition after the pet is 6 years old.

Is pet insurance worth the cost? That all depends on how healthy your fur friend is and how well you take care of him or her. But unlike paying for an extended warranty on an appliance that can be replaced if it really breaks down, the costs of a pet illness are unlimited and potentially very expensive. And, as I now know, that's The Savage Truth.

Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” She responds to questions on on her blog at TerrySavage.com.

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