Is there a better alternative to pet insurance?

If your household is like 72.9 million people in the US, it is home to at least one pet. According to the 2011-2012 APPA National Pet Owners Survey, 62 percent of households in the US have at least one pet. It’s not hard to imagine why. Pets, whether they are furry, hoofed or winged, add so much to our lives. But, along with unconditional love and unquestioning devotion, they can also lead to significant veterinary bills. In fact, the APPA (American Pet Products Association) estimates that US pet owners will spend $14.1 billion on veterinary care in 2011.

Some pet owners opt for pet insurance as a method of reducing the costs of routine and emergency vet visits. However, Consumer Reports recently published a review of various pet insurance plans. The critics were not favourable. His basic conclusion: “Pet insurance is rarely worth the price…Only in rare cases, when a pet requires very expensive care, does the coverage pay for itself.”

Here are a couple of reasons why a pet insurance plan may not be your best option to save on your pet’s health care costs.

1. Lack of coverage
Most pet insurance companies promise to cover 70 to 90 percent of your pet’s veterinary costs. However, these companies have adopted much of the fine print used by large human health insurers: cumbersome claims processing, deductibles, reimbursement limits per visit, and limits per incident. They may also deny coverage for many common conditions, including those considered “race-inherent” and “pre-existing” conditions. As a result, your insurance rarely covers more than 50 percent of a pet’s annual medical costs. And since they charge between $400 and $1,100 for a policy, insurance typically costs the average pet owner much more than they save.

2. Low return on investment
In the aforementioned Consumer Reports review, they looked at lifetime vet bills for Roxy, a 10-year-old beagle in Dobbs Ferry, New York. The costs of nine different pet insurance policies were totaled, calculating how much would be paid in reimbursements. During Roxy’s 10 years, none of the policies Consumer Reports reviewed would have paid more than the cost of the plan. Even when treatments for various hypothetical serious ailments were added in, the average policy would have only saved Roxy’s family $65 over her lifetime.

Consumer Reports concludes: “We think most pet owners are better off ditching pet insurance.”

So what should pet owners do to help cover rising veterinary costs? Here are some alternatives to help:

1. Financial assistance
There are a number of financial assistance programs funded by grants and private donations. While each has different guidelines and requirements, your local shelter is a good place to start. Many shelters have up-to-date listings and information on funding opportunities.

2. Veterinary discount plans
Veterinary discount plans provide discounts on services from participating veterinarians, immediately reducing the amount you have to spend on routine and emergency care. In the Roxy Consumer Reports hypothetical case, the largest veterinary discount plan showed that the Roxy family saved nearly $2,500.

3. Start a pet savings plan
Open a savings account with a high interest rate that you can use as an emergency fund. If you save just $25 a month for 4-5 years, the compounded sum will cover almost any procedure.

Be creative! Combine a pet savings plan with a veterinary discount plan and a financial assistance plan. That’s something to brag about (meow, bark or squeak)!

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