Is Pet Insurance Worth It?

Over the past year, one of my favorite podcasts has become the Money with Katie Podcast. It’s largely a personal finance podcast that covers a wide range of topics, from whether to rent or buy a house, to which credit cards offer the best rewards, or potential approaches to investments.

Her podcast is earnest, funny, and quite over the top at points. That’s probably part of the podcast’s draw as well. My ears especially perked up when I heard that she did a podcast on pet insurance, and whether it seems worth it or not. Her dog had some rather extreme health issues, and as she was navigating them, she began to think about whether pet insurance would’ve been useful if she had it at the time. She has a German Shepherd mix who started having health issues over the past couple of years, leading to around $9,000 in veterinary bills. She paid for all of these expenses out of pocket, but began to wonder if pet insurance would have been worth it in this case.

Is Pet insurance a scam, or really worth it?

This is an especially relevant issue for many of our goldendoodle and bernedoodle puppy families, because they want their dogs to flourish. Sadly, veterinary expenses can pop up from time to time, and they can be surprisingly expensive.

Here are some of the key takeaways for me from this podcast:

1. Having a Crystal Ball Is Ideal, but Impossible: As Katie said in a couple points on her podcast, it would be helpful to know the future in order to get pet insurance or not. However, since we can’t know the future, then we just gotta make the best call for us, understanding there’s gonna be risk either way. The question then become what kind of risk do we feel best about taking. Would we rather pay a particular fee that’s spread out over time in order to protect against a large bill in a short period of time. Katie did discuss the idea of keeping your deductible pretty high in order to lower your monthly premiums, and self insure on smaller items. However, things are always clearer in the rearview mirror. I think Katie does a good job and capturing this, where she uses her particular experience as a case study. Everyone’s experience can be quite different.

2. Insurance Plan’s Can Be Very Different: Katie used Embrace Insurance to run her case study. However, there’s less standardization in the pet insurance industry than within the human insurance industry. This can place a premium on understanding some of the deeper details of potential plans. Explore what they do cover, and what they don’t? How do the insurance’s claim process work? Are there particular fees that are different from plan to plan? Understanding some of these differences can really separate the wheat from the chaff.

   This also makes referrals pretty valuable. With so many providers on the market, talking to people who carry pet insurance can help you navigate the storm. Get a sense of how much the plan costs, and if it’s been a good and satisfying experience.

   There are is so much variation in this industry, so it’s important to understand potential differences.

3. Practical Tidbits: Here are a couple of Katie’s practical reflections on her pet insurance research and journey that might be helpful to you.

   1. Play with Coverage, Deductible, and Premium: You can typically insure your dog up to an unlimited amount on qualifying claims. However, if Katie insured up to the next lowest coverage point of $15,000, she would’ve save 30% in premiums and still covered her $9,000 of pet expenses. I think it’s rare - though far from impossible - to have vet bills which exceed this amount. I think lowering your coverage amount from unlimited could be a place to save a chunk of money.

   2. Consider Starting Coverage a Little Later: Similar to our insurance, older pets tend to cost insurance companies more than younger ones. In light of that, insurance premiums tend to be cheaper for younger puppies, and go up as they age. At the same time, younger dogs have a lower probability of large vet bills - although we all know that they still like swallowing socks. Katie found that the premium rates for Embrace began to hockey stick around the age of five. So one could potentially delay coverage for a few years to save money on the premiums, and then begin insurance coverage before the premiums really start to cut deep.

   3. Keep the Percentage Coverage High: Many plans allow you to choose what percentage to cover of an expense. Keep this percentage high, because this increased monthly expense will be offset by an expensive claim. This is the main reason of insurance right, to hedge against large expenses at a lower regular cost? So keep the coverage percentage high.

Bernedoodle Belle is Basking in the Glory of Her Health

So is pet insurance worth it? Like many complex issues in life, the answer is that it depends. As Katie wraps it up her situation’s review, she acknowledged that it would’ve saved her money and dispersed the cost over a longer window. Nonetheless, she still says she’s skeptical of pet insurance, and is unsure if she’ll start.

When thinking about pet insurance, the biggest question I’d ask myself is whether I can self-insure a large expense (like Katie’s $9,000).

Bernedoodle Puppy at the Vet’s Office.

Don’t worry; you’ll do great little guy!

This is a complex question with no clear answer and a vast array of choices and providers. We also love our bernedoodles and goldendoodles just like a member of our families, which can add even more anxiety to this choice.

I hope that this provides a little more insight and reflection as you think through this choice!

Let us know what you think!

Warmly,

Erin and Jay