Is pet insurance worth the expense?

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Should You Spring for Pet Insurance

When George and Alison Morin brought home their newborn baby last month, they noticed their two-year-old pit-lab mix, Bruno, didn't seem to be feeling well.

"At first, we chalked it up to him being nervous about the baby," says Alison, a high school social studies teacher in New York City. "But once he threw up blood, we realized this isn't attention-seeking behavior."

Bruno was rushed to the vet, where he was diagnosed with hemorrhagic gastroenteritis, or HGE, a rare disorder. Bruno spent three nights at the vet's office, getting antibiotics intravenously and, afterward, eating a diet of prescription dog food for three weeks. The bill? Three thousand dollars.

But because the Morins had pet insurance, they ended up spending about $700. Not nothing, but welcome news nonetheless.

The idea behind pet insurance is unimpeachable: You pay a monthly premium so that if your pet gets sick and needs expensive health care, your insurance can kick in and help you pay the medical bills. But is it really worth your money?

The Morins certainly think so. The pet insurance also helped out last Thanksgiving weekend, when Bruno was attacked at a dog park.

"It was absolutely horrifying to watch this larger dog clamp down on my dog's head," says George, a public relations executive who adds that after he separated the animals, the other owner "leashed him up, led him out of the park and threw him in the back of his pickup truck without any acknowledgment that his dog had done anything wrong or to check if Bruno was all right."

Bruno was not. "He needed to be knocked out, got stitches, antibiotics, the whole nine yards," Allison says.

Still, as helpful as pet insurance can be, not every customer has become a convert. For instance, Julia Graham, who works in public relations in New York City, says that she and a roommate bought pet insurance a few years ago for their cat "and found it to be utterly useless and a waste of money."

If you're going to buy pet insurance, you may want to think through a few things first.

1. Pet health care is expensive, even with insurance. If you're thinking of pet insurance as a way to make all of those health care costs go away, you'll probably be sorely disappointed. But pet insurance can mitigate the financial damage.

The way Neely Raffellini, a Williston, Vermont, resident who runs a professional résumé writing service, thinks about pet insurance seems to be a good, realistic way to approach it. "I look at it as paying a little at a time or a lot all at once," she says.

She has a 4-year-old boxer and Boston terrier mix named Leo. She also had a 12-year-old boxer named Colt, who passed away in 2012. Leo is covered by pet insurance, and so was Colt. She says she currently pays $46.45 per month, which can be adjusted with a higher deductible (hers is $50).

So every year, Raffellini is spending $557 on pet insurance. Throughout Leo's first four years of life, that has equated to more than $2,000 in insurance. Anyone could argue this sum could have been better spent elsewhere. Except that earlier this year, Leo was injured by another dog at his day care and had to have surgery. The insurer still seems to be ahead so far, in this case. The bill was $623.44, and Raffellini received a check from the insurer for $467.54.

But in Colt's case, insurance definitely protected Raffellini from sticker shock. Colt, who had a brain tumor, was able to get an MRI, which cost $3,508.02, and the insurance paid $3,134.45. Of course, being an older dog, Raffellini says that Colt's insurance was far higher than Leo's. "But, again, it's a little at a time or a lot at once," she says.

2. Pre-existing and chronic conditions may not be covered. The reason Graham and her roommate hated their pet insurance was because the insurer always seemed to find a loophole as an excuse to not cover costs.

In August 2012, when Graham and her roommate took their cat to be examined, the vet looked at their pet's ear and jotted down some notes, including a potential diagnosis, writing: "mild mucopurulent discharge left ear (polyp)?"

In September of 2013, the vet removed what was a polyp, and their insurer pulled up the August 2012 medical statement and pointed to that as a reason to call it a pre-existing condition.

"It was nothing more than the vet writing down thoughts or a potential diagnosis ... Nevertheless, they concluded the condition was chronic and ongoing and thus, pre-existing," Graham says.

Barb Voller, a retired administrative assistant in Orlando, is also not a fan of pet insurance for similar reasons. Four years ago, she bought insurance for her two German Shepherds, both rescues from a shelter in Illinois, where she used to live. She was charged $12 per dog.

"Premiums did go up every year, as did my deductible. I was willing to pay that though, as I am a firm believer in insurance," Voller says. "When I added my daughter's dog, a Shiba Inu, I was paying about $56 a month for the three dogs."

But then one of Voller's dogs came down with pannus, an eye condition that eventually leads to blindness. Fortunately, there is medication that can control the condition. Unfortunately, it's expensive.

Voller's insurance paid for the $50 a month medication, but after that, the insurer informed her that it only pays for chronic conditions during the first year.

"So when my dog got an illness, they quit covering it," Voller says. "I thought getting insurance was to cover just such issues. I guess I was wrong."

Disillusioned, several months ago, she canceled insurance for all three dogs, which by now was running her $66.72 a month.

Research and compare. There are a lot of pet insurers: Trupanion, PetsBest, Petplan, Healthy Paws, Embrace Pet Insurance, Pets Best Insurance, PetFirst, VPI Pet Insurance and ASPCA Pet Health Insurance are just some of the big players in the pet insurance market.

Don't assume that they all work the same way. For instance, some pet insurers cover office visits; many don't. Some insurers will pay you a percentage of what the vet charges for an operation or procedure; others will pay a set fee, meaning that if the vet charges far more for, say, anesthesia, than what the insurer will pay for, you could still end up paying far more than you expected.

Don't even assume that the insurer will be exactly as advertised. You'd do well to pepper your insurer's customer service representative with questions before signing up, and if you don't get satisfactory answers, conclude that may be a red flag.

3. It's probably worth it if you would do anything for your pet. That's an unfair statement, of course. Plenty of people love their pets but truly can't pay thousands of dollars for surgery.

But if you can afford to pay thousands, or you would even if it means going deep into debt for years, then pet insurance is likely a worthy investment as a way to buffer you from a calamitous expense. Brittney Weinerth, an occupational therapist who owns a pediatric therapy center in San Jose, California, has a cautionary tale to consider.

About six years ago, after her golden retriever tore an anterior cruciate ligament and needed surgery, Weinerth got pet insurance.

"We paid around $600 a year," Weinerth says. "We used it here and there for some minor issues she had like an ear infection."

Eventually, the money began to feel like a waste, and after five years, Weinerth< canceled the insurance.

"When she turned 10, we discovered she had cancer in her leg which required surgical removal and radiation and simultaneously she tore her other ACL. For an entire year, she went through procedure after procedure, and the bills have really been outrageous," Weinerth says. "Six hundred a year seems like pennies now."

Copyright 2015 U.S. News & World Report

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