Pet Insurance Shootout
- There are a lot of pet insurance companies but they are not all created equal.
- Pet insurance takes the financial anxiety out of pet ownership.
- Pet insurance plans are not designed to cover wellness visits (vaccines, flea meds, etc)
- Pet insurance should cover every disease, injury, illness, including dental disease, at a predictable reimbursement rate – not based on an arbitrary scale.
- Pet Plan is Coastal Animal Hospital’s 2014 Recommended Pet Insurance Company
Like most of you, insurance is not one of the most exciting topics for us. However, we have come to be big believers in the benefit of pet insurance over the years. Typically, during our new pet exams we make a blanket statement, such as, “Pet insurance is good. We recommend it.” However, given the explosion of new pet insurance companies, knowing which company to choose can be daunting and the cheapest plan is not always the best option. We set out to compare the various pet insurance companies and make the best recommendation for 2014. Needless to say, we were surprised at the wide variation in coverage and reimbursement rates.
Why is this important? We have become such proponents of pet insurance because we see the anxiety removed from pet ownership. When a pet comes in who is sick, the people who have pet insurance do not flinch to say, “do whatever it takes to make my pet better.” Think about the last time you were at an emergency clinic and they told you that your sick pet would need to be hospitalized and, oh yeah, here is an estimate for $3000. We just referred a pet to emergency to have a sock cut out of his stomach and that bill totaled over $5000. Did you just flinch? I did and I’m a vet. We are not trying to scare anyone, we just have seen this exact scenario play out a thousand times. No one expects it to happen to their animal until it does. The other scenario is the chronic problem – most commonly – skin allergies. If your pet develops skin allergies, you are going to be seeing us a lot to manage their allergies and those bills add up to a lot over time. If you have pet insurance before they develop those allergies, it will be covered for life (with a good company). If you get insurance after they get their first skin or ear infection, they may consider it a pre-existing condition and never cover anything related to the skin for the rest of their life – potentially costing you thousands of dollars. This is why getting insurance when they are still puppies and kittens is highly recommended.
So let’s talk about pet insurance and what it should cover. Pet insurance is designed to cover expenses that you can’t plan for. If your pet gets an upset stomach, has a cough, has a penchant for eating rocks, gets in to a dog or cat fight (and loses), dental infections (yes, it should cover those dental cleanings and extractions), or gets an ear infection, or a hot spot – these are all things that pet insurance covers. These are random occurrences that aren’t expected at any given time. Insurance should not cover the things that we can plan for – wellness exams, vaccines, flea medications, etc. The best analogy we came across is the car insurance analogy. Your car insurance doesn’t cover for gas, oil changes, tune ups, wiper replacements, etc. If it did, the premiums would increase and not provide you with a real extra benefit. There are plans out there that do offer to cover for the wellness side of pet ownership, but our cost analysis showed that the monthly premium did not seem to justify the expense.
In our comparison, we first had to narrow the field as there were obvious choices and non-starters that we had to filter. We automatically disqualified any company that had reimbursement schedules or limited coverage per incident (VPI is the worst offender of this). We wanted companies that did not exclude hereditary or congenital conditions. If they did not reimburse at least 90% of expenses minus the deductible, we excluded them. Surprisingly, this left only 3 companies – which was great because our job just got easier – but also disappointing that so many insurance companies are so limiting in what they reimburse. The final 3 companies were Trupanion, Pets Best, and Pet Plan.
Unfortunately, we had to disqualify Trupanion because not only do they not cover exam fees (which is a sneaky way to add an extra $50 to $200 deductible to each incident), they also have the highest rates of the 3 finalists. Sorry Trupanion, we like a lot of what you’re doing, but you’re out.
Which narrows the field to two. AND THE WINNER IS….
PET PLAN! Congratulations!
This was a hard decision because both companies are good, but Pet Plan definitely rose to the top and shined with their simplicity. They have very transparent, easy to understand plans that cover basically everything under the sun. There are no riders to obtain extra coverage for certain conditions such as cancer, etc. Plus, with the lowest premiums of the finalists, this really was a no-brainer. What really stood out for this company, over all of the others, is their dental coverage. Their liberal policy is to cover dentals if the veterinarian deems your pet to have developed periodontal disease. Since >80% of dogs over the age of 2 have periodontal disease, this is pretty broad. Which also leads me to remind everyone that pet insurance only works if you get it, and get it early! The younger the dog, the better because ear infections happen, periodontal disease happens, and diarrhea happens (I’ll refrain from the more colloquial version of that saying). Once it does, those can be excluded for a very long period of time, possibly forever – so sign up early.
In their plans, you have several options for maximum annual payout, deductible, and reimbursement rates. Let’s start with maximum annual payout. You have 3 options: Bronze, Silver, or Gold with maximum annual payouts of $10,000, 14,000, or 22,000. When we asked what percentage of animals ever exceed these limits, they let us know that at the 10,000 level, 99.927% of all dogs will have adequate coverage. At Silver, 99.979% of dogs will have coverage and at Gold 99.99% will have enough. So unless you are very, very unlucky, the Bronze level will be just fine for you and your pet. And remember, this is an annual limit, so it resets every year.
Next is the per-incident deductible. For young dogs (less than 2 years), we recommend getting a low deductible – $50 or $100. Young dogs tend to be in the hospital more with everything from skin infections to your kid’s science project stuck in their lower intestine. Having the flexibility to come in often with low deductibles tends to work out well for the dogs that need it (again, let me stress the importance of Murphy’s Law here. If you purchase pet insurance, you will probably never use it. But if you think your dog is perfect and doesn’t need it, guaranteed I’ll be seeing you and your new lab puppy every other Tuesday – and that’s my surgery day). Once your dog gets through the puppy stage and has proven themselves to be generally healthy, then consider lowering your premiums by increasing the deductible to $100 or $200 per incident if you like.
Finally, the last decision is the reimbursement. This is amount you will be responsible for once your deductible is met and the rest of the bill remains. There are three options: 80%, 90%, or 100%. Let’s look at this in real numbers. Let’s say the science project needs to be cut out of your pup somewhere between the mouth and the colon. The total bill is $2100. You have a $100 deductible. The remaining bill is $2000. If you select 80% reimbursement, you will be responsible for an additional $400. If you select 90%, you will be responsible for $200. And at 100% coverage, well, I’ll leave this one to you and a calculator to figure out. So, at first glance, the difference between 80% and 90% seems not to be much, but that 10% difference doubles the amount of money out of your pocket on the reimbursement. Hence, our recommendation is 90% coverage for all life stages (puppy through adult), and if 100% coverage is in your budget, go for it (especially as a puppy).
So that is all you need! We are not insurance adjustors. We are giving these recommendations based on what we see day in and day out at our practice. We see a lot of animals who are really sick who don’t get the care they need because people can’t afford it. And it kills us. We are not a pushy clinic. We are going to be pushy with this. Every pet needs insurance because it will take the strain off of the decision process between health and money. If you can’t afford the monthly premiums, what happens when your pet does gets sick? How will it be paid for then? This is the best way. Pay a little each month and rest assured that Murphy’s Law will kick in and you will never need it.