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Pet Insurance? Savings Account May Work As Well

As someone who has gone through a major, extended, and expensive illness with a much-loved pet, getting insurance for my animal companions has crossed my mind. The American Pet Products Manufacturers Association’s latest survey says 62 percent of American homes (roughly 71.4 million) include a pet, with veterinary care averaging between $12.09 million and $12.79 million annually.

In terms of covering those costs with insurance, however, Europe is well ahead of the U.S. For instance, in the United Kingdom, about 20% of pets are covered by a policy as compared to just 4% in the U.S. and Canada. In 2007, pet policies worth roughly $248 million were sold in this county, with average annual increases of 25-35% predicted for the genre.

As the policies become more available and more people look into the coverage for their four-legged (or other limbed) friends, prepare to be confused. To say that the policies vary widely by company, location, and species is a huge understatement. It’s nothing to see a premium range of $9.50 a month to $75.

This is definitely a situation when you want to get on the phone and talk to a person. Don’t rely on website information. Take notes and get everything in writing. Make sure you understand all potential exclusions and limits on payouts by specific condition or injury.

Some policies, for instance, won’t cover specific dog breeds, have age limits, or lower benefits for conditions that are either pre-existing or hereditary. (That’s a huge problem for pure breds.) Often the deductibles are so high, it’s just not worth it. Say $3,500 on an accident policy versus a $4,000 canine hip replacement.

Some industry pundits say owners are better off starting high-yield individual health care savings accounts for their pets when they’re young, with an eye toward increasing vet bills as the animal ages.

Owners who will go to any lengths to cover expenses, however, may still consider the insurance option, especially if the bills are going to mount in a long-term situation like cancer treatments. (In my case, I had to go to the bank and take out a loan, something I probably would no longer be able to do in this economy.)

Pet insurance is an evolving genre of coverage with few set standards. The policies may not have evolved to the point that the money would be well spent in your case. Many factors must be taken into consideration, including the likely longevity of the species with which you share your home. Insurance for a parrot that may well outlive you could be a better investment than premiums on a policy for a species with a life-span of five years or less.

Given the cost of veterinary care, especially for advanced treatments, pet insurance is a coverage product long overdue, just make sure you do all your homework before signing on the dotted line. Right now, simply putting money in a savings account for your furry (or feathered — or scaled) friend might be a better financial option.

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