May 13, 2006

why get pet insurance?

why do people get pet insurance? to insure themselves against financial ruin? most likely not. to protect a financial investment? don't check either. an article in today's new york times argues that people pet insurance to protect themselves from having to choose "economic euthanasia".
Vet Bills and the Priceless Pet: What's a Practical Owner to Do?

When Henry the cat began dragging his legs, his owner, Carol Kalinoski, suspected her 15-year-old pet's problem might be more serious than old age and arthritis.Steroids weren't helping, so her veterinarian suggested that they do a magnetic resonance imaging exam on his lower spine. The cost was $1,200. Ms. Kalinoski paid. The vet didn't learn enough from that and he advised Ms. Kalinoski of Alexandria, Va., to get a second M.R.I. at the nearby imaging center run by Iams, the pet food unit of Procter & Gamble. Imaging the entire spine would cost another $1,200, and Ms. Kalinoski paid again. The veterinarian spotted a tumor. Ms. Kalinoski was given a number of choices, including putting Henry to sleep or surgery that would cost $3,200.

What would you have done? Paid the money even though the cat was old and the surgery had only a 50 percent chance of success, or said, "It's a cat," and asked the vet to euthanize him, or wished you had bought pet insurance 10 years ago? Ms. Kalinoski, a consultant and regulatory lawyer, chose surgery. [...]

Veterinary care is not a trivial expense. Americans will spend about $9.4 billion this year on the health of their pets, according to the American Pet Products Manufacturers Association. Those bills are rising about 9 percent a year, almost three times the rate of inflation. [...]

Pet owners, though, often underestimate what they spend on their animals. James F. Wilson, a veterinarian based in Yardley, Pa., who often testifies in court on the value of an animal, said research completed this year puts the average lifetime cost of a medium-size dog at $10,400. A small dog will cost slightly less and a large one slightly more. Caring for a cat will cost an average of about $10,600. Dr. Wilson took his calculations a step further. He found that among people who have a strong bond with their pet — did you know 5.8 million pet owners celebrate their pets' birthdays? — the expenses more than double. For instance, he found dog owners spend more on treats than on food. He said that the cost of caring for a medium-size dog can go as high as $100,000 for those who make man's best friend their best friend. [...]

Is pet insurance any more defensible as a money saver? Probably not. A policy on a 2-year-old cat offered by VPI Pet Insurance, the nation's largest provider, carried a premium of $28.75 a month, or $345 a year. If the cat lives 18 years (not uncommon), 16 years of payments would add up to $5,136, or just about equal to what Dr. Wilson estimated as the high end of out-of-pocket health care costs for a cat. [...]

There may be another reason to buy pet insurance. "It is an easier decision if you make it with your heart and not your pocketbook," said VPI's spokesman, Brian Iannessa. "It makes pet owners feel better." And there you have it. The pet insurance is really human emotion insurance. It is there to protect you from choosing what Mr. Iannessa called "economic euthanasia."

But what does Ms. Kalinoski, Henry's owner, think of spending $5,600? "Would I do it again?" she asked. "Yes." Within weeks of his surgery, Henry was jumping off the furniture. She said, "You wouldn't have thought he was 15 years old."

i had pet insurance for two years, mainly because i was traveling quite a bit at the time, and i wanted the dog sitter to feel comfortable about taking the dog to the vet no matter what. if your dog is prone to running on the street or to fight with other dogs, it may not be such a bad idea to have part of the vet bills covered through insurance. i only bought the "minimum protection" policy, which at the time was around $10 per month. it provided coverage up to $2500 per incident, including accidental injuries and poisoning. it gave me peace of mind, and i was very glad (not disappointed) not to have to file a claim.

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