I'm so Happy, I can't stand it!

Talk about a red-hot topic. Is pet health insurance necessary? Is it very helpful? Firstly, one of the things you need to know (especially if you are a first time pet owner), is when it comes to the costs of veterinary services, they can be very expensive. But, don’t run out and buy that policy just yet…

Your first step is to shop around. Do some research on the internet – visit various veterinary clinics and collect the various brochures that they have on display. You are going to need to commit to sitting down for a couple of hours to study this issue and take some notes which allows you to compare the benefits of each prospective plan. Also pay attention to those items that a company is NOT covering – things like chronic conditions (allergies, asthma, diabetes, etc.).

With this information summarized, now it’s time to analyze the data. Look carefully at the benefits verses the costs and start to think about what your true needs are. Now it’s time to look at some reviews on the internet – you are looking for the good, the bad and the ugly. People are usually pretty brutally honest about their opinions about things, so you should start to see who is good and who is better. Also, another good step is to find different forums that talk about pet insurance to interact with fellow pet owner more directly.

Okay, so you’ve narrowed things down. Before you sign anything, make sure you read the fine print. Look for decreasing coverage due to your kitty’s age. This is really boring stuff, but you really need to pay attention. The insurance company is protecting its own interests with that fine print, not yours.

In order to effectively tackle the difficult topic of pet insurance, we must take moment and look at insurance at a macro level.  As I was outlining this article, it became apparent to me that this is a HUGE topic, more than I realized at first.  So I must put a disclaimer in that I am not an insurance expert, but rather a consumer, just like most of you.  Much of this article and ones to follow on this topic are my opinion – I just want to give you facts as I understand them.

There are many types of insurance.  Health insurance, life insurance, funeral, unemployment insurance, disability insurance, flood insurance, house insurance, car insurance (and Pet Insurance).  The insurance industry is a multi billion dollar industry.

So what is the role of insurance in our lives?  The answer to that question will very from person to person and from policy to policy.  My mother took a fall in my garage a few years back and show broke several bones and also some dental work – a bridge.  Her health insurance plan took care of her medical expenses; however she was going to have to come out-of-pocket for the dental work, which was going to cost around $3,000 or so.  So what did I do?  I filed a claim against my homeowner’s policy and it paid her $1,000 – just so I could offset some of her costs.  Well, guess what, my insurance rates went up – way up – by 20% or so.  It would have been cheaper for my come out of pocket for the $1,000, in the long run.

I submit to you, that I used my insurance incorrectly, and now I’m paying for it – over the long haul.  For such a small claim, they had to interview me, interview my mother, spend a dozen hours on paperwork – it was expensive for them just to process that small claim.  And now they are recapturing that money, and more, each and every month.  And the worse part is I can’t switch insurance companies, because I have a mark on my record – I have to let 3 years pass without a claim.  Do I fault the insurance company?  No, not really.  The insurance company is a business that has to make a profit – I understand that.  My use of the insurance was not correct.

I believe that our general, societal misuse of insurance is a significant contributor to its high cost.  Health insurance, for example, costs companies and individuals huge dollars.  If you don’t believe me, ask your employer!  We use our health insurance for every sniffle, sneeze, cold, and headache.  The costs to process and pay those claims are very real.  Your $100 prescription, which you are getting for $10 co-pay, has some real costs associated with it.  There is the $100 for the drug, and then all of the overhead processing the claim.  The insurance company is a business and guess who they pass their costs back to – you guessed it – me and you.  So you see, we pay one way or another.

I submit that part of the way to bring insurance costs down is use it as disaster relief, not as way to compensate for a lack of savings.  But in order to use insurance this way, it’s going to take little bit of planning.  There is a real mental shift that has to take place here.  The evidence of what I’m suggesting to you can be seen by the way that insurance companies structure their policies.  Insurance companies charge varying amounts of money for policies and some of that cost is related to your deductible amount.  A higher deductible leads to lower premiums and a lower deductible leads to higher premiums.  There is a really mentality shift between the two extremes, isn’t there?  One says that I will use my own cash to pay for the regular, everyday claims, while I will have the insurance coverage ‘insure’ me against disaster. The other says that I don’t want to (or can’t) pay for much at all and I want to have the insurance company to take on that burden.

So what does all this boring detail have to do with Pet Insurance?  Plenty!  I’m working my way back to that.  In my next article, I’m going to start to make the parallels.

Pet Insurance
Pet Insurance

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