Financial Planner Take on Pet Insurance

Introduction

A Certified Financial Planner, CFP, recently wrote an article on pet insurance for Business Insider which you can read here. The TLDR version of the article is that you should consider what your are personally comfortable paying out of pocket for pet emergencies. If a vet bill of several thousand dollars makes you uncomfortable, consider pet insurance. I don’t disagree with that take. I am not a CFP, but I am a CPA and have done extensive research on pet insurance so my only additional observations are as follows:

• If you are rich or semi well off, you probably don’t need to mess with pet insurance. For example, if you end up paying $10,000 in vet bills for your dog’s broken leg and it doesn’t make you think twice, you don’t need to bother with insurance.
• If you are between jobs, have lower income, or a pet that you think is likely to have an accident, it is better to get pet insurance at least for major health events. If you cannot afford the potential vet bills, you do need to get some form of insurance. Veterinary clinics are not like hospitals and are under no obligation to perform emergency procedures if you can’t pay.
• If you’re doing somewhat well financially but still don’t feel comfortable absorbing a $10,000 vet bill, take a hybrid approach – purchase a stripped down version of insurance with a high deductible, minimal coverage or no coverage for small ticket items, and put the cost difference between a full comprehensive plan with all the bells and whistles and the stripped down version into a high yield savings account for vet costs.

Conclusion

We’re living in a world where veterinary costs are becoming prohibitively expensive for pet owners and finding ways to mitigate and prepare for those risks is becoming more necessary. There are many conditions that we would’ve put dogs down for a decade ago that we are now attempting surgery for and there is an expectation that if you love your pet you’ll get all necessary veterinary care to keep them alive. This is great but contributes to the overall increase in veterinary costs so you as the pet owner need to decide if pet insurance is right for you.