The Pros and Cons of Pet Insurance

Pet insurance has been popular in parts of Europe, Scandinavia and Great Britain for decades. Today, health care policies for pets are gaining traction in the United States. While this trend has given dog and cat owners plenty of options, the number of choices can be overwhelming for those who are shopping for a policy that offers broad coverage, limited exclusions and affordable premiums. Let's take a look at the pros and cons of pet insurance and what you should look for when insuring your furry friends.

How it Works
Pet health insurance isn't quite like coverage for people. Technically, it's more like a travel insurance policy where the policyholder submits a claim for reimbursement after paying for the treatment. Just like other insurance options, buyers should shop around, review policy details and understand what's covered and what's not. Use these tips to find the best coverage for your pet:

• Verify the carrier's qualifications with your state's insurance board
• Shop around to find the best policy and premiums
• Check to see if your employer offers optional pet coverage
• Read policies thoroughly and ask questions
• Inquire about multi-pet discounts
• Consider the benefits of establishing a savings account instead

Coverage
For pet owners, coverage is the most important concern. Unfortunately, there isn't one standard. Pet insurance is designed primarily for emergencies and catastrophic events. However, more providers cover routine veterinary care and preventive or elective treatments, such as vaccinations, spaying and neutering, heartworm medications, tick and flea prescriptions and dental care. Some policies even cover acupuncture, physical therapy and holistic treatments.

Cost
The cost of pet insurance varies as much as the coverage. Typically, a good policy will cover up to 90 percent of approved vet bills after the deductible is satisfied. You can also anticipate that your policy will have an annual cap on benefits. Depending on the provider, you might pay more to insure an older pet or a specific breed. Premiums will increase if you live in an area where veterinary costs are higher than average. Insurance companies also have different ways of handling renewals. Some companies increase premiums based on the pet's age while others offer constant rates that never increase as long as premiums are paid.

Exclusions
Ironically, some of the most common and expensive veterinary procedures aren't covered by the average pet insurance policy. Exclusions generally apply to pre-existing problems and chronic medical issues. A few providers cover hereditary conditions, such as hip dysplasia.

What You Need to Know
Veterinary costs are on the rise, and the number of treatments and diagnostic tools has expanded dramatically. In 2009, nearly 30 percent of pet-related expenditures went toward some $12 billion in veterinary care. Dogs are twice as likely to require emergency care as cats are, and puppies develop serious medical issues more often than adult dogs.

Pet insurance isn't cheap, but it's a good option if you're the type of person who would spend any amount to restore your pet's health. With pet insurance, you might pay more over the life of your pet, but the policy can prevent you from going into debt. You could also consider putting the money you would spend on premiums into a savings account. Weigh these pros and cons to find the best option for protecting your beloved pets.