Pet Insurance: Pros and Cons

Tasha Curti and her boyfriend Andy Kozak thought they left their seven-month-old puppy named Luna in good hands when they departed for a week-long beach vacation on the east coast in 2019.

When they returned to their San Diego, CA home, Kozak picked up their beloved chocolate Labrador Retriever from the caregiver’s home. He immediately noticed that the pup’s distended stomach.  He learned that the caretaker’s veterinarian friend had observed Luna when he visited and wanted her seen by a vet when her owners returned.

Kozak drove Luna straight to their vet hospital where they were immediately ushered through a crowded waiting room into an exam room. The attending vet suspected Luna had a heart issue and recommended an echocardiogram.

Thousands of dollars later, Kozak and Curt learned that Luna didn’t have a heart issue. She had a rare congenital condition, a liver shunt that cuts off blood from one of the vessels that leads into the liver. She needed surgery to save her life.

Kozak learned that Dr. Bill Culp of the University of California at Davis had performed liver shunt surgery for years. But the internationally renowned surgeon had a three-month waiting list. Luna’s vet had recommended Dr. Culp as a true expert for the intricate and specialized treatment the pup required.

The young couple opted to put Luna on medications, had her stomach drained of fluid several times, and fed her $400 a month canned, low protein diet as they waited for the surgery.

Just two months previous, Curtis and Kozak had decided to buy pet insurance. A friend, who had issues with her French Bulldogs, suggested that they sign up with Healthy Paws, the company she used and had received payment of claims.

The late twenties couple hesitated at first. They’d bought Luna as an eight-week-old puppy from Union Hill Labradors owned by Paul and Jeleen Guttenberg now of Peyton, CO. They’d been recommended by a dog show friend of Curtis’s mother.

After Luna had a couple of bouts of gastrointestinal issues by five months, Curtis and Kozak bought insurance from Healthy Paws for about $45 per month. The couple say that decision saved them nearly $15,000 because the insurance covered all the laboratory work, testing, diagnostics, surgery, abdominal draining, etc.

Kozak estimates that they spent an additional $8,000 for the numerous veterinary examination fees, prescription food, and travel expenses that weren’t covered by the Healthy Paws policy. The couple also paid the policy’s $250 deductible and the 20 % copay. Kozak drove Luna ten hours to Davis and then flew home to work during Luna’s initial recuperation after surgery. A week later, he returned to Davis when Luna was ready for the drive home to San Diego.

Dr. Culp successfully performed orthoscopic surgery on Luna who is now a happy two-year-old Lab that loves to hike and swim. Curti says Luna’s growth was stunted by her congenital condition. She says Luna’s legs are a bit shorter than anticipated, and she’s not quite as active as most Labradors her age.

Curtis, who works as a biotech field support person for engineers, and Kozak, a financial advisor, are grateful that Luna survived her ordeal, that Healthy Paws paid 80% of the covered expenses, and the Guttenbergs refunded their $1,800 purchase price to help defray medical costs. The Guttenbergs say they’d never bred a puppy with a liver shunt, either before or since Luna who appeared to look and act no differently than her littermates while she was with them.

Both Curtis and Kozak say they can’t recommend Healthy Paws enough!

Pet Insurance Considerations

Pet insurance was clearly the right choice for Curti and Kozak, but it may not be for everyone. We haven’t bought pet insurance and have gambled that our dogs’ medical bills will be less than insurance premiums over their lifetime.  Thankfully, our gamble has worked so far.

According to the North American Pet Health Insurance Association (NAPHIA), about twenty companies offer coverage.

NAPHIA reports that 2.82 million pets, including 2.3 million dogs, were insured at the end of 2019. It claims that pet insurance is increasing at an “average growth rate of 15.6 % from 2015-2019” for dogs.

Is pet insurance right for you? That depends. It’s expensive. Obviously, for Luna’s owners, it was worth every dollar. Pet insurance policies vary widely from one company to another as to coverage, exclusions, deductibles, and cost. Here are some considerations to ponder before deciding whether to buy a policy:

• Will knowing that your dog or dogs are insured give you peace of mind should the unthinkable happen?
• Is it best for you to pay a monthly premium to give you that peace of mind?
• Do you have the discipline to create and adequately fund your own emergency account for your dog’s medical needs?
• Can you afford to pay as you go potentially huge medical bills to avoid costly interest payments on bills and possibly expensive monthly insurance premiums?
• Do you own too many dogs to make insurance affordable?
• Should you insure a new puppy for a year or two given your breed’s behavior propensities, possible health issues, and perhaps congenital defects, which might manifest in a young dog?
• Have you considered opening up a CareCredit card to use interest-free for a set time to pay pet medical bills?

As you wade through insurance quotes and policies, ask these questions:

• What does the policy cover? Illnesses, accidents, and genetic diseases that your chosen breed is susceptible to? The unforeseen happens even with dogs purchased from reputable breeders who do all the requisite health testing of their dams and sires.
• Are vet visits for accidents and illnesses included?
• What is the waiting period(s) for coverage to begin? Watch for specific longer waiting periods for certain health conditions.
• Are pre-existing conditions excluded? What is a pre-existing condition?
• Does the policy exclude from coverage certain health conditions, such as hip dysplasia?
• Are preventative care such as annual exams and/or specialty examinations included?
• How is preventative care defined in the policy?
• Does the deductible apply annually or once for the diagnosed condition for the dog’s lifetime?
• What percentage of the covered costs will the company pay?
• Do you pay the bills first and then seek reimbursement from the insurance company? Or does your vet file a claim and then the insurance company pays the vet?

Rate/Policy Comparisons

For this article, I obtained quotes for a male Labrador puppy under a year of age and reviewed sample policies.

I noted that rates for mixed breeds are less expensive than purebreds. Some but not all companies adjust rates according to sex and/or breed. Pre-existing conditions are excluded, so insuring a puppy not only will afford more coverage but also is cheaper than insurance for an adult or older dog.

Coverage often excludes routine exams or preventative care, both of which may be covered for an additional fee. Deductibles also vary, sometimes from zero to $1,000.  Common deductibles are $200, $250 and $500. All of the reviewed policies had copays, usually between 10 to 30% depending on the plan.

Many policies excluded the costs of spaying or neutering. Some offered additional coverage for prescription food and rehabilitation modalities.

Some owners and breeders recommend these insurance companies: Embrace, Healthy Paws, Nationwide, Pets Best, and Trupanion. (Figo was also recommended but a sample policy wasn’t posted, so I just read the information on its website.)  Other owners or breeders were dissatisfied with some of these companies.

It’s very difficult to compare the cost of these companies’ policies because each vary significantly from one another. All appear to list waiting periods before the insurance is effective.  FIGO also has a six-month waiting period for “knee conditions.”

A monthly premium for an eight-week-old male Labrador ranged from $49 to $91 but the coverage varied greatly. The lower end of $49 to $58 was based on a $200 or $250 deductible, with 80 % coverage. The higher end was for 90% coverage with a $200 deductible.

Thirty-Day Free Insurance Offers

Barb Randle of Remington Labradors in Arvada CO, says she loves Trupanion’s Breeder Support Program because it offers her puppy buyers free, thirty-day insurance for their new wards. The puppy buyers must activate the coverage within twenty-four hours of picking up their puppy. The company declined to provide specifics of the insurance but noted that the coverage starts immediately upon activation, without any waiting period. This free insurance is available for puppies under twelve months of age. Breeders must sign up for the Breeder Support Program which also is free. https://trupanion.com/ec/breeder/interested

Randle says Trupanion also sends her “great age appropriate materials for guidence on health, developmental stages of puppies, travel, and training tips,” and sometimes goodies, such as puppy blankets, and bowls, which she gives to her puppy buyers.

The company sends breeders annual statistics of how many of their puppy buyers activated the thirty-day, free insurance as well as the number who continued coverage. Last year, not all of Randle’s puppy buyers signed up but five continued to insure their pup after the free period.

The American Kennel Club also offers free insurance for a month after a new owner registers his/her new puppy or adult dog. The coverage has a $100 deductible and a $500 incident limit. See: https://www.akcpetinsurance.com/certificate

Some breeders reportedly take out insurance to protect themselves from puppy lemon laws. Some state laws apply to sales from pet stores and breeders, and some only to pet stores. Breeders should make sure any policy they buy for puppies they intend to sell will transfer to the new owners. Some policies specifically exclude transfers.

Before you decide to buy an insurance policy, make sure your comfortable filing claims (if your veterinarian doesn’t) and dealing with an insurance company. If you decide to go the insurance route, check the company’s ratings and reviews about customer service and satisfaction of claims.

Carefully read each policy before you buy and understand its inclusions and exclusions. Then decide what works best for you and your beloved four-footed companion. Good luck!