is pet insurance, a scam I spent like nine thousand dollars on my dog in the last few months and the entire time I kept wondering would pet insurance have helped this situation. According to a Market Watch survey, approximately 45 of pet owners have pet insurance, but it’s not always a straightforward decision and after doing some research, I’ve zeroed in on a few things that might make your decision just a little bit easier. So, let’s get into it, because my dog’s health problems were pretty extreme and happened in pretty quick succession. I figured that the costs I would have saved by having pet insurance would have also been extreme, but it turns out they really weren’t. First, I’m gonna request a quote from Embrace pet insurance for my dog Georgia, as though she were just a 6 to 12 month puppy with no pre-existing conditions.
This is going to help us get the best rate, so I’m going to navigate to their page and, as you can see, they’re trying to steer me toward their 50 a month most popular plan, which is already raising some red flags for me, because, typically, when the Ux is trying to push you in One Direction: it’s because that plan is actually more profitable for them. So this 50, a month plan, is going to get me a five thousand dollar annual reimbursement limit, a 70 reimbursement rate and a 750 annual deductible. So in layman’s terms, this means you’re going to pay about 50 a month for the plan you’ll be responsible for the first 750 in expenses each year and then they’d reimburse up to seventy percent of each accepted claim that part’s important accepted up to five thousand dollars Per year total, so we’re gon na play around with those limits. We’Re gon na try to figure out what the optimal plan is, but before we do, I’m gon na create a plan that I actually probably would have done at the time. Had we gotten Insurance just to see how things would have played out differently.
So I’m going to choose the unlimited annual reimbursement, I’m gon na pick a thousand dollar deductible, because I know that that’s going to help lower my premiums and I’m gon na choose a 90 reimbursement rate instead of seventy percent. That way, it’ll cover ninety percent of each accepted claim after I spend a thousand dollars every year now. This plan for baby beans would have cost me about 88 dollars per month, which means that by the time she got sick we already would have spent five thousand. Sixteen dollars in premiums – and it appears we would have hit our thousand dollar deductible in October 2022 and then the insurance would have started kicking in at 90 coverage. So, if you’re keeping track that means in Insurance World by October 2022, we are six thousand sixteen dollars in the hole and then the rest of the charges in 2022 amounted to about thirty nine hundred dollars and then our deductible resets, because it’s January so of those 2022 costs the insurance would have covered ninety percent of them and my husband and I would have paid out of pocket 394 dollars, which brings our out-of-pocket costs and insurance World up to six thousand six hundred and seventy four dollars.
When you include the premiums that we also would have been paying every month now in 2023, our costs were about forty one hundred dollars because she had a very expensive elaborate surgery of which we would have paid a thousand dollars toward our 2023 deductible and then the Insurance would have kicked in which would have left us with three hundred and eleven dollars out of pocket and then 176 more dollars in premiums. So in Insurance World we’re talking eight thousand one hundred sixty one dollars out of pocket compared to the nine thousand and six dollars that we actually spent after just nine more months of paying 88 dollars per month in premiums, we would have been neck and neck, assuming Nothing else goes wrong in that time, but is there a better way, so, let’s assess our ultimate risk reward strategy here and try to hedge our bets. According to MarketWatch, the average cost of pet insurance for cats is between, like Fourteen and twenty four dollars and for dogs it’s between around 23 and 48 dollars per month. Now this is going to depend on your insurer, the breed of the animal, how old the animal is, but the cheapest dogs to ensure – not surprisingly, it’s dachshunds, mutts, Australian shepherds, which actually did surprise me and the most expensive are bulldogs French Bulldogs German Shepherds golden retrievers Labs and Rottweilers so we’re gon na link the full list of Market watches research on the least and most expensive dog breeds to ensure in the description. But when it comes to claims, the average claim paid out was 278 dollars, which made me realize wow yeah.
We might just be that unlucky. It was also worth noting that lemonade and fetch are the only two insurers who don’t have upfront, enrollment fees or monthly transaction fees. So, let’s figure out how to get the most bang for your buck and how you can hedge, your bed, ads strategically so beans had a ridiculous amount of things. Go wrong in a really short amount of time and it’s still amounted to less than ten thousand dollars. Total and while I initially ran the alternate reality math with an unlimited reimbursement budget, the monthly premium drops by 30 percent when you lower your annual reimbursement to fifteen thousand dollars.
Knowing what I know now, I think I’m comfortable declaring that most pet owners are probably going to be fine, risking it with a fifteen thousand dollar maximum annual reimbursement amount. It’S probably a safe gamble, it kind of seems like a sweet spot. If you took this same policy and you selected fifteen thousand instead of unlimited coverage, it’s gon na cost sixty three dollars per month instead of 88, and since every policy is different, here’s how to think about this and which level is going to make the most sense. Alright, so with the Embrace quote, I can see that I’m paying fifty dollars a month for five thousand dollars of annual coverage, but for just 13 dollars more, I get an additional ten thousand dollars of annual coverage. So at that point, the reward that I stand to gain an additional 10K per year.
Effectively costs me 156 dollars more on an annual basis. To me, that’s an asymmetric reward for the cost. Similarly, I can see that when I select a 70 reimbursement, I would pay fifty dollars per month. But when I bump up to 90 reimbursement, it’s an incremental twelve dollars, which means you’re getting an additional 20 of coverage on every accepted claim. For a hundred and forty four dollars more per year and lastly, I tend to go for high deductibles versus low deductibles, for example, if I had selected two hundred and fifty dollars instead of a thousand for my deductible, the price of my coverage would have doubled from 782 dollars per year to one thousand six hundred and fifty dollars per year, so to save 750 on my deductible, I’m paying eight hundred and sixty eight dollars more more in premiums which doesn’t really make sense.
I was also wondering: is there an ideal age to insure your pet, because we mentioned earlier that when you are insuring a puppy with no pre-existing conditions, you tend to get a better rate. But is that assumption true enough to justify the likelihood that you’re probably going to pay a lot of premiums over several years? We’Re in nothing is likely really to happen. Getting pet insurance earlier in a dog’s life can help offset the costs of life-changing or end-of-life care, but in looking at the difference in cost by age, also from Market watches, research there’s actually not typically quite a big jump in price from age. One to five.
For example, for the mixed breed, the average price to ensure a three-month-old puppy was thirty dollars and that same dog at five years old was 38. The largest jump in price actually happens between ages, 5 and 10. So to me, that indicates for from a pricing, Sweet Spot risk reward playoff strategy that ensuring somewhere around age, five is probably going to be the best bang for your buck. Most policies do have waiting periods because they want to avoid a situation wherein someone notices. Something is wrong with their pet gets insurance and then immediately tries to use it.
And if you think that you’re gon na get away with like a little light insurance fraud, maybe don’t because most pet insurance companies require you to submit documentation in the form of doctors. Records doctors notes, Etc to prove that there was nothing wrong that you knew about. So how does pet insurance work when you actually go to use it you’re going to visit the vet and then you’re going to pay the vet? You are responsible to pay them at the time the service is rendered. Then you’re going to get an itemized invoice from the vet and you’re going to use it to submit your claim with the other required paperwork and then you’re gon na wait probably for months and then, if your claim gets approved, they will reimburse you accordingly.
But remember they, this usually takes months, so pet insurance is not a substitute for having an emergency fund. The bottom line for me is that I love salmon beans to the point that I would probably bankrupt myself trying to fix them. So I am actually probably quite a good candidate for pet insurance, but based on what I know about how Insurance Works in practice and how often Flames are denied and now that beans has these pre-existing conditions that are not going to be covered in the future. The jury is still out on whether or not I am going to get pet insurance. But regardless of what I choose, I hope you now feel more prepared to make a more informed decision and that you can be Savvy with the coverage that you choose or don’t choose for your very own salmon beans.
