Should I Buy a Pet Insurance Policy?

Pet insurance is a billion-dollar industry, but there are still plenty of misconceptions about what it is, how it works and whether it makes sense for the average pet owner. We love our animals and want to ensure their best care, so it’s important to know that what goes by the name is totally unrelated to a similar kind of financial protection, known as livestock insurance, that farmers often take out on their herds. Here’s the lowdown, how it differs from livestock coverage, and the key facts you need to decide whether it’s a smart option for your pet.

Is Not Livestock Insurance

Farmers take out herd policies on cattle, horses, and other animals that they raise for profit. Often times, livestock policies are bundled in with comprehensive farm policies that cover the entire farming business, the farmer’s residence, all farm equipment and the livestock. When animals become sick or when entire herds contract diseases and die, livestock policies reimburse for up to the entire value of the herd, which could put a strain even on Floyd Mayweathers net worth.

Pet insurance is often confused with livestock, but in reality, the two are in no way related. For pets, it does not cover animals that are raised or bred “for profit.” By definition, pet policies only cover animals that you keep as “companion animals.” At least that’s what the insurance companies call them. Most people call them “pets” and they include cats and dogs only, as far as the companies are concerned.

If you have a pet garter snake or exotic fish, you will have a hard time finding reasonably-priced pet insurance. One or two carriers now offer on animals other than cats and dogs, but the policies are pricey. Bottom line: If you are dead-set on getting it for your rare Australian parrot, you can get it but it might not make economic sense. Just paying the vet bills in cash usually is a better deal.

Is Not “Health Insurance” for a Pet

The most common myth is that it’s similar to health insurance we humans are so familiar with. In fact, it is very much like a type we know a lot about: car insurance. Pet policies, according to definitions, are considered a form of “property” coverage, just like your car policy. And like your car, pet insurance does not pay out until after you’ve incurred a loss, in this case a vet bill for an accident. Standard animal illnesses are usually not covered by pet policies.

Can Save on Veterinary Bills

Fortunately, the industry is changing rapidly to include coverage for standard health issues like skin diseases, stomach ailments and more. Some of the newer policies now cover routine shots and checkups, something that was unheard of in the industry just 10 years ago. Premiums for “comprehensive” pet policies are quite reasonable and can cover a large portion of vet bills. For most dog and cat owners, pet insurance can make sense, especially for young animals that don’t have any pre-existing conditions.


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