How to Rate Pet Insurance like an Expert
Before I go into any details about rating pet insurances I would like to share with you a little about what I believe pet insurance is all about and how it has evolved other the last decade or two.
From an article I read recently it was stated that the pet insurance industry has evolved from only covering 1% of the pets in the US in 1995 while they are above 5% today. That is a 500% increase on a little over 10 years and it shows a clear trend that more and more people would pay whatever it takes to have their pet live longer.
The reason I say this is that pet owners are normally divided into two very different categories. The first category is the people that are rather pragmatic about having a pet animal. If the animal gets sick and the cost of treatment is above a certain amount they would rather put the animal to sleep than to spend thousands of dollars on treatment and medication.
The second group of people is those who would do almost whatever it took to treat their pet animal for any diseases and injuries that it may encounter.
Why is this an important observation when it comes to pet insurance? That is mainly because a pet insurance payment will normally over the lifetime of a pet cost somewhere between $2,000 to $6,000 dollars.
If we look back in time there were basic treatments for pet animals but most of them weren’t that expensive and most people could easily have paid for them out of their pocket. Today however, the pet medical industry has started selling organ transplants and MRI scans. Something that was previously reserved only for humans.
When factoring in those costs (which could range from $1,000 to $5,000 pr treatment) then a pet insurance will suddenly be a much better choice as most people don’t have that kind of cash lying around.
Probably the oldest pet insurance company, VPI pet insurance, has seen its revenue climb with a 40% annual rate since 1997 and is estimated to have about 85% of the total pet insurance market (2005 figures). That amounts to $110 million in gross sale.
Rating Your Pet Insurance – Experts Advice
If you want to rate pet insurance like the experts do, then you will have to go to work. There is a reason for the fact that they are considered experts and that is that they have spent a lot of time studying the different insurance policies and terms.
I don’t suggest that you go to get an exam in pet insurance policy but rather that you use these few important steps that will guide you towards the best solution without being an actual expert.
Ask for quotes – There is absolutely no reasonable explanation for not shopping around. Insurance companies are businesses like all other and as a customer you’ll likely get better prices, terms and negotiation power if you ask several companies what they can offer you. Remember to ask specific questions.
Call state insurance dept – As with all other insurance companies a pet insurance company should be registered at your state regulators.
Understand the fine print – It is vitally important that you spend time to understand the exclusions in the terms of the contract. When reading the policy make sure to highlight everything you don’t understand and make it your mission to call up the insurance company and ask them to explain it to you. Not only will you be learning a lot about pet insurance policies but the best part is that it is absolutely free education. Now how about that!!
Basic calculations – make sure to sit down and do some calculations. Studies have shown that most pet owners with insurance coverage spend far more on insurance costs than they will eventual get out of it. This means that it you took the same amount and put it into a savings account you could possibly end up having money left when all treatments had been paid for.
Of the four advices my bet is that you will get the most out of point number 3. Having pet insurance companies teach you about pet insurance policies and how to read them and having them teach you for free can literally save you thousands of dollars and lots of headaches over the course of your life. Yes it takes time but if we assume that you will have to spend 40 hours learning this stuff but you could save $2,000 or more over time wouldn’t an hourly (tax free) rate of $50 be time well spent?