Anyone doing their homework on pet insurance providers has probably asked themselves the question of whether it makes more sense to buy a policy or simply sock away money in a pet health savings account. Figuring out which one will provide the best value for the investment is a no-brainer when you begin to crunch the numbers.
The simple fact is that an unexpected illness or injury can happen to your pet at any time, whether you’ve saved $75 or $7,500. If you happen to be at the beginning of your quest to save, you may wind up facing vet bills that you just can’t afford.
Pet insurance is designed to protect you from a major financial loss in cases of unexpected health crises, and that protection can take effect as soon as 24 hours after enrollment (waiting periods vary by provider). In other words, you could sign up for a pet insurance policy on Monday, and have access to tens of thousands of dollars in coverage on Tuesday. Consider how long it would take to save that sum.
The trick to making your investment pay dividends when you need it to is in finding the right insurance provider. Before buying a policy, make sure there are no per-incident or per-illness limits on coverage, and no lifetime limits. Otherwise, you can easily max out a $2,500 maximum allowance for a condition like allergies long before the treatment for that condition is complete.
This isn’t to say that setting up a savings account to help pay for unexpected vet bills is a bad idea; in fact, I highly recommend doing so. Even with the best pet insurance, you are still responsible to pay deductibles and (if you choose it) co-insurance, so it makes sense to have a rainy day fund in place to protect your budget when times get tough. Opting for co-insurance helps keep your monthly premium lower, but you’ll pay more out of pocket at the time of the incident, so it helps to have some savings to provide for this.
In the end, even if it takes years before you make a claim on your pet insurance, you should still expect some value delivered from your provider in the meantime. Look for a company that provides policyholders with access to pet health resources and information (a quick peek at their website is a good place to start) – you can bet that a company with a strong pet health ethos is going to be there for you when you need them most.
When it comes to the question of buying a pet health insurance policy or starting a pet savings account, my advice is, do both. Let the savings take care of the little things, and rely on your pet insurance provider to pick up the tab when vet bills become far more than you can afford.