Pet insurance: Lots to chew on

Special to The Times

Justin and Brandy Besemer were newly married and trying to pay off their wedding debt when they decided their family needed a dog -- an American Bulldog named Kaila.

Thus started one of their first arguments.

Brandy, who had never had a dog before, wanted to spend a little over $300 a year to buy pet insurance. Justin, who had always had dogs, thought it was a waste of money.

"His parents told me this horror story that made me insist we get it," explained Brandy, 28. "They were talking about their dog having to have a knee replaced and it cost them like $2,000. We couldn't afford that. I just didn't want to get a dog if I couldn't afford to take care of it."

When Kaila chewed up a string of Christmas lights a few months later, landing the dog in an emergency veterinary center, the Santa Monica couple was relieved that Brandy had prevailed. When they found that the dog had chronic urinary tract infections and food allergies, they realized that without the insurance they wouldn't have been able to afford treatment for Kaila.

"We joke that she's our little lemon," Brandy said. "This is the longest we've gone without having to take her to the vet, and it's been maybe three weeks."

Although the Besemers are delighted that they spent the money to buy pet insurance, plenty of experts agree with Justin's first assessment: It's a waste of money. If the couple had a different policy or a different disposition, it might be. However, as is true with many personal finance decisions, the smart choice on pet insurance is a personal one.

By and large, experts maintain that it's wasteful to insure against risks that are not catastrophic. It doesn't make sense, for example, to buy pet insurance to pay for routine medical issues such as shots and checkups. That's because you'll pay roughly as much for the coverage as the treatment. Whether it makes sense to buy a policy for major medical bills hinges on two things: emotion and finances.

If you would be emotionally devastated to lose a pet simply because you couldn't afford to treat it -- and a $5,000 vet bill would be more than your budget could take -- you might want to consider a policy. But if you have the resources to pay for emergency vet care -- or wouldn't be devastated to lose a pet if you didn't -- you could skip pet insurance.

Some suggest you set aside the amount you saved in premiums for future vet bills. If the dog is healthy, you could be far better off. If it's not, your economic health will depend on whether or not you choose to treat the animal.

Pet policies cost an average of $300 a year. But the cost can vary significantly based on the animal's breed and age and your ZIP Code.

Why? The cost differences for ZIP Code and age are relatively simple. Vets in high-cost urban areas charge more than those in rural locales, where the cost of living is less. And, like people, pets are more likely to get seriously ill as they age. Consequently, it would cost $181 to insure a mixed-breed puppy in Los Angeles with Philadelphia-based Petplan, but the same coverage would cost $281 if purchased for the same dog when he was 6 years old.

Then, too, just as it costs less to insure a Camry than a Camaro, it costs less to insure a mixed breed than a Cavalier King Charles spaniel, a breed that's prone to allergies and heart conditions, said Natasha Ashton, chief marketing officer of Petplan. Specifically, the annual premium for the spaniel puppy is $308. But the price would be $478 if bought when the dog was age 6.

Cats, by and large, are less costly to insure.

However, those who do choose to buy a pet policy would be wise to dive into the details.

Pet policies are not all alike. But to ferret out the differences, you need to carefully review the terms and conditions. This can be particularly pivotal for those with pure-breed animals, which are subject to a wide array of congenital ailments. Many policies exclude these diseases, which could make buying insurance a waste of money.

For example, Boise, Idaho-based Pets Best Insurance Services has a basic policy that has no annual limit on how much it will pay out. But if your dog suffered from hip dysphasia -- a common condition that can render a dog lame -- it would do you no good. That's because the company excludes coverage for hereditary and congenital ailments.

Veterinary Pet Insurance Co., a Brea-based company that markets itself as "nose-to-tail" coverage, also doesn't cover hereditary disorders. The company publishes a list of exclusions that apply to all breeds and has a second four-page listing of breed-specific disorders that are not covered, which includes narcolepsy in beagles, giant schnauzers and Irish setters, as well as the urinary tract problems that proved troublesome for the Besemers' bulldog.

(Kaila, who had Petplan insurance, was covered for those problems.)

Even when VPI does cover an ailment, it may not cover the costs completely. Outside of deductibles and co-payments, VPI, like many other plans, imposes a benefit schedule, which limits the amount it will pay for any specific diagnosis.

Deductibles for various plans can run as high as $500 per incident, along with co-pays of 20% of the allowed cost of the treatment.

Unlike human health coverage, in which doctors often agree to take the reimbursement rate as payment in full, pet insurance limits usually have no bearing on how much the vet will charge. If the vet charges vastly more, the coverage could prove woefully inadequate.

In addition, most pet coverage excludes preexisting conditions, and some insurers will boost your premiums or refuse to renew your policy if the pet proves costly to cover.

"You've got to look at the terms and conditions very closely," Ashton said. "Look at what's included and what's excluded and look at all the limits on your policy. The difference between pets and humans is you can choose to euthanize a pet if it's the best thing for them. But you don't want to have to do that because you can't afford the cost of treatment."

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