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HealthyAssurance by petMD

Healthy Assurance's mission is simple: To provide pet owners with unbiased, reliable, helpful, and timely information on pet insurance from a veterinarian’s perspective. And what better veterinarian to write this blog than Dr. Kenney, a small animal practioner and author of Your Guide to Understanding Pet Health Insurance

Which Is Best - Pet Insurance or Savings Account?

One bit of advice that I see over and over on the Internet is to open a savings account to help pay for your pet’s healthcare needs, rather than buying pet insurance. The recommendation is to put the money that you would be "wasting" on pet insurance premiums into the savings account, and when you have to go to the vet, the money will be there to pay for the visit. 

People who give this advice miss the point of pet insurance. Pet insurance is meant to help you bridge the gap financially when large, unplanned and unexpected expenses occur and you don’t have adequate savings to cover it. You never know when you may be faced with a large, unexpected expense. For example, what if a couple of months into your savings plan, your pet is seriously ill or injured and the bill is $1,500 and you’ve only saved $75? Will your pet wait to get sick until you have enough money saved up?

I think it’s great advice to have a savings account, but not in place of pet insurance. In my opinion, it’s not an either/or proposition, but both. You’ll still have those annual wellness expenses to pay for, and even if you have pet insurance, you’ll still have to pay the deductible, co-pay and any uncovered expenses. Most pet owners will benefit from having a 3-pronged approach to paying for their pet’s healthcare — savings, available credit and pet insurance.

The current model for pet insurance in the United States requires pet owners to pay their veterinarian and then seek reimbursement from the insurance company. Many pet owners pay their veterinarian with a credit card and then promptly file a claim with the insurance company. When the time comes to pay the credit card bill, they should have already received a reimbursement check from the insurance company. We recommend CareCredit to our clients because they offer several no-interest payment plans that work well with pet insurance.

Keep in mind that the best time to start saving, apply for CareCredit, and purchase pet insurance is now — before the unexpected and unplanned happens. When your pet is seriously ill or injured, especially if it is a crisis situation, the last thing you want to be concerned about is how you are going to pay the bill.

People who purchase pet health insurance must understand there will be years when they pay the premium and realize little to no benefit from the policy. This is actually good! That means that your pet remained healthy that year. It is this way with almost any other type of insurance, too.

For example, you may pay $1,000 annually for 30 years for homeowners insurance and realize little or no benefit from it. You may pay $300 a month for several years for auto insurance and not get any benefit out of it. Should this upset you? No! Remember, the purpose of buying insurance is to protect you against catastrophic events that may occur in your life that you aren’t able to financially cover yourself. You should no more buy pet health insurance hoping that your pet will get sick than you’d buy auto insurance hoping you’ll have a accident.

For a real-life example of what I consider a proper attitude and perspective toward pet health insurance and the role it can play, along with savings to help pay your pet’s healthcare expenses, go to my recent blog, Pet Insurance: A Pet’s Perspective, and read my response to Douggie’s comment (#2).

Dr. Doug Kenney


Pic of the day: trog with a cone by Chris Corwin

Comments  11

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  • Point Taken
    05/12/2011 07:31am

    Point taken. I've always been an advocate of a savings account to cover emergencies, but you are so right when you mention that Fido or Fluffy can have an emergency two months into savings.

    You are also correct that we all buy insurance, pay very healthy premiums and hope we never have to use it.

    I have used the widget here on PetMD to ask for quotes from three pet insurance companies and will be anxious to see how much and what they offer.

    Years ago I traded emails with a company (don't remember which one) and was disappointed in what they would and would not cover. Hopefully the pet insurance has matured with passing time and the coverage is more comprehensive.

  • 05/13/2011 09:36pm

    I was a bit underwhelmed by the options I looked into as well, but it's been a few years since said inquiry, and perhaps things have improved since then.

    My biggest problem is the issue of preexisting conditions. The cat I'd most like to insure is not insurable. He arrived with multiple issues (young feral cat of dubious parentage), so we never had the option of planning for the future and investing in a policy when he was healthy.

    It's because of said cat that I get a little uneasy whenever I see the profession getting too insurance-happy. Should veterinary medicine go the way of human medicine, what becomes of those that aren't eligible for insurance?

  • 05/13/2011 11:29pm

    Thanks for your comment.

    Having pre-existing conditions doesn't necessarily mean a pet is uninsurable, but there are certain conditions that may disqualify a pet for coverage and these may vary from company to company.

    There are less exclusions than there were several years ago. Some of the newer companies listened to complaints that pet owners had when they designed their policies, and some of the older, more established companies have changed (updated) their policies to remain competitive.

    There are now a dozen companies offering policies in the U.S. and I'm an advocate for looking at all of them before deciding which one is best for you and your pet.

    Next week's blog post will deal with the issue of pre-existing conditions.

  • 05/16/2011 08:16pm

    I'm looking forward to it!

  • 05/12/2011 01:44pm

    Love, love, love(!) that you mentioned most (if not all) pet insurance companies require you to pay the bill and will then reimburse you. Many people seemed startled when they realize that pet insurance doesnt function like health insurance.

  • 05/12/2011 07:36pm

    I will have a post soon on the differences between pet insurance and our health insurance.

    I once had a client say to me, "Now if I get this insurance, that means when I come in I won't have to pay anything, right?

    I too am amazed that most people who get pet insurance seem to somehow know that they have to pay up front and get reimbursed which is amazing since on most pet insurance websites, I have a hard time finding that bit of information. I don't mean to imply anyone is hiding this fact, but just that it seems to be assumed that it is common knowledge.

    This is a drawback to pet insurance and in my opinion one of the main reasons that despite being around for almost 30 years that only about 2% of the pets are insured in this country.

    I will also have a future blog post about that.

  • In favor of insurance
    05/12/2011 09:10pm

    I get so irritated when I hear someone say that you should just save the money you'd pay for insurance & then you'd have the money when something happens. Let me give you a couple of examples. Shelby tore her CCL 4 1/2 years ago. The amount that was reimbursed on her claim exceeded the amount I paid for her yearly premium. Last year Shelby was diagnosed with cancer. There is no way that I could have saved enough to cover all of her chemo & her surgery even over the 11 years that I've had insurance. Now, again, this year, the cancer is back & once again, VPI is paying claims. I can't say enough good about VPI. I would never wish on anyone that they'd have to go through what I'm going through with Shelby having cancer. Thank goodness I have insurance! I wish I didn't have to use the insurance as much as I do but there's no way you can know that when you bring the little ball of fur into your home. Get the insurance!

  • Permission to reprint
    05/12/2011 11:34pm

    I'd like permission to reprint this article (in part) in a non-profit, breed club newsletter of the Vizsla Society of Ontario club (located in Canada).

    Thank you.
    The Editor
    Vizsla Voice

  • group plan
    05/13/2011 09:57am

    I am fortunate that my workplace offers a Pet Insurance plan that is discounted due to employees comprising a group. We adopted our pup last year at the same time that a close friend was facing very large vet bills trying to save her older dog who had an illness that was very difficult to pin down. We signed up for the insurance plan immediately. If we never have to use it that will be wonderful, but we knew we didn't want to ever face the question "Can we afford to treat her?". Our pup has been wonderfully healthy so far, and my husband and I will keep paying the premium and hoping she stays that way for years to come.

    Our friend lost her beloved boy, but has also bought insurance for the bouncy pup that came into her life a few months later.

  • Un-able to insure my dog
    05/19/2011 09:05am

    I wish there were insurance companies that would insure animals who have been rescued due to neglect and abuse but, there arent. I rescued my little chiuahua, when she was 4yrs. old and in very bad health. She immediatly had to have surgery and she has to take medication on a daily basis. After months of myself and the doctor looking for companies that would insure my little one, her pre-existing conditions and the uncertainty of there being more un-seen, at that time, she wasnt eligible to be insured. She's been with me now for 9yrs. Im just so blessed she has a doctor who works with me financially. More than anything, I'm blessed to still have her in my life.

  • 07/04/2011 11:27am


    You are correct that adopting a rescue pet that is sick or has obvious pre-existing conditions may preclude that pet from coverage with a pet insurance policy depending on what those pre-existing conditions are.

    However, many rescued pets can be covered by pet insurance. If you adopt such a pet, take the pet to your veterinarian for a checkup. This examination will be the basis of whether the pet is eligible for coverage when you apply for a policy and whether there are any pre-existing conditions that will be excluded from coverage.


About Healthy Assurance

  • Dr Kenney, DVM
    Lisa Radosta, DVM, DACVB

    Doug Kenney practices small animal medicine and surgery at Houston Levee Animal Hospital in Cordova, Tennessee. He has a special interest in wellness care...

    Extended Bio