Adios, Sayonara, and Arrivederci Pet Insurance!

I had been contemplating getting rid of my pet insurance for a while, especially after a youngandthrifty reader (and ex-employee of a pet insurance company) mentioned on my post (whether my pet insurance claim would be approved), that pet insurance companies paid out 50 cents for every $1 that you pay in pet insurance premiums. The anxiety waiting and waiting for a cheque (or rejection letter which is more so the case) really ate away at me, especially when they make up another reason why the claim can’t be covered this time.

I was using Petcare because I didn’t want to be paying the $40 a month it would have cost to sign up with Trupanion or Vetinsurance.  That was kind of a mistake because Petcare seemed like they would raise rates and penalize you for making too many claims.  Apparently Trupanion and Vetinsurance claim not to do this, that they raise rates (if needed) as a whole to all members, and not solely you for making claims.  Unfortunately, I did a review of how to save money on pet insurance AFTER the fact.  You may be wondering why I didn’t just switch pet insurance providers.  The problem with switching to a new pet insurance provider is that you start from scratch- any conditions your pet had with one provider becomes a pre-existing condition of the new provider.  So basically you’re getting less and less covered.

So I was still humming and hawing, and staring at the $30 on my credit card each month for a few months, deliberating on whether or not to cancel the pet insurance… when I got a letter in the mail from the pet insurance company.

I knew that they were going to increase the premiums because of the bloody new HST shoved down our throats imposed on us (for all you non-taxed-to-the-nines-readers, it is an additional 7-8% tax on most things to “harmonize” the Goods and Services Tax and the Provincial Sales Tax), but I wasn’t prepared for them to raise my pet insurance premiums for other reasons.

The pet insurance company said they had increased the rates across the board across the province, but they also reviewed my claims history (thank you very much but I didn’t ask you t0).  They usually review the claims history at the anniversary for the pet insurance start date, but this claims history review was well before the anniversary.  They said I had incurred claims of $X amount of dollars, because it was so much, they HAD to implement a claims surcharge.

They were asking me not to submit a claim for the next 12 months. If I didn’t submit a claim, then the surcharge would be REVIEWED (note they didn’t say removed).

My monthly premium went up by $5 a month.  The premium doesn’t include the $100 deductible (or was it $200 I forget) per year before you get paid 80% of the costs of the bill.  That doesn’t seem like much.. but it can add up.  $60 extra a year at least, and they would likely increase my premiums as my pet got older too.

I decided I had enough and called to stopped the insurance. I might decide to just get accident insurance in the future (it’s usually cheap, like $10-$12 a month), but at the present moment I have decided to just sock away money into a newly created pet savings account.  I actually labeled the savings account as “pet savings”… lol.

ING direct has this promotion going on right now (it got mailed to me) for existing (possibly new too) customers whereby if you sign up for an automatic savings plan before August 16, 2010, and you contribute at least $100 a month for six months (until the end of March, 2011), then they will pay you $25 at the end of the agreed term.  This is probably on top of the $25 they give you after you put in $100 minimum deposit on a new savings account.  So you get $50 for putting away $600 to $700 over a period of six months.  That’s not too too bad… 7-8% return on investment not including the compound interest (which isn’t much, only 1.3% but better than most competitors).

That would be $600 set aside for a rainy day were I to need to take my dog to the vet.  After the six months period, I plan to sock away $35-$50 a month automatically to my new automatic pet savings account ($100 a month is a bit steep for me to allocate to my pet, but I’m going to do so for six months so I can reap the free $25).  At least the money saved up will be my money, until I have to use it for a vet trip.  It’s a good idea to save for a rainy day, especially with vet visits- they can cost a pretty penny.

Wish me luck.  Lets hope my dog doesn’t need to incur a $350 vet bill in the next few months, not until my pet savings account starts accumulating. =)

If you have a pet, do you use pet insurance?  Have you found it beneficial? Did you have the same experience as me where you just decided to jump ship?


Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

25 Responses to Adios, Sayonara, and Arrivederci Pet Insurance!

  1. I agree, dealing with pet insurance companies is simply not worth it, especially when they have little oversight and a huge incentive to deny claims. I researched VPI and some other companies in the US, and came to the same conclusion.

    I suspect most of their profits are the premiums of new customers until their first claim. They deny/delay/ignore, and then the customer cancels in disgust.

  2. I ended up cancelling my pet insurance as well. They jerked me around and denied every claim I submitted.

    Then when I called to cancel they sent me a letter telling me that my dogs were going to get hurt really badly and I wouldn’t be able to pay for their medical care. It was pretty ridiculous.

    I started putting the money into a savings account at ING and I’ve never looked back!

    • @Debt Free Girl- omg that is ridiculous! That letter almost sounds like a threat, lol! Good to hear putting money away with ING is working out for you too! I was getting sick of them denying most claims… my friend even had trouble canceling her pet insurance after her dog died… they wanted proof that he died!

  3. I’d say this is the best option. If you take all your monthly payments you would have made to insurance and put them in an account you hopefully don’t use very often you will likely be ahead, and that’s without considering the deductible or possibility of rejection. Remember to try to negotiate your vet bill too, you never know if you don’t ask.

    • @Jonathon- Yeah, the anxiety when opening that letter, and feeling whether it was “thick” enough to include a cheque was just not worth it for me. It just feels so bad to be rejected, ya know? It makes sense though, insurance companies can’t be in business unless they made a profit… and they make a profit when they deny your claims and continue to get your monthly premiums.

      @Alex C- Thanks for visiting- I haven’t tried negotiating my vet bill, but that’s a good idea. I do negotiate what tests I want ordered or whatnot. Here’s hoping it all works out well =)

  4. The Wife and I have VPI, and I think we are keeping it for a while. I couldn’t imagine being in a situation where I’d have to make the decision whether to put my puppy down bc of expensive surgery.

    Granted they could deny coversage, but at least I could then bring suit and settle.

  5. I don’t have it but my sister does! Here dog had $1,000 surgery for a broken knee… So after that she started buy the insurance. Since they she hasn’t had a problem with the dog to see if they would really cover it or not…

    Is that your chocolate lab? I ask because we also have a chocolate lab! They are great dogs!

    • @Evan- Yeah, it’s kind of 50/50 right? I think I might get it again as my dog becomes a bit older, but before the vets can diagnose him with anything to render his conditions “pre-existing”.. but for now, I think I’ll just sock some money aside. I think if I were to save up about $2000-$4000 then that should cover most surgeries, hopefully…

      @Money Reasons- That’s what happened to me too! (not a broken knee, but an expensive situation where I had to fork up a pretty penny- so I decided to get pet insurance.. and found I was still forking up a pretty penny too). Usually they would cover you, unless you had a pre-existing condition that was documented in the past reports. No I don’t have a chocolate lab- but he’s adorable isn’t he (courtesy of photobucket lol)? I’ve dog sat for a chocolate lab and he was such a sweety =)

  6. I actually do carry pet insurance on my three cats. I started it after I had a cat who got very sick and I spent nearly $15k paying for her care.

    I don’t know… maybe it is a foolish expense, but I just don’t ever want to be in the situation of having to choose between their lives and my money.

  7. I think you did the right thing. Saving money instead of dishing it out to an insurance company who may or may not pay the entire amount of the pet claim or any at all is a much better solution. BTW, is that a picture of your dog? It’s a really adorable photo. (I’m a cat owner, so don’t gush over dogs much. :) )

    • @Rebecca the Greeniac- Thanks for visiting. Wow $15K, that is definitely incentive to get pet insurance. That’s true, if it were something acute (like the dog or cat swallowing something and needing surgery) it would be very difficult to have to decide between their life for something so acute (as opposed to having cancer, and suffering) or money. I think I might reconsider pet insurance down the road, but may choose a different company, and perhaps a different plan.

      @Financial Cents- Thanks for your input. =)

      @Little House- Yeah, it was pretty nerve wrecking to wonder whether I would be approved or not…=( No, it’s not a picture of my dog- but he is really cute! I have a smaller dog =)

  8. I just wanted to add that one of my readers shared with me a podcast episode on:

    This American Life- Someone Else’s Money

    In act three, they talk about pet health insurance, and how it was intended to be a “win win win” scenario whereby the Vet makes more money because people feel more inclined to visit the veterinarian more when they have pet insurance, the Vet feels more inclined to order tests (billing more) etc.
    This has led to animals receiving chemotherapy, having knee surgery, and even a hedgehog being prescribed an antipsychotic medication because she wasn’t “snuggly” anymore for $1900.20.

    The humanization of veterinary medicine has helped increase more specialised vets, but it has also increased the price of veterinary services.

  9. I had to write. We adopted 2 adorable kittens yesterday. Your plan makes lots of sense. I think it is a win win to have the cash saved to pay for expenses. I don’t have the patience to deal with being turned down for a “pet” claim. Too much other stuff to think about. Regards, Barb

    • @Barb- Awe, thanks for sharing! Two kittens! Sounds so cute, and I’m sure the SPCA is very thankful too =) Funny, the podcast I was listening to today initially talked about how pet insurance is a win win win situation. Win= veterinarians make more because they bill more; win= pet insurance companies become profitable and win= pet owners feel they can claim more and have the vet order more tests.

      I think otherwise, because the price of veterinary medicine and the services offer has inflated drastically. Though it is good because there are more veterinary specialists now, but only if you have the $$ to pay for it all!

      Good luck with your cutie kittens, I hope they don’t have to see the vet for non-routine visits anytime soon!

  10. We have insurance for our cat. It is $18 a month.

    Until I am out of debt and can have a substantial emergency fund, I will keep paying the premiums. We had a costly illness when kitty was younger, and it was covered 90% no questions asked. We use PC Financial Pet Insurance, for the record, and have had nothing but good experiences.

    We only cover certain illnesses and accidents though, we didn’t splurge on the full coverage.

    • @Jenn- I was thinking of PC financial for the basics =) thanks for letting me know you had a good experience with them. $18 a month is pretty cheap! I’ll look into them. =)

  11. I think the most pet insurance is really not worth it. I have a giant breed dog and I got it for a while my premiums were 79.00 a month this is high but one ear infection is 285.00 in vet visit and meds. Giant breeds are literally twice as expensive at the vets. Then when they turned down 5 out of 6 claims I said forget it. Cancel it they also said when your pet gets really sick you will wish you had insurance I said no I won’t because you would most likely turn it down anyhow. I put 100 a month away and we have almost 4000 for vet bills.

    • @Mastifflover- sounds like you had a very similar experience to mine. I had repeatedly been turned down for claims, but I was only paying $32 a month. I can’t imagine paying $79 a month and having my claims get turned down repeatedly. Sounds very frustrating. I hope you did what I did any put money into an automatic savings account. It stings less that way.

  12. I pay about $20/month for my dog’s insurance. I think the deductible is $100? And then they cover 80% of everything after that. So far, I already used it in February 2010, and had little to no trouble getting my insurance claim filed and paid for.

    My dog and I walk a lot, and I got the insurance because she cut her feet a couple of times on glass in our neighborhood. Each time she cut her feet, the cost was over $200 just to get it looked at because they had to sedate her to get a good look.

    I think I would do better to have my own “insurance” fund for her like you mentioned, but since I am still building my own emergency fund, I think I will keep the insurance for a couple more years!

    • @Kellen- Thanks so much for visiting. Awe poor sweetie- got glass on her paws? That must hurt so much :( I’m glad it something that is more related to an “accident” rather than genetic predispositions (like my dog’s allergies). Sounds like your plan is a good one (to keep the insurance because of the lack of emergency fundage).

  13. Thanks – your post and other readers comments made me give a lot more thought to pet insurance. I think the chances of her having a minor injury like cut paws often enough for the insurance to pay off is unlikely. Less likely is a bigger issue. Plus, as an owner, you can minimize some risks, like if you try to never let your dog outdoors off-leash, it’s less likely it’ll get hit by a car.

    But let’s say my dog did get hit by a car – right now I wouldn’t have the cash to cover it. The insurance would really help. But, it’s a pretty small risk, so in a couple years when I could absorb a financial blow if necessary, I think I’ll cut the insurance.

    • @Kellen- yeah, accident insurance, IMO is a good idea. Usually it’s not too expensive too, like $10-$20 a month. I’m just not fond of “systems” insurance where they break down what body system is covered and what isn’t.

  14. All pet insurance providers fall under the big daddy Western Financial. It doesn’t matter what company you choose, it all goes into one big pot eventually so you will be screwed one way or another….

    Self insure. That is really the only way you can ensure you will be able to protect your pet. Keep in mind that insurance companies are in it to make money, they aren’t in it to protect you or your pet no matter what their promises are. READ THE FINE PRINT. They will deny your claim and they have pages and pages of legal documentation to indicate why they denied it. READ THE TERMS AND CONDITIONS. READ THEM THOUROUGHLY AND COMPLETELY!

    I purchased pet insurance in Apr of 09. I purchased the Value Plan which conered “select illness’s” up to $2000.00 over the dog’s lifetime and $2000.00 for accidents over the lifetime. The difference between the value plan and the accident plan is that it covers “select illness’s” as well as accidents… The choice plan co ers “all illness’s” and $2500.00 yearly. I chose the value plan because it was all I could really afford and yet they increased my premiums on two seperate occasions and I still kept the insurance. I was under the impression that my dog’s tests/visits would be covered but if his illness was not on the list of “select illness’s” then his treatment would NOT be covered.Recently, I had to take my dog to the vet because he was sick. The vet preformed numerous tests and numerous re-checks, blood tests an ultrasound and another procedure. It was determined that he has an illness NOT covered by my insurance. His treatment is Chemotherapy medication. I did not claim the medication. I did claim the vet costs associated with determining the diagnosis. Not once during my dog’s visits did I even once think my bills would not be covered. I trusted ths company with my money and I borrowed the $700 in bills from my retired father who is on a fixed income because The thought that my claims would be denied was not even considered. I totally put my trust in this company and I feel sick that they won’t pay a single dollar. I’m still totally confused as to how my visits aren’t covered because of the diagnosis…. It makes no sence to me, treatment, yes, OK, sure, but the visits??? I’m sick.I called to get some resolution and the agent would not even explain the rationale behind the decision, he just kept telling me over and over about the approved illness’s. I asked to speak with someone else. He informed me another agent would review my vlaim and then return my call. It was not 5 minutes before my phone rang. No to resolution,She tried to sell me more insurance. Disgusting!

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