I Was Super Curious If Pet Insurance Could Help Me Save Money So I Talked To An Expert

My pets are worth every penny to me, but like, I still wanna have more pennies.

Pretty much everyone who knows me knows I have two cats and I'm more than a little bit obsessed with them. I mean, just look at them napping on their favorite fuzzy blanket:

Megan Liscomb/BuzzFeed

In case you're wondering, that's Smalls on the left and Lebowski on the right.

But as much as I love my little dudes, I don't love their vet bills. And tbh, I would probably faint if I worked out how much money I've spent on them over the years.

Having a pet can be so rewarding, but you ~fur sure~ need to be ready for all the costs involved in their care. Regular vaccinations, healthcare, food, litter, toys, and cat-sized bowties can really add up. So I try to find ways to save when I can, and lately I've been super curious about pet insurance.

Mikayla Rae @mikaywaaa_

Me, spending all my money on my dog

07:34 PM - 06 Jan 2021

First of all, having insurance for my little guys just sounds so grown-up and responsible! But before taking out a policy, I wanted to make sure I understand all the nitty-gritty details and what all that insurance jargon means. And I also wanted to figure out how to tell if a pet insurance policy is even worth it.

So I video-chatted with Mark Reyes, a certified financial planner who works with the financial wellness app Albert. Oh, and his rescue dog Chance sat in too. Good boy, Chance.

Pet insurance works kinda like human health insurance: You pay a monthly charge, aka a premium, for your pet's policy. Then, when they need to see the vet, you pay out-of-pocket up to a certain amount (called the deductible). Once you've met your deductible, the insurance will kick in and start helping you cover the costs.

@dottorpet / Via instagram.com

But unlike people insurance, which often covers some of the costs of care right away, with pet insurance you generally have to file a claim and wait to be reimbursed.

Okay, sounds simple enough, but can pet insurance ~actually~ help you save money at the vet? In the video below, Mark and Chance do the math to show how their pet insurance policy is working for them:

@albertapp / Via instagram.com

Basically, there are a few factors that go into determining if pet insurance could be right for your budget. First, there's the cost of the premium, which can depend on your pet's age, breed, and any pre-existing conditions. Mark says that pet insurance premiums for dogs typically range from $25 to over $100 a month. Then, you'll also want to consider how much you typically spend at the vet in a year, how much coverage you want, and what your deductible is.

For Chance, Mark pays $40 a month for pet insurance, which works out to $480 a year. The plan comes with a $250 deductible, so the policy basically adds up to $730 a year. Once Mark meets the deductible, his policy will cover 80% of his vet bills. This means that to break even, he's gotta spend at least $913 at the vet every year. That number might sound like a lot if you're not a pet owner, but in my experience, vet bills have a way of adding up quickly.

I absolutely loved the way that Mark broke this down and made it so easy to understand, so I asked for his thoughts on a couple of other pets. First up, meet my coworker Melissa's dog Rush.

Melissa Rae Photography

Rush is a Gemini who likes long walks on the beach. He's turning 2 on June 1, but he still has plenty of puppy energy.

Rush is a pretty healthy pup, but Melissa tells me she and her boyfriend spent about $1,100 at the vet last year on vaccinations, checkups, and an unexpected dental issue.

According to Mark, a pet like Rush could be a great candidate for pet insurance. "Usually the younger the dog, the cheaper the premium may be," he explained. And low premiums mean you have to spend less at the vet every year to break even. Plus, since Rush doesn't have any pre-existing conditions, it's more likely that a pet insurance policy would cover it if he did develop a condition later on.

But what if your pet *does* have a pre-existing condition? Well, let's go back to my buddy Lebowski for that.

Megan Liscomb/BuzzFeed

Lebowski is 8 years old, so he's really in the prime of his life. However, like a lot of male cats, he's had some urinary tract issues over the years. He needs to eat a prescription diet that helps with his condition, and he's spent a lot more time at the vet than he would like.

Last year, he had a flareup followed by a surgery that ran us about $3,000. Additionally, his prescription food costs about $80 a month. It's not cheap, but that comes with the territory when you adopt a pet.

Well, for a dude like Lebowski, insurance might not cover so many of his costs. Pet policies don't have to cover pre-existing conditions, and insurance probably wouldn't make a dent in his food bill either. "I don't think food is covered by most pet insurance, but prescription drugs are covered by certain policies," Mark said. For Lebowski, it might make more financial sense to set up an emergency fund and save up on my own instead.

So we've looked at a young 'n' healthy pup and a kitty with a pre-existing condition, but where do senior pets fit in? For answers there, say hi to my coworker Hannah's pal Harvey.

Hannah Wilkowski/BuzzFeed

Harvey is a 10-year-old rescue who also happens to be a retired celebri-dog (seriously, check him out in this Iams commercial from back in the day). He's got a few more white hairs than he used to, but Hannah says he's still a very good boy.

Still, as pets get older, they often need more care. Hannah says she spent about $1,500 on his care over the past year, which includes anti-inflammatory meds for a back injury.

Mark thinks that for an older pet like Harvey, it might not be such a good idea to start a policy now if they've never had insurance before. "The monthly premium may be anywhere from $100 to $120 for that dog. So that might equal $1,200 to $2,000 a year [just for the premium], which may not make sense." Since the premiums are so high for older pets and pets tend to have more pre-existing conditions as they age, pet insurance could very likely end up costing more yet covering less.

So the decision to take out a pet insurance policy really has just as much to do with your pet's health and age as it does with your budget. It's a totally individual decision. But if you think that a pet insurance policy might suit you and your little pal's needs, there are just a few more things to consider.

@darlingdino / Via instagram.com

Like with any insurance, you'll want to shop around to find the right policy for your situation. And while, of course, you'll want to pay careful attention to the monthly premiums you're offered, Mark says it's really important to be aware of the deductible too. "The deductible is kind of the skin in the game of how much money's coming out of your pocket... Also, if you have a lower deductible, that tends to mean that you have a higher monthly premium." So keeping your monthly insurance bill lower just might mean that you'll have to shell out more money at the vet before your insurance even kicks in.

And you'll also want to check out the coinsurance rate, which represents the percentage of your bills that the insurance will cover after you've met your deductible. The higher your coinsurance rate, the less you'll have to spend on top of your deductible and premiums to break even.

And there are also different kinds of pet insurance policies out there. Mark says, "Sometimes you can just get a basic catastrophic kind of policy where like extreme surgeries are covered but flea medicine, heartworm, and vaccinations are not covered. If you want that coverage, you'd have to pay a little more each month."

Lemonade / Via lemonade.com

To see what this looks like in the real world, I checked pet insurance prices on Lemonade for my other cat Smalls to see what kinds of pet policies they could offer for a healthy 4-year-old cat who happens to love belly rubs. For $20 a month and a $250 deductible, I can sign him up for their most basic plan which covers diagnostics, procedures, medications, accidents, and illnesses. This plan works out to about $490 a year before the coinsurance kicks in.

For an additional $10 a month, I can upgrade to a plan that also covers wellness visits, preventative bloodwork, vaccines, and regular parasite testing. For Smalls, this tier of coverage has no deductible, so it works out to about $360 a year. It costs more per month than the basic plan, but it covers more stuff *and* would cost less to break even. For another $5 a month on top of that, they'll also cover vet visit fees, physical therapy, and even acupuncture (which I can't imagine a cat sitting through, but who knows?). All of these plans offer an 80% coinsurance rate for Smalls, but that might be different for other pets.

One last factor in deciding if pet insurance is right for you is your own personal tolerance for risk. Are you okay with spending money on an insurance policy while your pet is healthy so you can save money if or when they get sick? Or would you rather stash away savings on your own and deal with vet bills as they happen?

@doggosdoingthings / Via instagram.com

I used to be in the second camp, but after how expensive Lebowski's care has been, I'm thinking that getting insurance for Smalls while he's young and healthy could really pay off in the long run. It's pretty likely that Smalls will need serious care at some point (especially as he gets older) so an insurance policy for him would give me some peace of mind.

My next step is shopping around with a few more companies to see where we can get the best deal. And since a policy wouldn't go as far for Lebowski, I'm setting a new savings goal and putting money aside for him every month.

Whether pet insurance is right for you or not, it's a really good idea to have a plan in place that can help you cover vet bills. After all, even with insurance, you still have to pay upfront for your pet's care.

@buoy_is_a_frog / Via instagram.com

If you don't have a lot of savings or pet insurance, you might ask around at local veterinarians to see if they offer payment plans on expensive procedures. Some vets do, but many actually don't. If you can find a vet who's more willing to work with you, that can be a huge advantage. And some vets offer discounts to people in certain professions or who belong to certain demographics, so it could be worthwhile to ask about that too.

I've had to put vet bills on credit cards in the past, which absolutely sucks, thanks to interest charges. However, after I got my credit score up a couple years ago, I once took out a new credit card that came with an initial interest-free period just to pay a vet bill. I put the bill on that card and then worked like a devil to pay it off before the interest kicked in.

It's worthwhile to think about how you'll pay for a vet visit *before* your pet gets sick. It's a lot less stressful to figure this stuff out when they're healthy than it is when you're crying in your vet's office (they always give me tissues, but it's sooo awkward). So start saving up, consider pet insurance, talk to your vet to find out what they offer, and think about other options that could help you cover a surprise bill.

And in addition to pet insurance, Mark offered up a few more tips that can help pet owners save money:

@littlebittyoctober / Via instagram.com

• See if friends, neighbors, or family can help pet-sit when you go out of town so you can save on boarding costs.

• Shop for toys, pet beds, and other fun stuff at stores like Ross or Homegoods, where you can find trusted toy brands like Kong at a serious discount.

• Try making DIY toys for your pets. For example, Chance likes chewing on a tree branch now and then, and my cats would rather play with the box our Chewy order comes in than any toy my money can buy.

• You can also make your own treats, just check with your vet first to make sure they don't contain any ingredients that could be harmful to your pets.

• Ask your vet if there are aspects of your pet's care that you can do yourself, like cleaning your dog's ears or trimming your cat's claws, so you can save on grooming.

Finally, Mark always recommends adopting a pet from a shelter rather than going to a breeder. "I'm a sweetheart for those dogs in the shelters who've had a past life and deserve a second chance, and financially, adopting is much cheaper."

@kingstonhumanesociety / Via instagram.com

A purebred puppy can cost thousands of dollars, but you can give a rescue dog a new forever home for a couple hundred bucks or find an awesome cat who was born in a dumpster like my little trash babies. "Some shelters offer free waived adoptions during certain times of the year," Mark added. So even though you'll probably spend a small fortune on your pet, you can certainly find ways to save here and there while still giving them an amazing life.

What are your best tips for saving money as a pet owner? Tell us what's worked for you in the comments below.

And for more money tips and tricks, check out the rest of our personal finance posts.