It can be hard to figure out whether it’s better to sock away money in a savings account or put money down on pet insurance premiums each month. While a small dollar savings strategy is a healthy habit to build that can help you meet many financial goals, it may not be the best choice when it comes to fully self-insuring your pet’s medical care.
The American Pet Products Association reported that pet owners spent $18.11 billion on veterinary care in 2018. Given the rising cost of pet healthcare, it makes sense that pet owners are looking for affordable pet insurance options. Whatever level of coverage you decide on, should anything happen to your dog or cat, you’re likely to see the benefits of having pet insurance for your furry friend.
To help illustrate why having pet insurance makes a difference, here’s an example of how two visits to the vet’s office would play out: one where the owner has a monthly savings strategy and one where the owner has Bivvy pet insurance coverage.
Say you and your neighbor adopted puppies from the same litter two years ago. The dogs are off leash in your fenced-in yard while both families barbeque for the Fourth of July. The dogs run around the house and come back with two identical faces full of porcupine needles.
You’ve been paying a $10 premium each month for Bivvy pet insurance coverage, while your neighbor’s been depositing the same amount into her savings account. At this point in the year, you’ve put down $70 and she’s saved $70.
You rush the dogs to the only vet in town who’s open on the holiday. They have no trouble getting the quills out – all it takes is a light amount of anesthesia and about 45 minutes.
You both receive bills for the same services:
-The base charge for the visit is $100 because of the holiday.
-The anesthesia costs $95.
-The vet administers an antihistamine and a pain reliever, which adds $25 to the bill.
You’re both billed $220 for this visit.
Your neighbor will pay the full amount. After spending what she’s already saved up, she’ll be out an additional $150.
Meanwhile, you’ll pay for the visit and then be reimbursed for 75 percent of your dog’s healthcare costs by Bivvy, which means that you’ll receive $165 back. So far this year, including your premiums, you’ve only paid $125 for the same care.
Later that month, you and your neighbor take your rowdy pups to a local hiking trail for a day in the woods. The dogs sniff out a river and spend about ten minutes pretending not to hear you calling them back to the trail. They’re new to swimming, but they love the cool water.
Back at home that evening you notice your dog won’t stop scratching her ears. She’s whining and seems uncomfortable. The next morning you take her to the vet and find your neighbor already in the waiting room. Both dogs got an ear infection from their quick dip.
At the end of the visit, you and your neighbor are billed for these veterinary services:
-The office visit costs $46 during regular working hours.
-Testing the ear issue costs $29.
-The medication the vet uses to clean their ears costs $25.
-Additional medication to treat their ear infection add $27 to the bill.
The total bills match: another $127.
Your friend hasn’t had the time to save more money; her total for the year is $277 out of pocket.
Because you still haven’t met the $1,000 annual limit, your Bivvy pet insurance coinsurance will kick in again. You’ll pay the $127 out of pocket, and your pet insurer will reimburse 75 percent of this cost; you’ll end up paying only $31.75 for this care.
At this point in the year, you’ve only paid $156.75, including your monthly premiums. Even with her monthly savings plan, your neighbor has paid the full $277 – that’s $207 more than she’d saved to date.
While small dollar savings plans can help bolster your savings account, this strategy for self-insuring your pet’s healthcare needs typically comes up short. Setting a small amount of money aside each month to build an emergency fund for your pet’s health is a good idea, but it’s unlikely to provide you with the same financial cushion as an affordable pet health insurance plan.
It can be difficult to think about your pet’s healthcare as a chart of dollar signs and bills due. But it’s important to be pragmatic when it comes to your pet’s healthcare.
To take a broader view of the emergency pet costs, consider that back in 2016 the average cost for emergency veterinary care was $1,500. If you set aside $10 a month for two years with no pet health emergencies, you’ll still only have $200 stashed away for a rainy day.
While the costs cited in this post are estimates based on the typical cost of veterinary care, they’re more average than extreme. If you don’t have coverage yet, consider signing up for Bivvy pet insurance today so you can support your pet without breaking the bank in case something goes wrong.