The emergency vet bill cost $6,000. Pet insurance wasn’t enough

When I adopted my dog, Otis, in the fall of 2020, I knew I was taking on an adorable but significant financial responsibility.

I have tried to make smart financial moves to pay for his care over the years, including purchasing pet insurance when I first brought him home and renewing my plan every year.

This insurance covers accident, illness, and some preventive care. This really helped when he was a puppy and had to go to the vet several times a year for vaccines, neutering, and a few other health concerns. In his first year, he easily exceeded his $750 annual deductible and was reimbursed nearly $1,000 after paying about $2,600 in vet bills for shots, neutering, cherry eye surgery, and prescriptions.

But my financial plans were put to the test in May when Otis ended up in the emergency room after eating a chunk of a toy tire. It was scary, but luckily the ordeal wasn’t as bad as I thought. No surgery was required, but the rubber came out and he became severely dehydrated, requiring intravenous fluids and overnight observation in the hospital. I was so thankful that he was okay. But emergency care cost $6,083.

Since I had to pay upfront, I paid it on my credit card, knowing I had emergency savings to cover it. But I also thought pet insurance would cover most of the bill. I knew the reimbursement rate after the $750 deduction was 70%. At the time, I didn’t remember that the annual redemption limit was only $2,500.

I wondered if my insurance was worth it to cover my out-of-pocket costs of about $3,600. Saving $73 each month, the same amount as my monthly insurance premium, probably won’t do much when faced with such a large bill. You also have the option of getting more coverage by increasing or eliminating your annual reimbursement limit, but this can nearly double your monthly premiums. We also hope that you will never have to use your insurance again for such a large claim.

I asked two financial planners how they advise pet owners to prepare for unexpected expenses. Here’s what I learned.

One emergency veterinarian bill may be enough to prove whether pet insurance is worth it. Jeff Judge, a Maryland-based certified financial planner, says your overall financial situation is more important than monthly premiums or out-of-pocket costs when deciding whether to buy insurance.

“The real question is…’Can I write a four-figure check tomorrow without having to scrape together the money I need elsewhere?” said Judge, who has three dogs himself.

If you don’t have pet insurance, you may end up paying high veterinary costs yourself. And for individuals and families with the savings or disposable income to comfortably cover those payments, it may not be worth it to pay monthly premiums for insurance that they may ultimately not need. However, some people may not be able to save enough money to match the protection they receive by paying monthly premiums.

For example, with Otis’ current provider, Spot Pet Insurance, you can get a policy with a 90% reimbursement rate and an annual limit of $10,000 for about $170 a month, according to website estimates. If you save the same amount in cash every month, it will take you nearly five years to accumulate $10,000. In the meantime, we can only hope that those expensive vet bills never come due.

There are many options to choose from when purchasing a pet insurance plan, and there are several steps you can take to keep costs down. Choosing a lower monthly premium will give you more cash each month, but may result in lower reimbursement rates and annual limits. The higher your deductible, the lower your monthly payments may be.

In retrospect, I wish the annual deductible limit had been higher, but I’m happy with my current monthly premiums and the ability to save extra cash for any emergency, not just an Otis-related accident. And in cases like mine, the judge says, an insurance policy combined with an emergency fund is the way to go.

Erin O’Brien, a Naples, Fla.-based CFP and owner of three dogs, says that while having an emergency fund can provide some peace of mind in case of an accident or illness with your pet, an insurance policy can help remove some of the unknowns surrounding hypothetical emergencies. Veterinary care costs vary widely, making it difficult to save upfront. According to pet-sitting company Rover, emergency veterinary care costs tend to range from as low as $300 to as high as $2,500.

If your pet suffers a fatal accident or develops a long-term illness, the costs can be even higher. At the very least, your insurance policy will give you a clear framework for how much you’ll pay, including your full out-of-pocket amount (unless your total medical costs are less than that) and your maximum out-of-pocket amount. The latter can be mitigated by annual reimbursement limits, but you can also purchase insurance without limits. Expensive veterinary bills may be high and maximum reimbursement may seem low. But every little bit helps.

O’Brien has combined insurance for all her dogs, and says, “Not only have I saved money, but I no longer have to worry about taking my pup to the vet because I know I’m covered. Insurance gives me that extra peace of mind.”

When purchasing pet insurance, it’s wise to shop around to find the most cost-effective option. And once you decide on a policy with your company, be sure to read the fine print to avoid any surprises when you need to file a claim, the judge says.

What’s more, focusing on monthly premiums is “the wrong starting point,” he says. Instead, pet owners should pay close attention to the following factors:

Reimbursement rate: Is it a percentage of the claim amount or a flat benefit schedule? Annual deductible: The amount you must pay out of pocket before the company reimburses you. Annual repayment limit: The highest amount that can be reimbursed each year. Fixed and variable premiums: How much you pay monthly or annually, and whether it increases with your pet’s age. Exclusions: If your pet has a pre-existing or breed-specific medical condition that may not be covered.

Going forward, I plan to increase my emergency savings a bit, knowing that Otis’ current policy is limited. I may consider the option of seeking more coverage, especially as my son gets older, but at the end of the day, I want to have the peace of mind that I can’t cover the cost of his care completely on my own.

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