Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn to navigate pet insurance options, costs, and smart budgeting strategies for your pet’s health care.
Is pet insurance worth it? How can pet owners afford the rising costs of veterinary care? Hosts Sean Pyles and Ronita Choudhuri-Wade discuss the ins and outs of pet insurance and various budgeting strategies to help you manage pet care expenses effectively. They begin with a discussion of the importance of pet insurance amidst escalating vet bills, with tips and tricks on the potential financial benefits of pet insurance, the low adoption rate of pet insurance in the US, and interesting trivia like the first US pet insurance policy issued for Lassie. Then, NerdWallet pet insurance expert Sarah Schlichter joins Sean and Ronita to discuss the basics of pet insurance. They discuss the different types of pet insurance plans available, common misconceptions about pet insurance, and other critical factors to consider, such as deductibles, co-pays, and policy exclusions. Plus: potential hidden fees and the nuances of claim payouts, key features to look for when comparing providers, and alternative financial strategies such as vet subscription services.
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
You know you need to insure your health. You know you need to insure your car and your house. But what about your four-legged family members? Is there actual value in pet insurance?
These days, there are so many advanced treatment options out there for animals to help them extend their lives, but not everyone has the budget to take advantage of those, and so pet insurance can help with that and really spare your family a heart-wrenching decision about how much treatment you can afford to try.
Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
And I’m Ronita Choudhuri-Wade.
This is episode two of our nerdy deep dive into the cost of pet ownership. Last time we walked you through some of the financial considerations before deciding to buy or adopt a pet, and one of the potentially significant expenses is those trips to the vet.
Yeah. You never know when your dog is going to find something on the sidewalk and decide to eat it, and I am looking at you, Mo. Or your cat decides to jettison one of its nine lives, run up a tree, and somehow not land on its feet coming down. I don’t know. Does that happen?
It could happen. I’m sure it does every day somewhere in the world. But even routine checkups at the vet can be pricey. Immunizations aren’t free. Then, maybe your pet pal needs some special prescription food or medication. Enter pet insurance.
Yeah, this is a big question for a lot of people. Is pet insurance worth it? And how do I know if a plan is a good one?
I think I just heard Mo in the background.
Mo has thoughts on pet insurance as well.
Of course. I hope it’s not as complicated as human health insurance, at least in this country.
Not quite. But there definitely are options that you’ll want to look at and consider before deciding to go with pet insurance, and we’re going to explore those today. Do you have pet insurance, Sean?
I do not. Though, I do have a membership to a vet care service that provides essentially preventative care. I pay around $70 a month for my dog Pepper and closer to $50 for my cat Argus. The price is kind of steep, but both pets have garbage teeth and need annual cleanings, which is included in my membership. I don’t know. I guess it’s kind of worth it. But I do always wonder whether I should switch to pet insurance, especially before my pets develop some preexisting condition that insurance wouldn’t cover. What about you, Ronita? Do you have insurance for Mo?
So we do. Mo has a lot to say. He’s happy with his pet insurance. We knew we were getting a terrier, and there’s a lot of energy, there’s a lot of curiosity, so we thought we’d look into it sooner, basically as soon as we decided to get Mr. Mo. But really what helped us decide on pet insurance is that my husband’s work provided a discounted premium rate, and that, the money, and the costs, and the discounted rate essentially cinched the deal for us. But while almost 87 million households owned a pet in the U.S. in 2023, only 5.7 million pets were insured, according to the Insurance Information Institute. And those pet owners paid $3.9 billion in premiums. And dogs are insured far more than cats. It’s almost 80 to 20%. Do you want some more pet insurance trivia, Sean?
Oh, yeah. I’m all about the pet trivia.
Okay. Fun fact, the very first pet insurance policy issued in the U.S. was back in 1982 for Lassie, the actual TV star Lassie.
Wow. I mean, why wouldn’t you? You do have to protect the talent after all. Also, additional fun fact about Lassie, she has a star on the Hollywood Walk of Fame. All right. Well, listeners, we want you to bark and meow at us with your stories about your pets and what it takes to keep them in kibble. What are you sacrificing in your budget to have an animal? Do you have pet insurance? We want to hear any and all pet stories over the course of this series. To share them, leave us a voicemail or text the Nerd hotline at (901) 730-6373. That’s (901) 730-NERD. Or email a voice memo to info@example.com. And if you have any audio of your pets, all the better. Ronita, where do we start today?
Today we’re talking with fellow Nerd Sarah Schlichter, who is an expert in all things pet insurance.
That’s coming up next. Stay with us.
Sarah Schlichter, welcome to the Smart Money podcast.
Hi, Ronita. Thanks so much for having me.
We’re very happy to have you here. Now, first question, do you have any fur babies?
Yes, I do. I have a rescue lab named Sylvie. She’s very sweet. She’s actually sleeping on the sofa behind me, and so hopefully we don’t get any deliveries and she doesn’t bark through the interview.
Oh, I love that name, Sylvie. That’s cute. We have you on because you are our NerdWallet pet insurance expert. So let’s start from the beginning. And just tell us, what is pet insurance, and how does it work?
Pet insurance is a bit like human health insurance in some ways. It can help you pay your vet bills if your pet gets sick or hurt. Like human health insurance, it often has deductibles and copays. So you should know it’s not going to pay 100% of your pet’s medical expenses, but it can come in handy if something major goes wrong, like God forbid your dog gets hit by a car and needs surgery or something like that. But there are a few key differences between human health insurance and pet insurance. One nice thing about the pet version is that there’s usually no in-network or out-of-network stuff. With most plans, you can just take your pet to any licensed vet. That’s nice. But not as nice is that you’ll generally have to pay the full bill up front and then submit the receipt to your insurance company for reimbursement. There are a small handful of pet insurance companies out there that can pay your vet directly, but in most cases you’ll initially have to foot that bill.
Can you explain the different types of pet insurance plans available?
Sure. The most common type of pet insurance plan in the U.S. is called accident and illness insurance, and it’s just what it sounds like. It’ll reimburse you if your pet is accidentally injured or if your pet gets sick. There is another alternative that’s cheaper and also less common, and it’s called an accident-only plan. That can cover things like a broken leg or a snake bite, but it’s not going to help you if your pet gets cancer, diabetes, allergies, basically any illness. Neither of these plans is going to pay for routine care, so they’re not going to reimburse you for your pet’s annual checkup or a rabies vaccine or even a spay or neuter surgery. Some folks think it’ll cover that, but it won’t. So if you do want those things covered, you want to look for a wellness or preventive care plan, which many companies will let you add to an accident and illness plan. These work a little bit differently. They usually have set reimbursement levels for certain services, so they might pay you up to $50 for a checkup or up to $150 toward your dental cleaning.
What are some common misconceptions people have about pet insurance?
One big one is that you can wait to buy the pet insurance until something goes wrong. For example, say you discover a lump on your dog’s side. You take him to the vet, and unfortunately it’s cancerous and the vet said he needs surgery. You might think, “All right. Well, I’ll just buy pet insurance to pay for the surgery.” Unfortunately, insurance is almost never going to cover problems that your pet had before you bought the policy. These are known as pre-existing conditions. You’ll see them excluded on just about every plan. For the dog that has the cancerous lump, you can still buy pet insurance and it’ll pay for any new problems in the future, but it’s not going to pay for that surgery.
Yeah, that’s
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