This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.
My cat, Monster, died two weeks ago after a struggle with cancer. Monster followed me home one day when I was 17; he was with me through every heartbreak, every move, job, boyfriend, and roommate. I’m grateful for the fifteen years we had together, but I miss him. I’ll miss him always, I suspect.
Monster’s death left me with a tough decision: Should my girls get kittens for Christmas? We’d been thinking of getting the kids kittens for awhile, but held off because Monster was old and frail. I didn’t want a pair of kittens to terrorize him. While it felt too soon to me to get new cats, my older daughter asked very gently if she could get a cat of her own “a few weeks after Monster died”.
When my other daughter’s preschool held a holiday pet adoption & craft fair, the deal was clinched. We came home with two kittens.
The kittens came with a brochure for pet insurance. I’ve never had pet insurance, and I wondered if a policy might be worthwhile, especially for young cats who need extra care and appointments, as well as vaccines.
Veterinary care gets expensive fast. I tapped out my modest $1,000 emergency fund paying for Monster’s end-of-life care and cremation costs. I have never been so grateful for my new financial skills as I was when I was able to write that check without worrying about where the money would come from.
Between paying for my elderly cat’s illness and adopting two kittens, vet bills have been on my mind a lot. So I looked into my pet insurance options. I decided to “self-insure” my pets by putting more money into my emergency fund, instead of buying an insurance policy to cover their medical costs. Here’s why:
- Pet insurance costs about $1 a day. That’s $365 a year. My cat’s medical care typically costs about $300 a year. I can readily save that money myself.
- Routine care isn’t covered. While an accident or serious illness could suddenly befall my cat, routine care is the bulk of expenses I have ever paid for a cat. It’s true that a sudden illness could escalate those costs dramatically. This just happened to Monster as he was dying. After 15 years of cat tending, though, I have a decent sense of how much it costs on a day-to-day basis, and how common these expensive accidents or illnesses really are.
- Money in my emergency fund is more flexible. I can use those dollars to pay for a surprise vet bill or a blown radiator on my car or a washing machine repair. The money isn’t dedicated to a particular cause, it’s available for whatever emergency life throws my way.
Of course, emergencies can pile up, making the flexibility of emergency funds a moot point. That’s a risk of going it alone. For example, shortly after my cat died, I developed a problem with my hands that needed intensive medical care.
For an insurance policy to seem worthwhile to me, it needs to be cheap, easy to use, and cover routine expenses. AAA is a great deal for me, for example, because my annual membership costs about what one service call does, and driving a used car I use it every year. If they didn’t cover routine roadside incidents like flat tires, I’d drop it because that’s the bulk of what I use them for.
It’s almost always better to self-insure your stuff (and your pets) than to buy a warranty or insurance policy. The two big exceptions in my life are home and health insurance. I can’t reasonably squirrel away the cash to replace my home, and a catastrophic health event can set me back hundreds of thousands of dollars.
Health insurance also covers my routine care. I don’t get my money’s worth out of my health insurance every year, but I always have my care covered. My insurance premiums are the only significant cost I pay for health care. They pay for 5 physicals, any number of sick care appointments, and the various specialists my family members see.
Pet insurance would only cover major medical incidents. Cats don’t, in my experience, have as many of those as people. In 15 years I’ve paid for one surgery and two illnesses with my cats. That doesn’t suggest a lot of use for my pet insurance policy. If I’d paid insurance premiums all those years, I’d have paid over $4500. The cost of major medical bills has actually been less than half that.
Any insurance or warranty program works because most of its customers pay more in premiums than they consume in services. That’s how an insurance company makes money. Before giving them some of yours, think very carefully about what kind of customer you are. Will you be paying more in premiums than you get in service? Or the other way around? Of course it’s impossible to know what the future will bring, but here are some good questions to ask yourself:
- Can I save this money myself? Be honest. Do you have the income and the discipline to save for an emergency. You want the answer to be yes, but wishing doesn’t always make things happen. If you don’t have the savings or a good way to build them, start working on developing those skills. Some things you just can’t self-insure, but many you can if you’re diligent.
- What kind of consumer are you? For example, an outdoor cat is going to be more prone to accident or illness than an indoor cat. That might alter the equation on whether or not pet insurance is worthwhile to you.
Whatever you decide, I hope you never have to use your insurance or emergency fund to pay for a sick or injured animal. May all of your pets live long, healthy, happy lives.