I Think Pet Insurance Is a Waste of Money — Here’s Why

I’m an animal lover. I used to have two cats and now have a 3-year-old chocolate lab. These four-legged friends are a part of my family. So, of course, I’ll do whatever I can to keep them around. I also know that they can be adventurous (especially a dog) and get themselves into trouble from time to time — which could mean some hefty vet bills in the future.

I have already had my fair share of outrageous vet bills for the cats. I paid out-of-pocket and continued on with my furry little buddies, happy for them to be OK, even if it meant a slightly lighter wallet.

Click to read more about the cities where it is cheapest to own a pet.

Did getting pet insurance ever cross my mind after coughing up the money? No.

Honestly, I would rather take money out of my emergency fund to pay for unexpected vet bills than pay monthly premiums for pet insurance. The amount I would pay per month makes me question who benefits from the coverage? Me and my pets, or the insurance company?

According to the site ValuePenguin, the average cost an owner pays for pet insurance is $43.14 for dogs and $26.77 for cats. Some insurance plans are over $100 a month. Getting a policy is similar to getting health insurance for a human. Your pet’s age, breed, where you live and the type of coverage you get is all factored into the insurance rates. Older and larger animals will have some of the highest rates. That seems like a lot of money to be paying towards pet insurance.

If you compare those premiums to the average prices of some vet bills, the monthly payments may not seem that high. The website Petplan reports that the average bill for a pet that swallows something they shouldn’t have is about $1,755, and joint-related bills average at $3,480. Further, according to American Pet Products Association, the 2017 sales in vet care were $17.07 billion and estimated to reach to $18.26 billion in 2018.

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Even with those numbers, I’m still not convinced I need pet insurance. I understand that a vet bill is not cheap and requires full payment at the end of your visit. But at the end of the day, I think it is the insurance company that benefits way more than I would if I got pet insurance. I don’t think pet insurance would even exist if they didn’t gain something out of it.

Say I got pet insurance for my dog. Chocolate Labs are big dogs, so I’d expect to pay more. For easy numbers, let’s say my premiums are $50 a month. That is $600 a year. The average lifespan of this breed is about 12 to 13 years. Let’s say mine will be around for another ten years. I’m looking at paying $6,000 in total for insurance.

Now, if I take that $50 a month and put it into an investment portfolio, what would my outcome look like? Say the average rate of return is five percent as a conservative estimate, with interest compounding annually. If I invest $50 per month at that rate for ten years (the length I would have pet insurance for), I’m looking at having roughly $7,600. That is a $1,600 difference. So, putting that money into an investment seems like a no-brainer.

To me, pet insurance is a gamble. Will the monthly rates end up costing me more in the end than all the vet bills combined? That’s not a game that I want to play. That is why I have my emergency fund to tap into if my furry friend decides to do something crazy.

When I got my dog, I knew that I would eventually have to pay some vet bills. You can’t expect to have a pet and not pay for it. With that thought in mind, I’ve instead put those monthly premiums into my emergency fund or investments. By going that route, I’ll have more than enough to cover any pet-related expenses.

Click through to read more about tax breaks you can get as a pet owner.