One of the most frequently asked questions about pet insurance is "Is it worth getting for my pet?" I'm actually surprised by how many consumer advocacy groups1 and financial experts tend to look at pet insurance like it is an "investment." They should know better.
Here's their logic. Most people who purchase pet insurance, or any insurance for that matter, won't get back more than they pay in premiums. That's true; otherwise insurance companies couldn't continue to operate. Therefore, they recommend starting a savings account to pay for your pet's healthcare expenses instead of buying pet insurance.
However, some people will get back more than they pay in premiums - much more.
In order to know if pet insurance will be worth it for you, you'll have to answer this question, "Are you one of the 'most' or 'some' people?"
The fact is, you have no way of knowing ahead of time.
Pet insurance (chosen wisely) transfers the risk of significant financial loss from the pet owner to the insurance company. It is bought for the unexpected and expensive accidents and illnesses that could possibly happen to their pet. It would take years for most people to save enough money to pay for such incidents.
Tom Collins, a writer for BlogPaws, put it this way, "You're buying protection against a disaster you hope will never happen and the peace of mind you'll have in knowing that, if it does, your pet's health - or even survival - will not depend on how big your savings account has gotten."
If you understand what insurance really is, you know that it isn't an investment and you realize that you may not get back more than you pay in premiums, but you're really purchasing "peace of mind" should the unexpected and expensive happen.
As a veterinarian, I can tell you that pets die everyday, not from their injuries or illnesses, but because the pet owner cannot afford the care it would take to restore them back to health. This is really the reason Dr. Jack Stephens and some of his colleagues started VPI in 1982 - to hopefully one day end "economic euthansia."2
When presented with a seriously ill pet that requires hospitalization for diagnostic testing and treatment, I can't always tell the pet owner up front whether their pet will survive, and if so, how long it will take to respond to treatment and fully recover. Therefore, costs of care in these situations are unpredictable. Pets sometime develop secondary complications of their primary illness that also have to managed.
A pet insurance policy for their pet - again, chosen wisely, can help pet owners bridge the gap between the cost of the care their pet requires and what they can afford to pay out-of-pocket themselves. This, in essence, is the purpose of pet insurance.