Consumer Reports: Pet Insurance is Bad Investment

Life With Dogs is reader-supported. We may earn a small commission through products purchased using links on this page.

While the following study does not compare all available insurance plans, it is enough of an eye opener to warrant consideration. We’ve seen this topic debated frequently, with many arguing that it’s wiser to regularly save money in an interest bearing account to be applied to veterinary expenses as required. They may be on to something.

Consumer Reports recently analyzed premiums vs. payouts from ASPCA Pet Health Insurance, 24PetWatch QuickCare, VPI and Trupanion, whose combined market shares account for more than 90%  of the pet insurance market. In general, plans were found to cost more than they would ever pay out.

That said, those who prefer the peace of mind that comes with having a policy in place are urged to keep the following in mind:

  • Read the fine print. Twice. Pay special attention to co-pays and deductibles that can add up quickly.
  • Find and understand exclusions, which vary widely by provider.
  • Compare lifetime reimbursement caps.
  • If you decide to save money on premiums by choosing only catastrophic coverage, select a high deductible for lowest rates.
  • Skip most riders unless you have a strong reason to believe you need one.
  • Keep an eye out for premium increases, which can be frequent and/or substantial.

In the final analysis, only you can decide if pet insurance is right for you. While many argue that a savings account and a focus on preventative care are all that you need in order to manage pet health care costs, Consumer Reports did find that some of the plans offered had the potential to pay out slightly more than the cost of premiums if dogs suffered multiple, complex health issues. If the idea of a big vet bill scares you, insurance may be your answer, but by all means, shop around and choose wisely.

15 thoughts on “Consumer Reports: Pet Insurance is Bad Investment”

  1. I have a 4 and a half year old English Bulldog and we started out with VPI and quickly discovered that they would not cover the health issues that we were concerned about. We quickly switched to 24Hour PetWatch. At age 4, she was diagnosed with cancer, and we were so thankful that she was insured. Her policy has more than paid for itself and knowing that we had the peace of mind to make decisions on her health based on what was best for her and not because of the finances. I would recommend insurance to anyone, but as the article stresses, make sure you read the fine print and pick the best policy for you and your animal.

    • I have to agree with you Erin. While it may not be for everyone, it certainly helps with something catastrophic such as cancer. We have a Malamute who is a yr and a half now. He had his first grand mal seizure while we were trying to decide which insurance to go with. So needless to say, we could not get coverage after that. He has cost us a little over $25,000 in the year and 4 months we have had him. Our oldest boy (12 yr old Malmute/GSD) had a lung tumor removed in March and is now goig through chemo. No insurance on him either. We have spent close to $8,000 on him in the last 5 months.We’ve maxed our credit cards, exhausted our savings and had to increase our credit line twice. Had we had insurance, it wouldn’t have hurt us near as much (financially speaking, of course). Just make an informed decision and don’t just “follow the masses” because it seems to be the “it” thing. Will everyone need the insurance? No… but for those of us who do, it’s a good option. I will certainly have insurance on the next furbaby I have.

  2. I am with VPI now but it looks like I’m heading this way too. My cat developed a skin issue and the cap is $150 per year. My first appointment was $130. Where does that leave me? That’s crazy and useless.

  3. I have a policy with VPI. I almost cancelled this year because of this very reason…. it’s more cost effective to put the money in a checking or savings account dedicated to your animal to cover bills. But low and behold my Otto needed surgery this year… the plan more than paid for itself. So this year, I will keep the policy. Actually the past two years it’s paid for itself. So for now I will keep the policy.

  4. I think people fall for the touchy-feely ads in magazines and some even on TV now. First – regarding claims, remember that you have to deal with those infamous types called “adjusters.” So, why are they called “adjusters”??? Because they are paid by the insurance company to “adjust” the claim in favor of the insurance company and not in favor of the policyholder. Second, when will people realize that this country is going down the toilet for medical care and THE biggest culprit is insurance companies? Why would they think pet insurance would be any different – or worse, because pet insurance doesn’t even have the marginal regulation that people-health insurance does!! Finally – there is not a single pet insurance company out there (I know – I looked at ALL of them) that is operating on anything other than a “reimbursement” basis. In short – you pay the vet, the insurance company pays you – IF they feel like it and WHAT they feel like paying. Don’t like it? Can YOU afford an attorney at $300-$400 an hour to fight that battle for you? And don’t forget the five figure retainer while you’re at it! So let’s say you get to the animal emergency after-hours clinic and you say that’s okay I can pay here’s my insurance. Two words: RUDE. AWAKENING. Because that clinic will want your dollars, a LOT of your dollars, up front before they will even look at your pet. They do not bill your pet insurance company and frankly could give a rat’s patootie whether you have insurance or not – in their view, they get paid at the time of service and what you do with insurance is not their problem. So as long as you’re saving up for pet emergencies you might as well take that monthly premium and stash it in your savings account. (And don’t forget to keep cash on hand for emergencies because many emergency after hours clinics will NOT take a debit NOR a credit card because they do not want to pay the discount banks charge service providers. Cash only and you’d better not think you can leave your sick/bleeding/dying pet at the clinic while you run to the cash machine because the clinics will not allow that. Sad but true: only cash on the barrelhead means anything these days!

    • Very insightful. Thank you. I have been in the medical field for over 30 years and I can tell you that I am very distrustful of insurance companies. They are in business for a reason. And the patient is almost always on the losing end of it. Maybe not today, under your current circumstances, but eventually you will be. I have seen people NOT recieve specific curative treament because of funding. It is wrong but it happens. There is no reason for me to believe it would not happen with our fur companions as well. And for you GREYHOUND owners out there: If your hound needs chemotherapy, and yor dog is a retired racer then there are organizations/facilities that will ship your chemo to the Vet. free of charge.I know this first hand.

  5. I had the same experience with Trupanion. Not only did the premium go up, it doubled! And I had made not one claim during the one year I had the insurance. I went with another company (Purinacare) — lower premium, better coverage. I hope they don’t do the same thing come renewal time.

  6. I have had Pet’s Best insurance on my second generation of dogs now. I get the catastrophic coverage. They have been incredible to us every time. I switched to them from VPI and have never considered going back.


Leave a Comment