Updated May 21, 2019
There are 9 common mistakes people make when deciding to buy Pet Insurance. Do you know what they are?
1.Viewing Pet Insurance as an Investment
It is often stated that Pet Insurance is not worth the cost or that you will pay out more in premiums over the life of the policy then you would if you just paid the claims yourself. While this can be true, pet insurance should be looked at as a safety net, not as an investment. The reason most people choose to buy Pet Insurance is to ensure that they have the funds they need when they need it.
Let’s say you decide to save the $30 monthly premium instead of buying insurance. At the end of 3 years you will have saved $1,080. Great! But what if your beloved pet becomes sick during those first few years and the cost is greater than what you have saved. Will you have the money to cover the cost? These days cancer treatment can cost between $5,000 and $10,000. If you are not in the position to pay the cost out of pocket, buying pet insurance is the smarter way to go.
Tip: Not sure if pet insurance is really worth the cost of the plan? Read Is Pet Insurance worth it? to find out more.
2. Not Doing Adequate Research
Too often people will pick the first pet insurer they come across thinking that all pet insurance plans are the same. They may look alike on the surface, but once you start researching what is covered and how claims are paid you will find that there are good plans and bad plans. Make sure you do your research and avoid buying a bad plan.
3. Not Reading the Policy
Never sign up for a plan without completely reading and understanding the policy first. Make sure you know and understand the details of the policy that govern your benefits. Finding the company’s policy document on the plan’s website can be difficult. It is often buried within the webpages and tends to reside in different locations for each insurer. If you can’t find the policy document on the company’s website, talk to a customer service representative and ask them to email you a sample policy document. If you have any concerns or don’t fully understand what is written, ask questions.
4. Not Asking Questions
Most pet insurance companies offer you the convenience of enrolling online. The issue with doing this is that you may not truly know what you are buying before you click the enroll button. The slick marketing you see on pet insurer’s websites often lull you into thinking you know all you need to know. This is often not the case. Even if an insurance company offers a discount for enrolling online, you are still better off talking with an agent and asking lots of questions about how the policy works before committing.
When speaking with the agent, try to get everything in writing and take your own notes. Make sure to write down the name of the person you spoke with, the date and time of the call.
Remember you can always go back and enroll online later.
5. Not Understanding the Exclusions Under the Plan.
Make sure you understand what is and is not covered in the core policy. Thoroughly read the exclusions clause. There may be surprises. The exclusion clause is sometimes a separate document from the policy. Also many pet insurance companies will offer riders (plans that cover items not included in the core policy for an additional cost). You may be able to get riders for anything from wellness care to holistic care to cancer care. Unless you read the exclusion clause you may not realize you need a rider.
6. Not Understanding Why, When and How Much Rates Change
Rate increases are probably the number one reason people are dis-satisfied with their pet insurance plans. Some companies increase premiums or limit coverage as your pet ages or if you file claims. Some companies’ rates adjust annually due to broader factors such as the cost and usage of vet care in your area or actuarial data based on your pet’s breed. Most, if not all plans will increase the cost over the lifetime of the plan, but make sure you understand why, when and how much your rates will increase.
7. Trying to Get Insurance When a Pet is Already Sick.
Pet insurers are not in the charity business. They want you to sign up for pet insurance while your pet is still healthy so that your premiums will cover for any future costs. Not only will they not pay for a current sickness or accident, they will not pay claims on any conditions that started prior to insuring your pet. This includes conditions that you may not have known about.
8. Not Understanding How Pre-existing Conditions are Determined
This is probably the least understood clause in all pet insurance plans. This is due to the fact that it is not clearly stated and that it is handled differently by pet insurers. All plans have pre-existing condition clauses due to adverse selection. In this case adverse selection happens when a pet owner purchases coverage knowing their pet already has a health problem. However some plans abuse the pre-existing condition by denying claims for conditions that carry over from one plan year to the next even though the pet has been continuously covered or by claiming the condition started prior to the plans start date.
9. Picking the Lowest Premium
You need to be very careful when picking the lowest premium. Low pricing is sometimes used to lure buyers into purchasing a plan that does not pay out well or is filled with exclusion clauses. Having a low cost plan does not help you in the long run if they deny all your claims.
For more tips on buying pet insurance check out my other posts
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