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Why not be your own pet insurance company?

It’s midnight and you’re at the pet ER with your dog. Turns out she broke her back leg and requires orthopedic surgery. The surgery will cost $2,500 with hundreds of dollars in aftercare and physical therapy. Sound familiar or scary? That’s why the pet insurance business is one of the fastest growing pet-related industries.

How pet insurance works
Pet insurance companies are not charity groups looking to help you in your time of financial need. They are profitable businesses. The reason they are profitable is because they know that the risk of a payment to pet owners is less than the money they receive in total monthly premiums. They also know that the chances of their pet needing extensive care when they are young are so low that they will have paid more than enough in monthly premiums by the time they need to pay in the pet’s later years. Why not take advantage of the same facts? Be your own insurance company and keep unspent money.

pet savings accounts
Quality pet insurance policies range from $35 to $75 per month, depending on coverage and deductibles. Why not put that same amount in a savings account for your pet(s)? In a year the account would be worth $420-900. According to pet ownership statistics from the American Veterinary Medical Association, the average household spends just $378 annually for dogs and $191 annually for cats on veterinary care. Your account would easily cover these expenses.

Throughout your dog’s life, the account would grow to ensure care in the pet’s later years. If he treated annual exams and vaccinations as “a deductible” and paid for them out of pocket instead of the bill, especially during your pet’s first healthy years, the bill would be even higher in later years.

Another way to protect your pet savings account in the early years is to consider adding a “catastrophic” pet insurance policy. These are less expensive than core policies and protect against serious injury or illness. Eventually, the policy can be canceled as the savings account grows.

Consumer Reports’ review of pet insurance policies agrees that self-insured pet plans are superior. The odds are in your favor that your pet savings account will have money left over after your pet dies. You keep the money that would have been spent as monthly premiums and profits for the insurance companies. Feeding a quality diet and maximizing your pet’s health will also minimize veterinary bills and increase the value of your pet savings account.