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November 13, 2012 at 6:00 AM

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Part 2: Shopping for Pet Insurance, a vet's view

ziggy.jpgVeterinarian Carol Burke examines Ziggy earlier this year in Bisbee, Ariz. Photo by Beatrice Richardson / Sierra Vista Herald

gemarmug.jpgDr. Jerald Gemar, a retired vet who chairs the Washington State Veterinary Medical Association's finance and insurance committees, answers questions about pet insurance in the second of a four part series.

Question: How should I determine what I really want in an insurance policy? Some plans cover routine office visits, some do not. Some cover only accidents. Some cover everything. Some offer mix-and-match options. What kind of philosophical decisions must an owner tackle when deciding on insurance?

Answer: There is no simple answer for everyone. Several factors should be considered:

1. What is my financial situation? How much can I afford for premiums? Can I easily afford the normal, preventative-maintenance costs but not the unexpected serious-illness or injury costs?

2. What breed do I have and is it subject to chronic skin problems, eye problems, cancer, etc.? If so, pet insurance may be well worth it.

3. Is your pet a true member of the family that you would not want to part with no matter what the cost? Or is it only another novelty that you got for the children and would find it easier to replace than to find a way to pay for its care?

Q: How would you recommend going about shopping for insurance? Is there a check list?

A: A list of a few of the most important things to consider:

1. Does the insurer charge more for your breed?

2. Are there age limitations, young and old?

3. If you have more than one pet, does it give a discount for multiple pets?

4. Make sure the company you decide on provides you with what you want -- accident, illness, preventative care, etc.

5. Review the deductibles, copay and caps.

6. Are genetic and hereditary problems covered?

7. Does the insurer offer extra options (wellness, drugs, cancer treatment, etc.)? Do you have to pay extra, or are they included?

8. How long has the company been in business?

Word of mouth is still one of the best sources of information, so ask your friends or your veterinarian what experiences they have had in dealing with pet insurance.

marley.jpgMarley, owned by Richard Vogel, wears a cast for a broken toe last year in Los Angeles. Photo by Richard Vogel / The Associated Press

Q: What elements of a policy are most important? Less important?

A: The most important elements:

1. What things are excluded from being covered?

2. What is the age range on the premium charges? (Does it go up yearly or does it go up based on a wide age range. For example: 1-5 years of age, 6-10 years and over 10.)

3. What is involved in submitting a claim, and what is the company's timely payment history?

4. Does the policy I select, provide the coverage that is most important to me and what I can afford?

Less important: Most people can deal with the more routine preventative- and wellness-care costs. It is the high cost of the unexpected illness and injury that is more important.

Q: Benefit schedules vs. flat percentage coverage. What are the pros and cons?

A: Many carriers have set benefit schedules for all potential conditions and may be desirable. This spells out in black and white how much is going to be covered up front for each individual condition.

A flat percentage may be to your advantage if you live in an area in which the average charges are above normal.

Q: What kind of payout caps do I need to be worried about?

A: Extensive surgeries (total hip replacements, multiple and complicated fracture repair following injury, gastric torsion, etc.), treatment for cancer, chronic kidney failure, a specialist's service and cataract surgery are a few of the conditions where you may likely exceed the cap maximum.

Here again, you need to look at the maximum coverage for these conditions and compare them to what the average charges for these procedures are in your specific area.

Q: How often are policies typically renewed, yearly, monthly? Why is this an important consideration?

A: Most policies have an annual renewal anniversary date, but as long as you keep paying the premiums, you don't have to actually renew each year. Premium payment typically is monthly.

The longer the renewal period, the better. Most premium changes occur at the anniversary date, so the longer you can tie into a set rate, the better.

Also for those policies that have a set deductible for the entire policy term, if you have several claims in that policy period, the longer the length of the contract, the better.

Q: Under what circumstances can a client be dropped?

A: To my knowledge, lack of premium payment or false information submitted when you apply for the coverage are the only two things that would validate the carrier canceling the policy.

If false information had been submitted upon application, it may not cancel the policy, but it could affect what benefits you would receive, such as a pre-existing condition, which would not be covered.

Q: Some plans allow me to choose the deductible and caps. What kinds of things should I consider when deciding, say, a $50 vs. $500 deductible?

A: Probably, the first thing you need to consider is your financial situation. The higher the deductible and lower the cap, the cheaper the premium.

Also take into consideration the breed of pet you have. Does the breed have a history of chronic problems? If so, you should consider a higher cap.

Your home environment is important. Will your pet be totally confined to your house and fenced yard or will it be out where it is subject to being hit by a car or attacked by another animal?

What has been your past history with pets? Are you a responsible pet owner and practice good preventative care and believe in a wellness program?

Do you travel a lot and take your pet with you, subjecting him or her to being around a lot of other animals or traveling to areas that have higher incidence of some diseases?

Q: What won't most policies cover?

A: Very few, if any, insurance carriers cover pre-existing conditions. Many will not cover certain hereditary conditions or conditions that are very common in certain breeds. Congenital conditions are also not covered by many companies.

Q: What if my dog gets sick and runs up a huge bill over the course of the animal's illness -- more than $10,000, for example. What prevents the insurance company from dropping me?

A: Pet insurance is not like car insurance, where the number of claims and costs to the insurance company dictate the premiums and the company has the option of dropping you.

As long as you are current on your premium payment, the carrier will pay up to the maximum stated in your policy and then payment stops.

If it is a policy that has a lifetime maximum, then any coverage -- and your premium -- is stopped when you reach that maximum number.

If you have an annual maximum that you've reached for the year, as long as you continue to pay your premiums, you start with a new deductible and new maximum the next calendar year.

Q: How can I find out how often and under what circumstances the premium is raised? If I have a sick dog, will my premiums typically soar?

A: Once you take out the policy, age should be the only thing that will change your premium.

Does it change annually or every three to five years of the pet's life? This will be spelled out in the policy.

All the companies I am familiar with list what the premium is for that age range.

Over time, premiums may likely change, but they change for everyone. Even if your dog has had large claims, the company will not single you out and raise only your premium.

You would have to check the past history of the company as to how often they have raised their premiums.

Dr. Jerald Gemar received his veterinary degree from the University of Minnesota in 1965. He joined Alderwood Veterinary Hospital in Lynnwood. He retired after 41 years and has been doing relief veterinary work since then. He has been active in local, state and national veterinary associations, including serving as president of the state Veterinary Medical Association (WSVMA) . He chairs the WSVMA's finance and insurance committees.

Monday: Bellingham animal-law attorney Adam Karp
LINK Read our previous post here

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