When you adopt a pet, you commit to caring for a living being for several years. And whether you like it or not, your pet could put a strain on your finances, between paying for food, supplies and healthcare.
You will often hear that having pet insurance is essential to cover the latter. Without pet insurance, you could end up paying thousands of dollars if your pet is injured or becomes ill and needs extensive care.
But what if you have a lot of money in your savings account? Can your emergency fund replace a pet insurance policy?
Having coverage could benefit you even if you have money in the bank
The purpose of having pet insurance is to ensure that you are able to cover your pet’s medical needs without resorting to debt – and to ensure that you are not forced to forgo a life-saving treatment for your pet due to lack of funds. So if you have a very solid emergency fund, you might assume that you can avoid purchasing pet insurance.
Let’s say your pet needs a $7,000 surgery. Knowing that 63% of Americans don’t have the cash reserves to cover an unexpected $500 expense, according to a recent study Secure backup datathe typical pet owner could find themselves in a difficult situation without insurance in place.
But what if you have an emergency fund of $15,000? In this case, you could invest to cover this operation while keeping about half of your savings.
Now, it’s true that if you have a good amount of savings, you can technically get by without having pet insurance. But you should be aware that your pet may experience several costly problems in a relatively short period of time. And without insurance, you risk depleting your savings, leaving you with insufficient funds to cover a non-pet-related emergency.
To return to our example, let’s say your pet needs a $7,000 surgery, then six months later gets sick and ends up in the hospital with a $5,000 bill. Suddenly your $15,000 emergency fund is reduced to $3,000. If, soon after, you need to replace the heating in your home for $5,000, you won’t have enough money to cover it.
It’s worth shopping around for pet insurance
Even if you purchase pet insurance, it’s still important to have a nice savings cushion to cover the cost of your pet’s care. An insurance policy usually doesn’t cover 100% of the bill when you face medical bills – pet insurance works by partially reimbursing pet owners after paying for care (depending on your coverage). So you may have to shell out the money yourself and wait to be reimbursed.
But don’t settle for your savings in the absence of pet insurance when a policy might turn out to be more affordable than you expected. Progressive says the average cost of pet insurance covering a dog’s accidents and illnesses is $508 per year. For a cat, it’s $302.
This doesn’t mean your costs won’t be higher. But they could be lower. If you are shopping, you can compare prices with those of best pet insurance companies and see which policy suits you best.
All in all, it’s good to save money when you have a pet. Damn, it’s good to have savings in general. But don’t assume that having savings means you don’t need pet insurance.
You’ve probably worked hard to build up those cash reserves. And you shouldn’t put yourself at risk of them disappearing when your pet’s coverage may be more affordable than you think.