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For many pet parents, it’s a tough choice: should you get pet insurance, or should you rely on a savings account set aside for your pet’s health expenses?
The bad news is there’s no way to know for sure which one will save you more money over the course of your pet’s life—it just depends on what kind of health complications your pet runs into. The good news, though, is that it’s possible to make an educated guess about which one will be most comfortable for you, your pet, and your finances. Get started with a free quote below from one of the top coverage providers before we break down the advantages and disadvantages of each.
Pet Savings Accounts Balance Flexibility and Risk
A pet savings account is a fund you set aside exclusively to pay for your pet’s care. Some pet parents designate it as an emergency-only fund for unexpected health issues, while others use it for any kind of vet expenses, including routine check-ups and wellness care.
Advantages
- You’ll never spend more than you need to; if your pet doesn’t end up using the money, it still belongs to you
- A pet savings account is flexible; you can pay into it—or not—whenever you want
- You avoid the work of claims processing, renewals, and plan selection
Disadvantages
- It takes a long time to build up a savings account; your pet could run into trouble before you’ve built up enough in savings to afford care
- It’s easy to drain a pet savings account when other emergencies crop up, leaving you financially exposed in the event of your pet’s accident or illness
- Expensive optional treatments and therapies can remain cost prohibitive
Building savings takes time, and until you do, your pet is vulnerable
One of the biggest problems with a pet savings account is that it can take time to build, which may leave you vulnerable early in your pet’s life.
For example, if you start at zero and contribute $100 per month, you’ll only have $1,200 in your pet savings account after a year, and treatment for an accident (think sock swallowing, chocolate ingestion, or a broken bone) could easily exceed that.
You can, of course, start with a larger contribution to your pet savings account—but treatments for some kinds of accidents and illnesses can cost upwards of $10,000, and there’s no rule that your pet can only have one health crisis per year.
If at any point your pet’s treatment requires more money than you have in your pet savings account, you’ll either have to draw the funds from elsewhere or forego treatment for your pet.
Finally, some pet parents like the idea of a pet savings account accruing interest—but the reality is that unless you have substantial sums in your account, you’re unlikely to make enough to meaningfully offset the cost of your pet’s treatments.
It’s easy to accidentally drain a savings account
Accidents happen—and not just to our pets. A pet savings account is vulnerable to being used for other crises, like a car that won’t start or a broken window. Even with the best of intentions, it’s hard to guarantee that you’ll never touch the money you set aside for your pet, which can leave you in a jam when they get hurt or sick.
Expensive optional treatments and therapies can remain cost prohibitive
Having to pay for everything out of pocket can sometimes be limiting: optional care like quality-of-life surgeries, behavioral or physical therapies, and alternative treatments can feel financially impossible when they come at the expense of your pet emergency fund or personal savings.
A good pet insurance policy, by contrast, might cover 70% to 90%—or even 100% in some cases—of the cost of treatment. That might change your math on whether it’s worth it to pursue non-urgent kinds of medical care.
Pet Insurance Offers Security at the Cost of Guaranteed Premiums
Pet insurance works like a modified version of human healthcare: You pay monthly premiums, and in exchange, your pet insurance provider reimburses you for your pet’s eligible expenses at your policy’s reimbursement rate (once you’ve met your deductible).
In short, unlike a pet savings account, pet insurance essentially guarantees that you’ll pay regular small amounts of money to reduce the cost of future—and potentially much larger—veterinary expenses.
Advantages
- It can enable you to say yes to expensive life-saving care that your savings couldn’t accommodate
- Pet insurance can offer the freedom to pursue treatments and therapies without worrying about their price tag
- Pet insurance often comes with benefits, like 24/7 vet hotlines (see Spot)
Disadvantages
- You’re guaranteed to pay money on a schedule; you can’t take a break from premiums
- You may end up spending more for peace of mind than you get back in reimbursements
- Pet insurance gets more expensive as your pet gets older
Pro: Pet insurance can make life-saving care possible almost immediately
Being able to afford expensive life-saving care is one of the most common reasons pet parents choose pet insurance over a pet savings account.
Unlike a designated pet fund, which can take years to build, pet insurance can help you with eligible vet bills almost immediately—as soon as you clear your plan’s waiting periods.
For example, depending on the deductible, reimbursement rate, and limits they’ve chosen, a pet parent with a good pet insurance plan might have paid their provider only a few hundred dollars before insurance would cover most of a $5,000 treatment.
By contrast, a pet parent with a pet savings account would be on the hook for the full cost of treatment—and if their pet is young, they may not have had enough time to build up their savings.
Pro: Pet insurance can bring quality-of-life treatments inside your budget
For some pet parents, pet insurance is about feeling empowered to say yes to optional and quality-of-life treatments that might otherwise feel prohibitively expensive.
For example, imagine your vet tells you that your senior Corgi with arthritis could really benefit from hydrotherapy. It’s not necessary to save or extend his life—but it will make his days less painful.
Paying the full cost of several months of hydrotherapy might feel like a risky drain on a pet savings account, especially when you know your senior buddy is at risk for other expensive health issues.
Pet insurance, however, might let you pay just 10% or 20% of that cost (depending on your reimbursement rate) without jeopardizing your ability to pay for future health issues.
For providers with strong alternative, rehabilitative, and behavioral therapies, get your free quotes from Spot and Lemonade below.
Pro: Pet insurance often comes with additional benefits
Pet insurance often comes with benefits you can’t get out of a savings account. 24/7 vet telehealth options are increasingly popular, and they can be a huge help to new pet parents wondering what to do about midnight puppy pukes or weekend kitten diarrhea.
There are also multi-pet discounts, discounts for bundling, and a variety of other perks insurance companies use to make purchasing a policy attractive to pet parents.
Con: Your payment schedule is inflexible
Unlike with a pet savings account, which lets you pay into it and withdraw from it at will, pet insurance has an inflexible payment schedule. You can’t miss a month of premiums—otherwise, you’re likely to see your policy canceled.
It’s true that you could purchase a policy again at a later date. But your pet’s pre-existing conditions will reset. That means any health issues your pet has experienced since you bought your first policy could now be considered pre-existing and thus ineligible for future coverage.
Con: You could pay more than you get out
Pet insurance is rarely a money saver. In fact, statistically speaking, you’re likely to pay more in premiums and deductibles than your pet insurance company will pay out to you in reimbursements for vet bills—especially if your pet stays relatively healthy.
That’s the truth of all insurance: It’s there to help you and your loved ones weather a catastrophic financial hit, not to save you money in the long run.
With a savings account, you don’t run that risk, and you’ll never wind up paying more for vet care than your vet is actually charging you.
Con: Pet insurance premiums get more expensive as your pet gets older
A pet savings account isn’t impervious to the rising cost of veterinary care. But your monthly rate will certainly get steeper still with pet insurance. That’s because pet insurance premiums rise over time, doubling or even quadrupling as a pet ages.
What once felt like a good deal for a puppy or kitten may begin to feel like a bad deal as the years roll by, tempting you to quit your policy just when you need it most.
A pet savings account, by contrast, always gives you control over how much you’re putting in; you contribute as much as you want when you want, with no danger of losing what you’ve already put in if you’re unable to pay for a month or two.
Which Should You Choose?
For some pet parents, there’s a clear advantage to choosing either pet insurance or a pet savings account.
Pet parents might want to prioritize pet insurance if they:
- Have a breed prone to health issues or expect to see a lot of the vet in their pet’s lifetime
- Have a young pet who is cheaper to insure and has few pre-existing conditions
- Want to feel empowered to say yes to optional care
- Are concerned about their ability to maintain a pet savings account
- Feel the risk of expensive life-saving care could put them in a tough financial spot
Pet parents might prefer a pet savings account if they:
- Can fill it with significant savings right off the bat or are comfortable enough with their financial situation that they aren’t worried about affording expensive care
- Are concerned about having to pay consistent monthly premiums to maintain a pet insurance policy
- Are confident they won’t need to drain a pet savings account for any other purpose
Why you might want to consider both pet insurance and a pet savings account
For many pet parents, the best choice might be both pet insurance and a pet savings account.
One reason a pet savings account is helpful is because typical accident and illness insurance plans don’t cover routine and preventive care—things like annual check-ups and vaccinations. Even a wellness add-on won’t cover 100% of preventive healthcare. So it’s a good idea to have some money set aside for predictable pet care expenses.
It may also be worth having a pet savings account to defray the vet expenses that pet insurance won’t:
- Your annual deductible, which might be anything from $100 to $1000, depending on your plan
- Your copay, which might range from 10% to 30% of treatment costs, depending on your plan (unless you choose a rare plan with 100% reimbursement)
- Immediate payments; most pet insurance works by reimbursing you, not your vet, which means you may still need the funds to pay your vet up front
- Treatment for conditions that your plan won’t cover, whether that’s because they’re pre-existing or they’re simply beyond your plan’s scope
In short, even with a great pet insurance plan and stellar coverage, you’ll likely still end up paying some money out of pocket for your pet’s vet expenses, and a pet savings account can help.
Further Reading
- The Best Pet Insurance: A Pet Parent’s Guide
- What Does Pet Insurance Cover? Everything You Need to Know
- How To Choose the Right Insurance for Your Pet
- How Much Does Pet Insurance Cost?
- Pet Insurance and Pre-Existing Conditions—What To Know Before You Buy
- The Best Pet Insurance Wellness Plans: How Preventive Care Add-Ons Work
- What To Know About Waiting Periods and Pet Insurance
- What Are Pet Insurance Deductibles, and How Do You Pick One?
- When Should You Get Pet Insurance?
Insurance advice, products, and links contained in this article are currently intended for and only available in the states where Rover Pet Insurance Services, LLC is currently licensed as an insurance producer. As we expand our licensing to other states we will update our websites and links.
If you are located in a state in which we are not currently licensed, but would like to learn more about pet insurance products available in your state, you may contact a licensed insurance agent or broker in your state.