Pet Insurance 101 with Dr. Chip Coombs

August 4, 2022
( 9 mins read)

The Pet Wellness Podcast recently welcomed its first guest, Dr. Chip Coombs, to discuss pet insurance.

Dr. Coombs has been an expert in pet health insurance for more than 30 years. As a prestigious member of the Royal College of Veterinary Surgeons, he has authored many articles for veterinary journals, pet magazines and newspapers, and his own syndicated column.

Dr. Coombs and I share a similar philosophy regarding practicing veterinary medicine and how we tend to animals. Providing the best care possible for our animal companions is foremost in our minds, which is why we strongly believe in pet health insurance and have always had our own pets insured.

You may be thinking, “Wow, you guys are veterinarians! Why do you have your pets on insurance?”

In today’s article, you’ll learn the answer to that and many other questions you may have about pet insurance.

Q&A: Understanding the basics of Pet Insurance

Dr. Mike: Why should an owner even contemplate buying pet health insurance?

Dr. Coombs: The days of a dog and a cat simply being a dog or cat are long gone.  These guys are now our family members, and the human-animal bond has solidified that position. There’s an interesting figure I always marvel at that 84% of us refer to ourselves as either a pet’s mom or dad.  So why would we want pet health insurance?  Simply because we want the very best for these guys.  The problem is that veterinary medicine has reached the stage where almost anything you would have done to yourself as a human can be done to your pet.  The only difference is we have to pay for it, and some of these expenses can be very high.  So, from the owner’s perspective, it offers them the ability to afford the appropriate veterinary care for their pet.  And from the pet’s perspective, they will be delivered the highest quality veterinary medicine available.

Dr. Mike: Why would an owner not want to buy pet health insurance?

Dr. Coombs: There are lots of owners that don’t have pet health insurance.  One of the reasons is just simple awareness.  They don’t know that pet health insurance exists.  There is a high cost of providing good quality veterinary medicine. I think most owners, particularly new pet owners, are justifiably naive about how much veterinary medicine costs, as we live in a world of socialized medicine. I think the other reason is that there are undoubtedly pet owners out there who have had an experience with pet health insurance that was not positive.  So even though there are many players in the market, they assume that all companies are the same when they’re not.

Dr. Mike: There are four major pet health companies in Canada.  Are they all the same, or do you think they are different?

Dr. Coombs: From my personal experience, because I’ve done consulting in this pet health insurance world for probably 35 years, the answer is no.  It can be very challenging to compare one company to another, and one of the main reasons is that no two companies have exactly the same product.  Of course, the overall concepts are basically the same: most policies in Canada and the US are so-called accident and illness.  Whatever happens to your pet, it will be eligible for coverage on the assumption that you meet the terms and conditions of the policy.  There are also different deductibles and different premium levels.  The best way to find out what those differences are is to ask the company precise questions.  If you’re not sure they’re giving you the straight answer, call them back and ask them again.

Dr. Mike: Can you explain some of the standard terms used by pet health insurance companies in their policies?

Dr. Coombs: The first one that’s going to hit you, of course, is the word premium, which means, “How much is this policy going to cost me?”  How companies determine that does vary from company to company.  All companies are concerned about where you live, as the cost of veterinary medicine across this country varies greatly. They’ll also ask you about your pet’s breed.  They want to know because many breeds will have predispositions to certain illnesses, so the company knows they will have to pay the owner out on a claim for this particular breed.  That’s going to be worked into the premium.  The third qualifier for premium is age.  As the pet gets older, the premium very often goes up.  Another commonly used term in pet health insurance, which actually applies to our medical insurance, is the concept of “pre-existing,” which is something the pet already has.  The whole concept of insurance is to pay for the unknown, the unexpected, and the unforeseen.  So, if you have a diabetic cat and decide to get pet health insurance, that’s an excellent thing to do.  But don’t expect it to pay for diabetes because the diabetes was already there.  However, if the cat fell from the balcony, or something got hurt, or got poked in the eye because another cat scratched him, the insurance will cover these things.  But to walk into an insurance policy and expect something that already existed to be covered, that’s not going to happen.

Dr. Mike: In your experience, which of the three you mentioned are you fondest of paying: the deductible yearly versus per condition?

Dr. Coombs: The fairest, I think, is one deductible once a year, and once it’s satisfied, that’s it for the rest of the year.  I would seek an annual deductible that only applies once, and some companies offer that.  And the last term I’ll mention is the concept of underwriting, and all insurance companies use this term.  Basically, it refers to asking for and reviewing your pet’s medical records.  Traditionally, pet health insurance companies would wait anywhere from months to years before you made a claim, asking for the medical history. That’s not very owner-centric to do it that way because you could be diligently paying your premiums;  two years pass, and then you go to make a claim, and then they review your pet’s medical history, and they say, “Well, your pet had this problem two and a half years ago, so as far as we’re concerned, it’s pre-existing, and we’re not paying for this.”  Well, I cannot think of a faster way to irritate a pet owner than to tell them after the fact that something is not eligible!  A far better approach is to do the underwriting before issuing the policy.  All policies have a 30-day cancellation clause, no questions, no foul.  And so, if an owner is not happy with any exclusions, whether temporary or permanent, put on the policy, they can say, “Well, I’m not interested, thank you very much,” and cancel the policy. There’s no premium owing, and things are fine. It’s a much more transparent, open, fair approach.

Myths and Misconceptions About Pet Health Insurance

Dr. Coombs gives us the facts about pet health insurance and addresses common misbeliefs.

Myth: Pet health insurance is basically like government healthcare.

Fact: Pet insurance is private insurance!  It is not the same as provincial healthcare which is covered by the government.  So, try not to go into it thinking it will be the same as what you experience with your health insurance provided by whatever province you reside in. It’s private insurance, and it works the same way.  And the company has to make a profit, so bear that in mind when they talk to you about pre-existing conditions and exclusions.

Myth: It can be “too late” to insure a pet.  

Fact: It doesn’t matter what condition your pet has had.  That doesn’t preclude them from having pet health insurance.  It may create that particular condition as being pre-existing.  As you well know, there are hundreds of different problems that can affect dogs and cats.  So, the fact that the insurance might not cover one condition certainly doesn’t undermine the merits of having pet health insurance for all the other things that could happen.

Myth: Pet insurance is “an investment.”

Fact: Owners tend to view pet health insurance as an investment, and I don’t quite grasp that.  We don’t have car insurance, hoping we can collect on it for obvious reasons, but people look at it differently when we buy pet health insurance.  They think, “Well, I’m paying $100 a month in premium, and I only claim $500, so it wasn’t worth it”.  But that isn’t why we have it.  We don’t have it as an investment. It’s to cover those astronomical costs that can blindside us when we don’t have the budget to pay for them.

Myth: It’s better to have a savings account for your pet’s expenses

Fact: On paper, at first blush, that makes sense.  But there are two huge problems with that approach.  Problem number one is that after six months, you’ve got $500 saved.  And you notice that, unfortunately, you now have a roof starting to leak.  Well, you have to have the roof repaired.  I guarantee that it will be thousands upon thousands of dollars.  And again, back to the fact that most people couldn’t save and put aside thousands of dollars, we’re winging it because we can’t wait.  This roof has to be fixed because the longer we wait, the worse it will get, and the more damage will be done to the rest of the house.  So, you might be able to get a bank loan, but I guarantee your pet’s savings account will get hit because it’s a nice wad of cash.  And so, guess what? There’s nothing left in the account.  

The other scenario is that a year has passed. If we assume that you’re putting the amount you would pay for the premiums into a bank account,  You may have as much as $1,000 set aside.  This would be fantastic.  But the difficulty is that, let’s say, your petis a retriever playing ball in the park and does a power turn that ends up tearing the cruciate ligament in the dog’s knee.  After a whole year, you have thousands of dollars put aside, yet the surgery will probably cost you $7,000.  And what happens in those cases where the cruciate got torn maybe a month after you took out the policy?  Well, the policy is going to cover it almost immediately.  So, you’ve got the coverage you needed after one month of paying a single month’s premium instead of saving for a whole year, five years, or six years.

Myth: Indoor cats don’t need insurance.

Fact: Well, these guys get into trouble no matter what.  Imagine somebody bringing home some Easter lilies, and many cat owners have no idea that lilies are toxic to cats. But all it takes is one mouthful of lilies, and you now have a cat fighting for his life.  So, the only way it can be turned around is with aggressive medical treatment in a veterinary hospital over days.  And that is going to add up.  Here we have a classic example.  The indoor cat never gets outside, he decided to sample a plant, and now he’s fighting for his life.

Myth: Pets can be “too old” for pet health insurance.

Fact: Some people feel their pet is too old for pet health insurance.  The premiums will be too expensive and they won’t cover them well. There’s no harm in trying.  Seventy-five percent of cats, for example, when they go to the great beyond, do so from kidney disease.  So, it isn’t a given, but it’s a good bet that something will go wrong.  That is one more reason to get pet health insurance.

Pet Wellness Advocacy

The word “Advocate” in the “Pet Wellness Advocate” movement fits perfectly with the principle of pet insurance. You’re advocating for your pet, which means you’re putting money away to say, “Hey, if you ever have a problem, I’m here for you.”  We know you’ll be there for your pet emotionally, but it’s also essential for you to be there financially.

I hope Dr. Coombs' information on pet health insurance was enlightening.  If you have any questions for Dr. Coombs or me, you’re more than welcome to email us at podcast@petwellnessadvocate.com.  If you’re excited to hear more about how you can become a pet wellness advocate, be sure to subscribe to the podcast, so you’re notified about each new episode.

ABOUT THE AUTHOR

Dr. Mike

Veterinarian and Pet Wellness Advocate
Fear-Free Certified Elite Level practitioner.
His mission is to encourage pet owners to welcome the responsibility of providing their pets with the very best care possible.
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