A slight deviation from our usual unapologetic rants about personal finance and paying investment fees for things that add no value, for a brief personal account of this Editor’s experience with pet insurance.
Yes – pet insurance – the surest sign that having children has become too expensive for most people.
This Editor has two cats. One is amazing and might just be the best pet ever, whilst the other is a personality black hole, but that doesn’t mean we love it any less, so my recent free time was spent doing a bit of work and some analysis on the benefits of taking out pet insurance.
Insurance is all about pooling risk with like-minded people, all paranoid about contracting the same affliction, or worried about golf-ball sized hail stones. If my house burned down as a result of some poor electrical work, I’d probably end up living in a camper van for the foreseeable future, as I just would not have the money to rebuild from scratch.
I do, however, have the several hundred rand per month to insure my house, knowing that if something did happen, my insurance company would make me whole.
It all comes down to pooling risk. Insurance companies earn premiums from the likes of you and me, invest these premiums and hopefully act with care to insure that the sum of all the money they have is sufficient to cover the claims that could confront them in the future.
Pet insurance is no different.
There has been a huge amount of growth in the pet insurance industry these last few years. You might even have seen an ad on TV, or found a pamphlet at your local vet with a picture of a kitten on it and some happy family on the lawn.
Cheesy clichés aside, they appear to offer very good value based on current pricing.
Pet insurance is like most other insurance products, which makes them quite easy to mentally digest and importantly – to compare.
And then of course, there is price.
Price alone should not influence your decision for almost all financial products, but all else being equal, paying less for something does make complete sense. Not all insurance products are perfect substitutes and just because one is cheaper than another, doesn’t mean it’s appropriate for your needs. It’s always best to compare and interrogate the characteristics of an insurance policy, find those that meet your needs, then find the cheapest from the remaining providers.
I found a site called www.insurepet.co.za, or rather it found me, when I Googled for….’pet insurance for my cat’…go figure.
Anyway, good ideas seems to spread as the author had made a comparison table much like our own Gap cover comparison tool, although ours is nicer if I say so myself.
Regardless, it still helped me shortlist some providers and get a feel for who was active in this market.
I won’t say who I used, as you should make up your own mind, but it looks like a no brainer from the table.
I pulled out my Texas Instruments BA II Plus, and ran some numbers. Taking into account the excess I would be in for, as well as a quick call to my local vet to get an idea as to the kinds of things I could end up paying for one day as well as their cost, I got comfortable quite quickly paying the relatively small monthly premium.
Pets are quickly becoming more and more important to us in a cultural sense. Many people now consider them children, and would do anything to keep them happy and healthy. That said, no one likes being confronted with a R20k bill for cat surgery, so I recommend doing some quick research and deciding if it’s worth paying a small monthly premium to offset the worry that you may have to put a beloved companion down because you don’t have the capital to pay for expensive treatment.
In my family’s case, we even covered the second cat.