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Pause and Consider Pet Insurance

It's been more than a year since her dog died from lymphoma, and Judy Miller still has no idea how much she and her husband spent on his veterinary care. She couldn't figure it out even if she wanted to; the Los Angeles resident shredded the bills.

"Honestly, it was a fortune," she said with a sigh, clearly still heartbroken over the loss of Flynn, a poodle-terrier mix that succumbed to the illness at the ripe old age of 15. "I couldn't bear to total it up. I just didn't want to know."

The rescue dog's cancer was discovered only a month after the Millers spent $3,500 for his double cataract surgery. Flynn was a part of the family—a stand-in grandchild, Miller joked—and the couple would have spent anything to extend his life.

As veterinary medicine improves, experiences like the Millers' are becoming more and more common. Americans spent $10.1 billion on veterinary care in 2007, according to the American Pet Products Manufacturers' Association. That number is expected to go up to a whopping $10.9 billion for 2008.

"People are treating their pets like family members," said Hope Schultz, president of, a comprehensive health platform for pet owners. "They're spending exorbitant amounts of money trying to maintain them."

The nation's age-50+ population is likely leading the pack in veterinary spending, as nearly half of those 50 and over own at least one pet, according to consumer analysis firm Scarborough Research. Yet even with increasingly high veterinary bills, in an economy that's shaky at best, it's estimated by market research group Yankelovich Monitor that only 3 percent of pet owners have pet insurance.

That figure isn't shocking to Miller.

"I never would have thought of getting it," she said of pet insurance. "You don't think of animals getting sick. You don't think it's ever going to happen to your dog."

Other pet owners, like Linda Welch of Washington, D.C., are well aware of the health problems that can plague household animals, but feel the fees—which can vary depending on breed and age—aren't worth the benefits that can sometimes take years to materialize.

Welch—who owns a holistic pet food and supplies shop and a 24-hour dog kennel—was paying $700 a year for her two Saint Bernards' pet insurance. "They up the price when they see us coming," she laughed of her large canine companions. Since the policy didn't cover routine care or their preexisting conditions (most policies do not), she felt it didn't make sense financially to continue the policies.

Still, shelling out $1,800 for a single, recent root canal for one of her giant dogs, and then $3,000 to get the other's toe amputated (and another $3,000 for related treatment, such as antibiotics and diagnostic tests) took a toll on the 50-year-old's wallet.

A well-researched pet insurance policy could have lessened the financial load for both of these pet owners, according to Dr. Anna Worth, president of the American Animal Hospital Association.

The longtime Vermont-based veterinarian and her organization stand firm on responsible pet ownership, part of which means mapping out a financial plan to pay for the unexpected when it comes to pet health. Accidents and poor health may not occur to most of us when we're staring in the adoring eyes of that puppy or kitten we're about to take home. The plan may include savings or credit cards, but "insurance is certainly an important tool to help pet owners meet unexpected [veterinary] bills," she said.

AAHA does not endorse any particular pet insurance companies, but recommends taking time to understand what potential policies cover, what they exclude (such as preexisting and hereditary conditions), how expenses are reimbursed (almost all policies have deductibles and copay requirements), and whether or not the policies allow you to choose your own vet.

Worth suggested selecting a high deductible—anywhere from $500 to $1,000—in order to achieve lower monthly payments. She also advised "truly understanding your policy," especially the fact that many pet owners usually overlook: Pet insurance is different from human health insurance, especially when it comes to routine care.

"Maybe the frustration with some pet insurance customers is that they expect everything to be covered and it's not," she said.

By opting for pet insurance, "You're reducing the risk in your life," said Laura Bennett, chief executive officer and co-founder of Embrace Pet Insurance. "In today's uncertain economy, you want to decrease uncertainty in your life. It reduces the spike of expense you would have to face," if a pet faced an expensive health issue, she advised.

The idea of pet insurance usually comes around "after the fact," she continued. "The fact is that the unexpected can always happen. You think of all of the positive things about having a pet: the company, the fun, the naughtiness—not the financial responsibility, which obviously hits home when something expensive happens. Pet insurance is one of those things you can't buy when you need it."