What's the best pet insurance?

We have http://www.petcareinsurance.com/us/cat/indoor/index.asp for, well, our http://www.flickr.com/photos/loser/4267265/. We scratch our head every month at the $9.95 debating if it's worth it; we spend a significantly larger amount on routine visits which insurance does not cover. Our previous cat died of lymphoma. I think had we had insurance we might have gone ahead with chemotherapy. We figure it's worth the money over the long term to not have to make that decision again. I think we ultimately save the most money by having a great, reasonably-priced vet. The only thing insurance really buys us is peace of mind when we dangle him out of our second story window Michael Jackson-style. Our local paparazzi eat it up.

If satisfactory terms can't be found, perhaps consider dumping wha you would have had to pay in premiums into a newly opened account of your own, and letting it accrue. In theory, you get better value for money over the long run (else insurance companies couldn't make a profit) but of course you're vulnerable at the beginning when not enough has accrued to cover something major. Health insurance in the USA is a scam in the sense that the medical charges are not always what the insurance company pays, yet the unpaid extra is dropped - a bit like half the charges are monopoly play-money that only needs to be paid if you're not an insurance company. Because of this, you get better value for money from health insurance than you would from self-insuring. Veternarians on the other hand, do not seem to have these relationships with insurance companies - their bills are real bills, not monopoly play-money, and must be paid in full regardless of whether you are a person or an insurance company. Therefore an insurance company has to charge enough that, on average, their insurees pay more in premiums than they get from payouts (the difference being the company profit margin). If you have a sick animal, this will work in your favour, if not, it might be better to self-insure.

I just talked about this with a vet school friend of mine who has 3 cats. She and her husband used to have pet insurance. They paid a flat fee of $120 dollars for the year, then still paid monthly per cat. She reckoned they'd spend around $350 a year, sometimes more. When it came time to go to the vet, as harlequin pointed out, those bills needed to be paid in full, then submitted to the insurance company, then reimbursed at around 60%. She ended up quitting the insurance and squirreling away an emergency pet fund from which to withdraw when she needed. On the other hand, another couple I know had a cat with ongoing health problems that needed to be treated on a regular basis, wishes they'd gotten pet insurance because they spent thousands of dollars on care. IMO, if you've got a pet with ongoing health issues, pet insurance will help out in the long run, when you're getting into the hundreds/thousands of dollars in bills, but it seems that a separate fund on your own for pet care might be a less costly option. I'm lucky to have a wonderful vet with a lenient payment plan option. 50% at the completion of the visit and literally a "whatever you can pay, whenever you can" policy after that (within reason, of course). I'm guessing quite a few vets do that. Emergency hospitals on the other hand, are a whole different beast.

You might consider talking to your employer and seeing if they're willing to look into offering a pet insurance plan. It would still be a voluntary benefit and you'd have to pay the entire premium but you'd get a better rate. If satisfactory terms can't be found, perhaps consider dumping wha you would have had to pay in premiums into a newly opened account of your own, and letting it accrue. In theory, you get better value for money over the long run (else insurance companies couldn't make a profit) but of course you're vulnerable at the beginning when not enough has accrued to cover something major. This isn't a bad idea, but it's not exactly what insurance does. The benefit of insurance is that you're pooling risk -- the chemotherapy for Fluffy may end up costing 50x more than you've contributed into the plan. You do make a good point about the discounts negotiated into contracts between medical insurers and providers, though.