Pet insurance vs People insurance

When we adopted Colby back in April we signed up for pet insurance. Now - I know that people without pets probably don't understand, but if you have pets you do. Your pet is part of your family. Don't get me wrong, I know that Colby is not my child. Besides dressing him up for Halloween (but how could we not?), we don't dress him up or take him everywhere we go. But because Colby is part of our family, we insured him. Our purpose in doing this was "in case".

In case of what?, you might ask. Well - in case of anything. What if Colby ate something he wasn't supposed to? What if he got hit by a car? There are any number of things that could happen to him that would cause vet bills out the window. Anyway - we signed up for insurance that costs us $27 a month. There is a complicated schedule of how much they will reimburse us for various things. We actually picked a more expensive plan because it reimburses part of what we pay for vaccinations (dogs need them every 6 months or year for their entire lives - not like people), heartworm medication and flea prevention.

Now - hopefully most people reading this have health insurance. For people, it is cheaper to have health insurance than not to. The reason why is that if you visit the doctor without health insurance your doctor visit could cost you anywhere from $100-$400 just for the visit depending on what type of doctor and all that. But if you have health insurance you get a discount at the doctor just for having insurance. This is regardless of whether you have an HMO, PPO or some other type of plan. So with health insurance that $150 visit doesn't really cost $150, depending on the type of contract your insurance carrier has with the doctor it is less than that - maybe the visit is really only $70 because you have health insurance. Then depending on your plan you may pay only a co-pay of that amount. But really this is a win-win situation. The discount you get for having insurance is typically more than what you pay to be insured. Of course, if you never go to the doctor or hospital for anything at all (unless you were dying) then it may be cheaper for you to not have any coverage.

We have learned that pet insurance doesn't work this way. Although the specific company we have insurance through is advertised at our vet's office, there is no discount for having insurance. Instead, you pay the bill when you are leaving and send in a claim form to the insurance company and hope that they will reimburse you for a good chunk of what you paid. We have learned with this company that we have - most likely they will not.

Case in point - I took Colby in a month ago for some vaccines and to get more heartworm/flea medication. While there he was diagnosed with a hereditary disease called mange which makes his hair fall out more than it should. Treatments are to be done every 10-14 days until he is cured (he has had 3 treatments, but this could take another month or so until we are done). After the one visit a month ago the bill I paid at the vet was over $200. Ouch. At least we have pet insurance right?

Wrong. We faxed in the claim form and got only about $28 back. Yes you read that right - only about 10% of the vet bill and just about the same amount we pay every month to have him insured. It turns out that this skin condition he has is not covered by the insurance and therefore none of the tests or treatments for it are reimbursable. That was only the first visit over the last month. Remember I said that he has had 3 treatments so far. Now, I know that it isn't just the condition that we have paid for on these vet visits - there have been vaccines and the cost for seeing the vet and all that too. But we have now spent $400 in the past month alone and out of that only $28 have we gotten back or will get back.

What is the point of having insurance if it works this way? I understand that (just like people insurance) some things aren't covered, but out of that $400 only $175 of it was for this condition that is not covered. How come out of the remaining $225 we have spent we only get $28 back? We would be better off to not pay for insurance at all and save that $27 a month to help cover the vet bills for when we do take him in.