The most frugal decision a pet owner can make is to obtain pet insurance

Some people argue that pet insurance is a waste of money, opining that a pet owner can simply deposit the would-be insurance premiums into a savings vehicle and use those funds if anything ever happens.

I am here to implore all pet owners to ignore that advice as shortsighted and wrongheaded. Insure your pets. Their lives—and your livelihood—may depend on it.

We have a dog named Muppet. She's an eight-year-old Shih Tzu mix and she would like you to pet. She's been quite healthy... until this year, when she fell ill and was diagnosed with inflammatory bowel disease (IBD), Fanconi syndrome, and protein-losing enteropathy (PLE). She's been severely anemic to the point of needing a blood transfusion. She has a feeding tube sticking out of her neck and is working with a veterinary nutritionist.

The point is that Muppet is very sick and needs a lot of care. We're fighting to get her to recover. It's been a long and difficult road just to keep her alive, and we have an even longer and more difficult road to lead her to recovery.

And veterinary care is expensive, doubly so when specialists like nutritionists and internists, hospitals and critical care teams, and advanced procedures are involved.

When we first adopted a four-and-a-half-month-old Muppet on January 22nd, 2016, we quickly took her to our local primary care vet for a comprehensive physical, then enrolled her in the best insurance plan we could find. We got her into a no-limits (annual or lifetime) plan from Healthy Paws with very few exclusions (most of which are around preventive and maintenance care), a $100 annual deductible, and a 90% reimbursement rate. That means that every year, after Muppet eclipses $100 of covered care, we start getting 90% of covered care reimbursed.

The premiums were pretty cheap back then at only $37.18 per month, but by now they've risen by 75%, to $64.94 per month. In total, we've spent $4,662.74 on her insurance premiums in a bit under eight years, paying an average of around $50 per month.

Thanks to good health, Muppet had almost no covered healthcare prior to 2023 aside from two brief hospitalizations for freak incidents—nothing came of them, thankfully. Without the hospitalizations, we'd received $1,646.87 in reimbursements compared to $3,883.46 in premiums, a net "loss" of about $2,250. Even with just the cheaper hospitalization included, reimbursement jumps to $3,321.81, reducing the "loss" to just $560 or so. With both hospitalizations included (i.e., reflecting what actually happened from 2016 to 2022), reimbursements went to $6,307.01, a net "profit" of about $2,400.

With just two short health scares, we'd been reimbursed enough to cover all of Muppet's premiums to date, plus the next four years at $50 per month.

And then 2023 happened.

This calendar year alone—and we're not even half done with October—Muppet's healthcare has cost $27,556.66. We have been reimbursed $22,031.55, leaving us with a still-hefty but far more manageable outlay of $5,525.11. Even with things like initial vet exams excluded, we got 80% of our costs put back in our pocket.

I won't mince words: we are undoubtedly privileged to be able to afford over $5,500 in pet healthcare (plus almost $65 per month in premiums) in under one year. But without insurance, we would have had to choose between emptying our savings and taking on a mountain of debt... or putting our sweet girl to sleep. That's a decision that owners should make with their doctors, not with their bankers.

I already mentioned that our premiums have totaled $4,662.74 thus far. If we had just saved that money, it obviously wouldn't come close to covering her costs. Even if we had put $100 per month into a fantastical savings account with a 20% annual interest rate and saved for eight straight years, we'd only have $23,817.69. With costs so far of $27,556.66, that would leave us $3,738.97 in debt.

Let me reiterate that: even saving $100 per month for eight years at 20% interest wouldn't be enough to cover Muppet's healthcare costs for 2023 alone.

With any luck, your pets will never need the kind of healthcare Muppet has needed. But if they need any nonstandard care—if they're seriously injured, contract cancer, need surgery, or something similarly horrible—the savings from not paying premiums won't be able to cover it. You may well have to choose between your rent and your pet.

I don't want you or anyone else to ever be in that position.

Insure your pets. Their lives—and your livelihood—may depend on it.