Have Pet Insurance? Here's Why You Still Need to Budget for Medical Bills

Don't assume you won't spend money on your pet's medical needs.

A friend of mine recently adopted a dog and wanted to know if I thought pet insurance was a good idea. My response? A resounding yes. 

After caring for a very sick dog who passed away years ago, I know what it's like to incur thousands of dollars in veterinary bills as an animal ages or falls ill. And the benefit of pet insurance is that it can spare pet owners some of those costly bills so they aren't forced to choose between what's best for their pets and what's best for their savings accounts.

But if you're going to get a pet insurance policy, you may still want to budget for medical bills for your pet on a monthly basis. Here's why.

1. Your pet insurance policy probably won't pay for everything

Unless you have an expensive, all-encompassing pet insurance policy, the coverage you have might only cover major bills related to things like injuries or serious illnesses. But that doesn't mean insurance will kick in every time your pet needs a trip to the vet.

First of all, pets commonly need preventive care and medications that insurance policies often don't cover. And even if your insurance policy does cover the services you're getting, it may only cover a portion. 

Remember, too, that while pet insurance is supposed to spare you the cost of major surgeries or stays at an animal hospital, it may only pick up a portion of the tab there, too. So say your dog needs medical treatment that costs $6,000. Your insurance may have a cap of $5,000 (just for example) for that specific issue or illness. So it's important to allocate funds in your budget for ongoing medical issues your pet might encounter.

2. Your insurance company may not pick up the tab right away

Many of us are used to going to the doctor and paying a copay to the tune of $25 or $30 dollars for a visit that actually costs $300. That's how human health insurance works -- you typically pay a little something when you see a doctor, and the charges for that visit get billed to your insurance company.

With the way pet insurance works, it's often on the pet owner to pay out of pocket for the care their pet receives and then wait to get reimbursed from the insurance company once the claim is approved. But there could be a notable lag between the time of the pet's vet visit and when that reimbursement check arrives in the mail, so it's important to make sure you have the funds to cover those costs. If you don't, you could wind up with credit card debt that costs you money in interest.

Pet insurance is an important thing for any animal owner to have. But don't use that as a reason to not budget for medical bills for your pet on an ongoing basis. Instead, set aside money for pet care every month so you're not left scrambling.