I'll Definitely Buy Pet Insurance in the Future -- but Will Skip This Type of Coverage

My dog is 16.5 years old and while she's still in great health, she has a number of pre-existing medical conditions, including a heart defect that has been surgically repaired. Her care in the last few years has cost me a pretty penny and put a big dent in my checking account balance.

Unfortunately, I did not have pet insurance for my dog -- largely because I brought her home when I was young and still in school and didn't realize the importance of getting covered. Over her life, I've wished often that I had purchased a policy and I will definitely be getting covered with any future animal companions.

But while I'm definitely going to be buying a pet insurance policy going forward, there's one type of policy add-on I won't get. Here's what it is and why I'll skip it.

Buying this pet insurance coverage doesn't make sense to me

Although I want to make sure my next dog has both accident and illness coverage to protect against major health issues that arise, I will be skipping the purchase of wellness coverage.

Wellness coverage pays the bills for routine veterinary expenses. For example, it might cover expenses like:

• An annual exam
• Flea and tick prevention
• Behavioral therapy
• Deworming
• Nail trims
• Spay and neuter surgery
• Microchipping
• Heartworm testing and preventive medication

In most situations, a wellness plan allows pet owners to get this care at any licensed veterinarian and to submit a claim for reimbursement. However, there are typically caps on coverage, such as a limit of $45 for an exam.

While it may sound appealing to have this kind of coverage, I don't think it's worth it for one key reason: The premiums will often add up to more than the amount paid annually -- and the policy limits may leave owners with significant out-of-pocket costs anyway.

The reality is, many of the services covered by wellness care may not be used by a given pet at all, or may only be used once. Procedures like spaying and neutering and microchipping, for example, are one-time expenses. Because of this, an analysis by the pet insurance company Trupanion found many pet owners would pay more in premiums each year than the actual services used that are covered by a wellness plan.

While this is often true of insurance (for example, a pet owner may pay premiums every year for accident and illness coverage and not use the services for many full years), in most cases, the purpose of paying the premiums is to transfer the risk of huge unexpected costs. For example, it's impossible to predict if or when a dog might need $5,000 in cancer treatment, so paying premiums in case that happens makes sense.

With wellness care, though, the entire point is that the care happens on a predictable schedule and is intended to keep the animal healthy and happy. Since there's no unexpected risk being transferred to the insurer, paying for wellness care would only make sense if the total costs of care were lower with coverage -- and often they are not.

Here's what I'll be doing instead

Rather than paying more for insurance to cover routine care, I'll simply be adding up the anticipated cost of this each year and putting that money into my savings account. That way, the funds will be there when I need them and I won't be sending insurance premiums to a pet insurer who then pays out less than I paid in.

Pet owners should carefully research what pet insurance for wellness care does cover. If, like me, they determine the premiums aren't worth paying, passing up on this type of coverage can be smart. Just don't skimp on accident and illness coverage, as those kinds of policies really are important to avoid the risk of huge bills after a medical emergency.