Why Insured Pet Owners Still Need a Pet Emergency Fund

Sponsored by Figo Pet Insurance

A lot can change when you welcome a pet into your home and life. Your schedule might need to be tweaked to make time for walks and feedings. Your bed might no longer be yours to spread out in. And your nightly dinner could morph into something you need to start guarding.

Your financial situation can change a lot, too, when you adopt a pet. Suddenly, you're paying for food, supplies, and of course medical care.

Routine medical care for your pet is something you can budget for with the help of a good vet. It's the unknown expenses that could wreak havoc on your finances.

Pet emergencies can unfortunately happen at any time. And getting pet insurance can be a good way to help protect yourself from having budget-busting vet bills.

While pet insurers do put limits on the amount they’ll pay for different types of care, generally speaking, an insurance policy may pick up a portion of the tab when your pet ends up needing emergency treatment or a costly procedure. But you should know that pet insurance will not take the place of a pet emergency fund. Here’s why.

Insurance Won’t Cover Everything

Pet insurance may cover a substantial portion of your emergency pet care costs. But that doesn’t mean it’ll pay the entire bill each time.

Most insurance companies have a specific reimbursement rate they'll pay toward different services. Some plans also have yearly payout limits. And it's very common for pet insurance plans to impose a deductible, the same way you're probably used to paying one for auto insurance, homeowners’ insurance, and human health insurance claims.

Say your pet insurance company reimburses 80% of emergency vet care. If your pet ends up in an animal hospital with a $2,000 bill, the maximum you'll get back is $1,600. And that’s if the service is covered to begin with. So, the remaining $400 needs to come from somewhere – namely, your pet emergency fund.

Some pet insurance plans also exclude certain breed-specific conditions. And it's very common for pet insurers to not cover pre-existing conditions, period.

So, let's say you adopt a dog that has hip dysplasia. If that's a known condition at the time of your insurance application, your insurer probably won’t cover treatment for it. If your pet ends up needing surgery, you could be looking at paying thousands of dollars yourself.

You Usually Have to Pay Vet Bills Up Front

In a best-case scenario, you’ll end up with a generous pet insurance policy that comes with a low deductible and a generous reimbursement rate. And better yet, you may not have any exclusions to worry about related to pre-existing conditions.

Even so, the way pet insurance usually works is that you’re required to pay your pet care bills and then submit a claim for reimbursement. The amount of time it takes for your insurer to pay will typically depend on the company you use and the nature of the claim. If it’s straightforward, it may get turned around sooner.

But either way, you could easily end up waiting weeks for your pet insurance company to cut you a check from the time you submit your claim. So, if you charge your pet care bills on a credit card, you may have to pay off that balance before your reimbursement comes in.

That’s another reason to have money in a pet emergency fund. If you end up with a long wait to get reimbursed, you can potentially avoid racking up interest and accruing debt in the first place.

Here’s How Much You Need in Emergency Pet Funds

People are typically advised to have enough emergency savings for themselves to cover three to six months of living expenses. But that’s geared toward getting through a period of unemployment.

You may not need as much money in your pet emergency fund – and you may not have the ability to save as much for your pet’s care as the general emergency fund you keep for yourself.

But at a minimum, your pet emergency fund should have enough money to cover your insurance policy’s deductible, since that’s money you’ll need to shell out before your coverage kicks in. So, if that deductible is $250, that should be your minimum savings goal.

Beyond that, it’s a matter of what you can afford and what gives you peace of mind. Saving $2,000 for pet care emergencies gives you a good amount of leeway to cover a surprise bill. Saving $3,000 might give you even more comfort.

If you have a pet with pre-existing conditions, you may want to consider boosting your pet emergency fund even more knowing that your insurance policy won’t pick up the tab.

The tricky thing is that you never know what sort of issues your pet might encounter. But here are some of the costs you might face, depending on the issue at hand.

Data source: CareCredit.com

To be clear, these are just averages. Your ultimate costs will depend on your pet’s condition and age, and where you’re receiving care.

Tips for Building Your Pet Emergency Fund

Your path to building a pet emergency fund is similar to building a general one. The money will need to come from somewhere, so you can either trim your spending for a period of time to scrounge up the cash or pick up a side hustle for extra income. A combination of both works well, too.

In addition, it will help if you:

• Set a savings goal so you know what you’re working toward
• Get onto a monthly budget so you can identify ways to save
• Set up automatic transfers to a dedicated account so you’re not tempted to spend or dip into those funds

If you're lucky, your pet insurance company will pick up the bulk of the tab the next time your pet needs care and reimburse you fairly quickly. But it's important to have a pet emergency fund in case that doesn't end up happening.

The information presented in this article is for educational and informational purposes only and does not constitute or substitute for the advice of a veterinarian.