Introduction

Do you need health insurance for your pet?

While the American Society for the Prevention of Cruelty to Animals (ASPCA) estimates that only 5 to 10 percent of pet owners in the U.S. have health insurance for their pets, that percentage is growing. According to MSNMoney.com, 1,600 companies, including Google and Office Depot, offer pet insurance as an optional employee benefit. Both MSNMoney.com and Kiplinger.com report that the primary reason for the increase is that "over the past few decades, the veterinary field has advanced rapidly, with high-priced procedures that range from $600 biopsies to $3,000 orthopedic surgeries to $7,000 kidney transplants." New equipment and procedures also drive up the price of veterinary treatment. With more treatment options available, people are having to decide whether to try to come up with the money to pay for them, or to euthanize their pet. Having your pet insured could mean you'll never be faced with this difficult decision.

Still, most experts say that the first question you should ask about cat insurance or dog insurance is whether you need it or not. ASPCA data show that the average cost for basic coverage is $15 per month for a cat, $19 per month for a dog. Some in the veterinary industry recommend that you should simply put that money in a savings account each month, rather than pay insurance premiums. That way, if your pet never needs expensive treatments, you'll still have your money. (Your pet is uncovered, though, for the time it takes to accumulate enough money in savings to pay a high vet bill.) Other practitioners recommend that you buy an insurance plan with a deductible of at least $500, so you have catastrophic coverage, but pay up to a third less.

To create this report, we sorted through expert reviews and owner opinions to identify not only what to look for as you shop for pet insurance, but also what companies and plans get high ratings. Since customers know best whether specific insurance companies provide the coverage they promise and pay claims quickly, we relied most on their reviews. The best source for those is PetInsuranceReview.com, though we also drew on opinions posted at other sites such as About.com, SmartPetInsurance.com, and Epinions.com. We also looked at sources that review or recommend companies based on the coverage they offer, like OrganicPetDigest.com and HealthyPet.com, which is the web site of the American Association of Animal Hospitals (AAHA).

At the end of the day, we found some pet insurance providers that seem to keep the majority of pet owners well satisfied, along with more than a few that significantly disappoint. For example, Veterinary Pet Insurance (VPI) is among the best-known pet insurance firms. However, VPI insurance is rated poorly by existing customers, with many complaints about failure to pay claims and poor customer service.

Banfield, a nationwide chain of animal hospitals, with most located in PetSmart stores, offers a discount pet care program called Optimum Wellness. Like all similar plans (see Best Pet Care Discount Plans), it is only valid at participating Banfield locations. However, in preparing this report we came across a consistent pattern of client complaints regarding Banfield and Optimum Wellness, including contract provisions that make it difficult to impossible to cancel a contract once agreed to.