The 3 Worst Things About Not Having Pet Insurance

Like most people, my husband and I consider our pets an important part of our family. That includes providing them with everything they need, including healthcare. Looking back over the past few years though, I cannot imagine how much more difficult it would have been to provide the care they need without the assistance of pet insurance.

A Rover.com survey found that the average cost of caring for a dog ranges from $480 to $3,470 per year. The actual amount spent depends on a number of factors, including:

• Owner preference regarding things like toys and training
• Health of the pet
• How consistently the owner keeps up with routine veterinary care

Which leads us to the worst things about not having pet insurance:

1. Out-of-pocket expenses

Unless you have a stash put away in a savings account, it can be tough to come up with out-of-pocket expenses as they arise. Pet insurance is one way to plan for those expenses in advance and avoid the need to dip into your bank account as veterinary bills pile up.

Here's how that works: When you purchase pet insurance for your dog, cat, bird, snake, or other beloved pet, you choose the plan that works best with your monthly budget. To find a policy that works for you, check three things:

1. The deductible: This is the amount you'll pay for pet care before insurance kicks in. So, if your deductible is $500 and a veterinary bill comes to $1,500, you'll pay the first $500 and the insurance company will pay the remaining $1,000. Some insurers require you to pay a "per-incident" deductible while others offer a one-time annual deductible.
2. Reimbursement level: You'll also choose which reimbursement level works best for you. Most pet insurers offer 70%, 80%, and 90% levels. Let's say your pet is seriously injured and needs surgery that amounts to $10,000. If you choose a 70% reimbursement level, you'll pay $3,000 and the insurer will cover the remaining $7,000. If you opt for a 90% reimbursement level, you'll pay the first $1,000 and the insurance company will cover $9,000. Personally, we've opted for a 90% reimbursement level for a reason I will share in a moment.
3. Payout limits: While some pet insurers have no cap on how much they'll pay out toward the care of your pet, most do. Find a plan with a payout level that makes you feel comfortable that you can afford to pay anything beyond that amount.

Important to note: The lower the deductible you choose and the larger the payout limit, the more you'll pay in monthly premiums. If your monthly budget is tight at the moment, you'll save on monthly premiums by choosing a higher deductible and choosing a plan with lower payout limits.

2. Financially-based healthcare decisions

For many years, we had three large dogs. They traveled with us everywhere, including moving out of the U.S. Soon after we left, we allowed our pet insurance to lapse as there were no international vets who accepted the coverage. Allowing that coverage to lapse led to a series of events that have been tough to shake.

A weird virus swept through the dog population in our city. Dogs became violently ill and died within 48 hours. Honestly, to this day, I'm not sure which virus it was. We kept our dogs pretty isolated, so we're not sure how our middle girl caught the virus, but she did.

I brought her to a vet we'd grown to trust and he thought he "might" be able to save her, but it was going to be very expensive. Chances were, she was going to die after treatment. I told myself that I didn't want to put her through a bunch of treatments that were unlikely to work and that was the truth -- partially. The reality is, I was also concerned about racking up a huge bill for medical procedures that were unlikely to help. I opted to allow her to pass naturally.

15 years later, and it's still one of my rawest, most shameful memories. Something changed in me, though. I vowed to never be in the position of making a healthcare decision for a pet based (even partly) on cost. I can decide not to treat a pet if it's going to cause them more pain or is unlikely to help their quality of life. But I never want money to factor into the decision.

3. Added worry

Today, our pets are fully covered. We know the maximum we'll need to pay out-of-pocket if something big happens. That money is put away in a special savings account we hope we'll never have to touch -- but it's there if we need it.

One of the worst things about not having pet insurance is worrying about what "might" happen. For example, my husband and I regularly plan trips with several other couples. A pet sitter comes in to watch the pups. Among the things we leave for the sitter is a folder containing pet insurance information, where to take the dogs if one is hurt, or who to call if they have a medical question. That way, if one of the dogs eats something they shouldn't (I'm looking at you, Harlow), the sitter can seek help without worrying whether we'll approve.

I realize that pet insurance feels like a luxury -- and a silly luxury to some. But even if the policy you can afford right now is quite basic, it could still save you money. It's not a guarantee that nothing will happen, but it will give you peace of mind, knowing that you're doing all you can.

This article originally appeared in The Motley Fool. The Motley Fool has a disclosure policy.

Dana George has been writing about personal finance for more than 20 years, specializing in loans, debt management, investments and business.