by Deb Gray

Created on: June 13, 2009

When it comes to pet insurance, 'costliest' doesn't always mean 'best' coverage, so check out all the details before you select the company to cover your furry companion. In fact, when you review the options for vet insurance you might decide it's really not worth it.

Pet insurance - essentially health insurance for your dog or cat - has been around since 1890, when the first policy was written for a horse. Since then, the industry has grown slowly, mostly covering dogs. In England, where dogs reign supreme, about 23% of owners have purchased insurance for their pets, while that number is only 5 to 10% in Canada and the United States.

Depending on the company and the level of coverage selected, pet insurance can cover just the basics or the full spectrum of health care. The basic policies are good for the bare minimum, such as veterinary care for your dog or cat after an accident. Comprehensive coverage can include paying a reward fee for a lost animal or the cost of your holiday cancellation if your pet were to become ill or injured.

When comparing companies, and thinking about whether or not you even want to purchase pet insurance, factors like breed, where you live and age of your pet all factor in. Big city vets often charge considerably more than those in the country and some breeds are very susceptible to certain diseases and problems.

Google pet insurance and you'll find plenty to compare. (Add your state or province to make it more relevant). You might want to make a chart to compare the various features of each policy. The main things to look for: does the insurance cover hereditary or pre-existing conditions? Will the policy pay for long term costs for illness like diabetes, or is there a per-condition cap? In general, though, be aware that virtually all pet insurance companies exclude any health problem that appeared before the start of your policy, even if the condition has not yet been diagnosed or is in remission.

You'll also want to look closely at deductible amounts, which you have to pay, and the way in which your pet's medical costs are calculated. Some companies have a maximum fee set by the company for each procedure, while others will reimburse you for a percentage of your actual veterinarian's bill.

Now you should have a good idea of what you can buy for your dollar -policy premiums can range from a low of $10 per month for a very basic accidents-only policy, to $50 plus per month for truly comprehensive coverage.

So is it worth it?

The Consumer Federation of America advises that from a strictly economic point of view, pet insurance is not worth it. Others like Consumer Reports magazine, agree.

Let's do the math. Most households average about $250 a year in vet fees. If you put $20 a month into a savings account that paid 3%, in 5 years you'd have over $1,300, enough to offset big veterinarian bills.

On the other hand, pet insurance can be a great investment in your peace of mind. A single incident, like eating a cellphone (my girlfriend's Wheaten Terrier) can add up very quickly. In this case, the vet bills topped $2,200.

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