Jill Johnson got her first dog five years ago, a male Chinese Shar-Pei she named Bueller. She didn't hesitate to buy pet insurance.
Johnson knew the breed with its wrinkled face is prone to eyelid problems that can affect the dog's vision. In due time, Bueller needed expensive medical care.
"He had an eye lift surgery but it was covered," said Johnson, 55, of Naples.
Most of her pet-owning friends don't have insurance but she is sticking with her ways.
"I think it's worth it," she said. "Dogs can have all these people problems. I guess I'm just one of these people who believes in insurance, just in case."
The American Veterinary Medical Association is not able to track the number of people who buy pet insurance but it is gaining in popularity, said David Kirkpatrick, spokesman for the association representing 82,500 veterinarians. About 146 million pets are living in 68 million American households, according to the association.
"We endorse the concept," Kirkpatrick said of insurance. " It affords the pet owner some security and flexibility when it comes to providing for their pet's health."
The North American Pet Health Insurance Association says on its website that 1 million people have insured their pets in the U.S. It is now a $100-million industry annually.
A group of California veterinarians started pet insurance 30 years ago to help end "economic euthanasia," where people were making decisions about their pets based on cost, said Curtis Steinhoff, spokesman for VPI of Brea, Calif. The largest pet insurer in the U.S., VPI insures 485,000 pets.
"We've seen 50 other companies come and go," Steinhoff said. "Now there's a dozen in the market today."
When pet food giant Purina launched insurance in 2008, Steinhoff said that helped validate to skeptics that coverage has merit.
"Purina is a brand that people trust," he said.
Three primary target groups are women who haven't had children yet; women whose children are grown and on their own; and young men. Dogs account for 85 percent of insured animals, with cats at 15 percent of the insured and birds, reptiles or other animals account for less than 1 percent, according to North American Pet Health Insurance Association.***
Pet insurance is becoming a benefit employers can offer to their workers, where VPI provides 5 percent discounts, Steinhoff said. Employees can sign up for payroll deductions or pay directly.
To date, nearly 3,000 companies are offering VPI insurance as a benefit, which means 67 million employees have access to it. Some of the companies include Wells Fargo, Boeing, Xerox, Microsoft, Hewlett-Packard. McDonald's and Google, he said. There is no cost share or out-of-expense cost to the companies.
Naples-based Arthrex, an international medical device manufacturing firm known for its comprehensive benefits package, has an arrangement where employees can obtain pet insurance at a discount, said Arthrex spokeswoman Lisa Gardiner. The coverage is through ComPsych, an international employee assistance company.
"It is employees' own policy," she said. "It's not through us."
Pet insurance is casualty insurance that falls within the "livestock and live animals" area of business with the Florida Office of Insurance Regulation, according to spokeswoman Anita Durham. Since 2010, 14 companies have had approved ratings but that doesn't mean they all offer pet coverage.
Dr. Sterling Sigmond, a veterinarian at Gulfshore Animal Hospital in Naples, said it is key to understand that pre-existing conditions will not be covered. Some insurers contact her office asking for a diagnosis date.
The animal hospital sees more congenital problems that are breed specific. The catch is people buy policies and don't realize things like hip dysplasia in golden retrievers won't be covered.
"You can't diagnose it at puppy visits, but three years later, it's not covered," she said. "The insurance still has value if your dog is hit by a car. Every policy covers that."
Veterinarians are not in the loop of claims because customers pay their bills and then file with the carrier for reimbursement. Sigmond estimates 5 percent of her customers have insurance. There's no typical client.
"It's all over the board," she said. "I think it's more of a mindset. It's not necessarily the wealthier people who buy it. It's usually an owner who had dogs before."
Dr. Leslie Reiff, a veterinarian at Naples Safari Animal Hospital and Pet Resort, said the main argument against pet insurance is people can set aside each month what they would pay in premiums. In time, that may cover unexpected veterinarian bills years when the pet gets older. But that doesn't take human nature into account.
"People don't do it, put money aside," Reiff said. "(Insurance) takes the guilt out if something happens. We don't see as much as we would like. "
Steinhoff, of VPI, said his company has three categories of insurance: injury/accident only, medical; and major medical.
Premiums for a dog run $20 to $30 a month with $7,000 in benefit annually through the medical plan. The premiums are $27 to $40 a month with benefits capped at $14,000 a year under the major medical option. Deductible options drive the premiums.
The major medical is the most popular because it covers hereditary issues, something a pet's breed is prone to getting but may not, he said. That's different than congenital issues, which the pet already has, he said. Pre-existing problems are not covered.
"I don't believe any pet insurance companies cover pre-existing conditions," he said.
VPI uses a benefit schedule for what it reimburses instead of a "usual and customary" fee approach. The latter is how some companies reimburse based on what they say should be a veterinarian's charges for an illness or procedure.
The "usual and customary" fee approach is something that Dr. Erik Madison, a veterinarian at Emergency Pet Hospital in Naples, dislikes because it means a client pays premiums every month and still can face a large out-of-pocket expense.
"For a broken femur, (an insurer) may pay $700," Madison said. "Nobody fixes a femur for under $2,000 and it can go up depending on implants. So there's no point in paying $250 (in premiums) if $700 is covered and you have to pay $1,300 or $2,000."
That's among the reasons why pet insurer, Trupanion, takes an easier approach for customers, said Darryl Rawlings, chief executive officer of the Seattle-based company.
"We pay 90 percent of whatever the veterinarian charges," he said, pointing out there are no annual limits.
Rawlings started Trupanion in Canada in 1998 and entered the U.S market in 2008. He said his company is the second largest in the country behind VPI.
Premiums at Trupanion are determined using many factors, namely breed, local costs of veterinary care, and exposure to risks, he said.
"An average dog premium is $40, an average cat is $25," Rawlings said. "But I have some dogs at $20 and some dogs at $90."
Trupanion does exclude for pre-existing conditions that shows clinical symptoms 18 months before enrollment, Rawlings said. On the other hand, there are no exclusions for hereditary or congenital issues.
"People are buying insurance for the things that their pets are likely to have," he said.
Madison, the veterinarian at the emergency pet hospital, said pet owners have a lot to consider when it comes to policies and what may happen as their pets get older.
"Do you think you need it? It's all a gamble," Madison said.
PET INSURANCE WEBSITES
American Veterinary Medical Association, www.avma.org
North American Pet Health Insurance Association, www.naphia.org
When it comes to complaints, pet owners can call Florida Department of Financial Services or go online at www.myfloridaacfo.com.