Can You Self-Insure Your Pet?
In today's economy many of us are looking to cut unnecessary costs, and one thing that might be considered for the chop is pet insurance policies. If you've held a policy for years and never had to make a claim on it, then it can seem like a waste of money.
An alternative to consider is the idea of self-insuring your pet. The idea is to put a regular sum of money aside each month into a dedicated savings account, which you can then draw on to pay the costs of medical treatment for your pet should it be necessary.
In theory this has a good chance of turning you a profit - after all, the idea behind insurance is that most people won't actually need to make a claim, so the premiums of the majority go towards paying for the claims that do arise, and of course, providing a profit for the insurer. Rather than paying your premiums, you can invest the money yourself so that if you ever need to call on it you can, but if you don't - well, your investment might provide a welcome return.
If you decide to go down this route, you need to make sure that you actually have a backup of rainy day money that you can draw on if necessary before your self-insurance fund has grown large enough to be useful.
Also, you need to be aware that if you don't have a real pet insurance policy then you'll be liable to pay for any damage or injury your pet causes to other people - and with legal fees, these costs can be truly huge.
So is this a good idea?
When all's said and done, if you're fortunate enough not to need to pay significant vet's fees for your pet, then pet insurance is money down the drain, and going down the self insurance route will leave you better off.
However, unless you have a reserve of savings to cover costs if your pet DOES require attention before you've built up your self-insurance fund, then the decision to avoid general pet insurance policies could be a costly false econqomy.
DISCLAIMER: All content is for guidance only and does not constitute financial advice.
www.petinsuranceinfo.co.uk is not authorised by the FSA to advise on insurance matters.
