Into Each Life Some Rain Must Fall

Greetings Bored Surfer!

Thank you for joining me for this, the April 2019 edition of BLOG blog.

In the United States, April is known as the month that features a day of Fools, Patriot’s Day (in honor of the battles at Lexington and Concord, not Tom Brady) and Easter (usually).  Depending on your location, you may also anticipate a lot of April showers. Hopefully, the waters in Nebraska will have receded before the arrival of any more significant precipitation.

Since the only certain things in life are death and taxes (If you haven’t filed by the April 15 deadline, please do so. The IRS took down Al Capone, they have no qualms about coming after you.), how best to deal with the overwhelming uncertainty of the world? Well, you do the best you can. You show respect and kindness to others, you enjoy the myriad of experiences you are offered, you pay forward some of the blessings you have received. You also minimize your risks by buying insurance.

Your dad (or mom) undoubtedly tried at some point to explain the concepts of insurance to you. In case you didn’t  pay as close of attention as you should have, I will now offer you a recap of the basics and a more detailed description of how this applies to you and your beloved pet, Wadsworth. (In case you are wondering, the title of this piece is a line from the poem The Rainy Day by Henry Wadsworth Longfellow.  Since he was from Portland, this fulfills my requisite famous Maine writer reference.  As a bonus, Wadsworth is fun to say. Actually, Bonus Wadsworth is even more fun to say, but I digress…)

The basic idea of insurance is to spread out risk. If a large group of people each pay a small amount, a large pool of money is available if a few of those people suffer a large loss. The loss could be your ship’s cargo, your house or car, or even your health, life or ability to work.

Now for a little bit of pertinent terminology:

At the gas pump, premium means extra expensive. In insurance world, it refers to the money you pay every month (or quarter or year) to maintain your coverage.

According to the Oxforddictionaries.com, policy is “a course of principle or action adopted or proposed by an organization or individual” or “a contract of insurance” or a US historical mass noun referring to “an illegal numbers or lottery game”.  An insurance contract states what conditions are covered (or not covered) and potential reimbursement if these conditions are met.

A claim is a demand for something due or believed to be due.  So if a situation arises that you believe your insurance covers, you file a claim, requesting that they pay their agreed-upon share. Sometimes claims are paid promptly and with a minimum of hassle. Sometimes, claims are denied, either because the situation is not covered or because the forms were filled out on a fruit roll-up or the forms got processed wrong and got turned into cheese or the new guy at the claims office spilled jellied moose nose all over it or the fax machine was hijacked by pirates from Tajikistan or it got wadded up and a dung beetle rolled it away or any number of other reasons.  When a claim is rightfully denied (because your policy doesn’t cover that situation) you can contact the company and eventually someone will explain this clearly.  When a claim is mistakenly denied, it can often be corrected by 6 or 7 seven extremely frustrating phone calls (with an estimated average hold time of 17.3 minutes) until someone finally transfers you to the lady who has the knowledge and skill to fix the issue.  Yes, this magical creature does exist. She is well-hidden, deep within the bowels of bureaucracy, but she does exist. I wish I could tell you how to deal with her directly in the first place, but alas, that kind of enlightenment is known only by the most elite Scientologists and a hermit that lives near Lake Titicaca. 

The deductible is the amount of money you will need to pay before the insurance company will pay anything.  If your deductible is low, it is more likely the insurance company will have to pay something, so your premiums will be higher. A high deductible means a bigger loss is necessary before the insurance has to pay, and you are responsible for a larger share of the expenses; this results in a lower premium. 

For insurance on your car, house, etc., the deductible applies to each occurrence.  Suppose you had car insurance (comprehensive and collision) with a $500 deductible. If you had an accident that resulted in $1500 in damage to your car, you would pay $500, the insurance company would pay the rest. If you had another accident a few months later, you would still have to pay the first $500 in repairs. Your insurance company is also going to be quite upset with you and not want to insure you anymore unless you pay higher premiums. 

The deductible for health insurance works a bit differently. Health insurance deductibles are cumulative for a calendar year. So if you go to the doctor or clinic or hospital multiple times during the same calendar year, the amount you pay each time is added together. When you have paid an amount equal to your deductible, then the insurance company starts paying their share (the size of their share depends on the particular policy) and continues paying their share of your covered medical expenses until December 31. Starting Jan 1, you have to meet your deductible again.

So, what is pet insurance?  There are a few different things it could mean.  For starters, legally, pets are considered property. However, they may be excluded from the personal property coverage on your homeowner’s insurance. This means that if your house burns down while Wadsworth is inside, the insurance company will pay to replace your couch, your TV and your didgeridoo, but not your beloved pet. This should not be much of a surprise, as we all know Wadsworth is priceless.

There is also liability insurance. This protects you in case someone else suffers damages and blames you, in the form of a lawsuit. In the case of a car accident, if you are at fault, your liability insurance pays the hospital bills for the injured people in the other car. If someone slips on your icy sidewalk, breaks their coccyx and sues you, your homeowner’s policy should cover the court costs and any payments required if you are found to be responsible. Homeowner’s insurance usually covers dog bites or other injuries from common household pets. There may be restrictions or exclusions if Wadsworth has injured someone in the past, or if he is of a breed that statistically causes a disproportionally large share of claims. If you are not a homeowner (or current-mortgage-payer-future-homeowner) you would be covered by renter’s insurance or you could buy a separate policy.

Now that you have checked with your insurance agent to see exactly what your insurance does cover, it is time to discuss the more common application of the term Pet Insurance – health insurance for Wadsworth.

Whether health insurance has done more good (covering expensive medical procedures people most people couldn’t afford) or harm (driving the profound increase in health care costs) in the area of human health care is a debate that is beyond the scope of this blog. I will focus primarily on the pet owner perspective – should you, Bored Surfer, consider getting pet insurance for Wadsworth?

Since the first pet health insurance policy was written (1890 for horses and livestock in Sweden, Swedish pets in 1924, British pets in 1947, a certain famous Collie in the US in 1982, and Canada in 1989, according to naphia.org) the market has expanded dramatically. There are more than a dozen companies, and a wide variety of plans. Though the plans vary in cost and coverage, here are some general guidelines that pertain to all of them:

  • You pay the vet bill, you submit the paperwork and the insurance company reimburses you. This is a very different procedure from using your health insurance at your doctor’s office. It also means you choose your vet (I recommend Best Care, obviously) without having to worry whether or not they are “in-network”.
  • Your policy has to be in effect before your pet gets sick or injured. Unfortunately, many people start to think about pet insurance when they suddenly have to take Wadsworth to the vet and are unpleasantly surprised by the bill. Buying pet insurance at that point would be analagous to Uncle Teddy shopping for car insurance while waiting for the tow truck to extract his Oldsmobile from Poucha pond. 
  • Pet insurance (at least in the US) does not provide 100% coverage. Pet insurance usually covers 70-90% of the amount that exceeds your deductible.
  • Pet insurance covers primarily accidents and illness. You can get policies that also cover your routine check-ups, vaccinations etc. but that is not their primary focus. After all, car insurance doesn’t cover oil changes, house insurance doesn’t cover new paint; those are considered routine maintenance. The purpose of insurance is not to cover all costs of ownership, it is to protect you from complete financial devastation. Pet insurance can also prevent you from having to consider euthanizing Wadsworth because you can’t afford intensive, expensive treatments.
  • Insurance costs will vary, but generally increase with age.  While the chance of illness increases with age, accidents can (and do) happen at any time. Coverage for accidents, as well as insuring Wadsworth before problems develop are important factors to consider.
  • Premiums also tend to be higher for certain breeds that tend to have a lot of ailments. Sorry Chesty XV, but Bulldogs are considered one such breed.
  • Certain restrictions may apply. Some conditions (usually pre-existing, congenital or hereditary) may be covered on a limited basis or not at all. There may also be a limit on benefits, either per condition, per incident, per year or lifetime. Note – prior to March 23, 2010, restrictions like this were standard operating procedure for human health insurance in the US. Your view on such restrictions will vary with your political inclinations.
  • Insurance companies exist for one reason – to make money. They need to take in enough in premiums (or investments made with those premiums) to cover all claims, pay all their expenses and turn a profit.
  • Insurance is a bit like gambling. You are spending relatively small amounts of money, with the possibility that you might get back a much larger sum. The house (insurance company) decides the rules, and the odds are definitely in their favor. You are, in a sense, wagering on whether or not some particular misfortune will befall you in a specified period of time. So if you pay your premiums year after year after year after year and never have a claim, congratulations – you dodged a financial bullet! If, on the other hand, you sign up for a multi-million dollar life insurance policy and die the next day, the insurance company will be making a major payout, with minimal cost on your part. You, however, will be dead, and your ghost (or re-animated zombie corpse) will have trouble cashing the check.

So, is pet insurance a good investment? Well, that depends on how you define investment. If you are hoping to get more money out than you put in, there are a lot of better places to put your money. If you want to purchase a little peace of mind, insurance is a good bet. It would be nice to know that if catastrophe struck in the form of trauma or disease, you would be able to provide the best possible care for Wadsworth, without having to worry (as much) about the bill. If you never need to use it, that’s even better. 

Don’t forget to do your homework. Check out several different companies. See what they cover (and what they don’t). Choose a plan that offers good coverage with premiums and a deductible you can reasonably afford, has a user-friendly claim procedure and is well-reviewed by its customer base. 

Some rain will inevitably fall, so do your best to protect yourself and your loved ones without getting soaked.

This concludes the April edition of BLOG blog. I hope you have enjoyed these delightful, insightful ramblings. Hopefully they provide you a little ray of amusement on a dreary day.

Farewell, Bored Surfer. Best wishes for fair weather and a dry basement.

Dr. Debbie Appleby