It seems many take the insurance route for the very large unexpected bill that you could have. I used to always insure my dogs, starting with one then a second. That was no problem as insurance premiums were reasonable, only claimed once in 14 years for an accident when out with the springer, a Sunday morning emergency call out for a dog with a gash in its leg down to the bone, not nice at all.
But even then the bill was less the cost of a years premium.
The problem of paying annual premiums start to come up when you end up with 4 or 5 dogs, it then starts to get a bit pricey. Did this for a few years, which was a good job as one of the cockers developed quite a few on going problems which were covered by the insurance and they paid out over £2,000, that was 6 or 7 years ago so would have been much higher now.
However when his next premium arrived, it had more than doubled. I then decided not to renew any of the insurances and put money away that I would have paid for premiums plus a bit extra.
Over the years this has covered all vets bills, and there is still over £3,000 in the dog fund with payments still going in monthly. So I am happy to keep doing this. But I would say if you only have one dog and can find an insurance policy with reasonable premiums it is worth taking out if you're not financially in a position to cover very large unexpected vets fees.