How does pet insurance work?
Your guide to covering pet and vet expenses
You can't predict when or if your pet will have an emergency, but with a good pet insurance policy, you can rest easy knowing that if such a situation arises, you won't be forced to choose between your pet's health and your financial stability.
Kelli, a ConsumerAffairs reviewer from Georgia, signed up for pet insurance and ended up using her policy shortly afterward, when her cat experienced hypertrophic cardiomyopathy, a potentially life-threatening heart condition. “He has had to be hospitalized 5 times while we work to figure out what is causing it and get his medications right,” she said. “We would not have been able to afford the treatment he is getting if it were not for [pet insurance].”
Key insights
- Pet insurance costs vary by state, plan and pet.
- Many pet insurance companies will not cover preexisting conditions or pregnancy.
- The higher the deductible in a plan is, the lower the monthly pet insurance premiums are.
What is pet insurance?
Similar to human health insurance, pet insurance is a policy purchased by pet owners to cover a portion of the cost of veterinary care. This can include treatment for illnesses, injuries and, in some cases, preventive care and wellness checkups.
Policyholders pay a monthly premium and may have a deductible they must meet before the insurance company starts to cover costs.
Pet policies generally act as reimbursement plans. You pay your vet upfront and get reimbursed afterwards.
Types of pet insurance
There are three main types of pet insurance, covering accidents, illness and general wellness. Note that not all pet insurance companies offer all types of coverage.
- Accident only: Covers treatment for accidents, such as injuries from a car accident or ingesting foreign objects
- Accident and illness: Covers treatment for accidents as well as illnesses such as cancer, arthritis, allergies and more
- Wellness plans: Covers preventive care, such as vaccinations, flea and tick treatments and routine checkups
Some pet insurance companies offer add-ons or optional coverage for services like dental care, behavioral therapy and alternative therapies.
» MORE: What does pet insurance cover?
Pet insurance costs
The average monthly pet insurance premium for accident and illness coverage as of 2022 was $53.34 for dogs and $32.25 for cats, according to the North American Pet Health Insurance Association (NAPHIA). For accident-only coverage, costs averaged $16.72 per month for dogs and $10.18 for cats.
Policies come with an annual deductible, reimbursement rate and maximum annual coverage. Actual numbers vary from policy to policy, but most companies allow you to customize coverage to meet your pet's medical needs. Understanding these details will help you choose the best policy for your budget.
- Deductible: A deductible is the annual out-of-pocket cost you have to pay before coverage kicks in. Insurance providers typically allow you to select from a range of deductibles, often from $0 to $1,000. The lower the deductible, the higher your monthly premium.
- Reimbursement rate: When you create your policy, you'll also be able to select a reimbursement rate. Companies usually offer from 70% to 100% coverage. Once you submit a claim to your provider, they'll reimburse you up to that rate. For example, let's assume you have a policy with a $500 deductible and a 70% reimbursement rate, and you paid any of your deductible. On a vet bill of $1,000, the insurance company would reimburse you $350. As with deductibles, if you have a higher reimbursement rate, your policy will be more expensive.
- Maximum coverage: A pet insurance company will only cover a certain amount each year, usually between $2,000 and $30,000. However, some providers do offer unlimited coverage with a higher premium. If a more expensive treatment is required, the insurance policy won't cover any more than its maximum benefit.
Additionally, your pet insurance cost can be affected by where you live, especially if you live in a state with higher vet costs. Your pet’s breed and age can also affect the cost of insurance. Typically, insuring a younger pet may be less expensive, as they are generally healthier and have fewer preexisting conditions.
» MORE: Is pet insurance worth it?
Pros and cons of pet insurance
Many of our reviewers have found that pet insurance has saved them from going into debt. However, some reviewers, like Jason from Washington, were not able to get reimbursed for certain costs.
“Don't let your animal get hurt during the first year. They'll deny your claim and say it's a preexisting condition,” he said. “I'm out $ 7000.00 dollars cause my dog needed surgery. I should have listened to 3 veterinarians who said they wouldn't cover anything.”
As with any insurance policy, there is a risk that your provider will not cover all of your claims. It is important to weigh the pros and cons of pet insurance before deciding if it is worth it for your pet and budget.
Pros
- Save on vet bills: Pet insurance can significantly reduce the amount you have to pay for veterinary visits.
- Peace of mind: It's a safety net that provides reassurance you'll be able to afford care for your pet after an injury or illness.
- Vet flexibility: Most companies allow you to see any licensed vet, which can be helpful when you are traveling or facing an emergency.
Cons
- Exclusions: Most pet insurance policies do not cover preexisting conditions, food and vitamins, breeding and pregnancy, behavioral treatments, or boarding and kennel fees.
- Chance you won’t use it: As with your own health insurance, there is a chance you will spend money on premiums and don’t use the coverage.
- Still some costs: Even with pet insurance, you may still have to pay some costs, like your deductible, copayment and expenses that exceed coverage.
What to look for when buying pet insurance
Your pet's health needs are unique, so it's important to track down the right policy for them and for you. Consider your monthly budget and which coverage options you'll need to care for your pet. Here are a few things you’ll want to keep in mind when selecting a policy:
- Cost: Compare prices from different providers. Pet insurance policies typically run from $10 to $50 per month, though price is determined by the type of pet, your pet's age and breed, and your location.
- Pet eligibility: While age maximums aren’t common, insurance companies rarely insure pets younger than 8 weeks. Most providers offer plans for dogs and cats, but coverage for exotic pets is harder to find. You should also confirm there are no enrollment requirements, such as annual exams or vaccinations.
- Coverage and exclusions: Make sure the policy covers any conditions or medical needs your pet has. While preexisting conditions are mostly excluded, other exclusions will depend on the insurance company.
- Waiting periods: Insurance policies come with waiting periods for coverage. These can range from a couple of days for accidents to six months for orthopedic treatment.
- Maximum benefit: If you anticipate your pet having expensive treatments over the course of a year, consider a company with a high maximum benefit. Some companies even offer policies with unlimited coverage.
- Deductible: Your deductible should be an amount you can comfortably pay out of pocket. Most providers offer options from $250 to $1,000. Some companies offer $0-deductible policies, though these typically are pricey.
- Reimbursement rate: While a lower reimbursement rate will keep your monthly premium low, it will make your out-of-pocket costs significantly higher for expensive treatments. Do some budgeting on what you can afford in an emergency.
FAQ
What doesn't pet insurance cover?
Most pet insurance policies do not cover preexisting conditions, cosmetic procedures, breeding costs or behavioral treatments. Additionally, coverage doesn’t usually include any vitamins or food-related costs. Some plans may also exclude certain breeds or animals of a certain age.
Do all vets accept pet insurance?
Most pet insurance policies allow you to visit any licensed vet. Usually, you pay the vet directly and then submit a claim to your insurance company for reimbursement.
Can I insure an older pet?
While it's possible to insure older pets, it can be more expensive due to their increased risk of health issues. Some companies may have age limits for new policies.
When does pet insurance coverage start?
Most pet insurance policies have a waiting period between when you purchase the policy and when coverage begins. This can range from a few days to a few weeks, depending on the company and the type of coverage.
Bottom line
To decide whether you need pet insurance, consider if your budget could take a hit if you encounter a pet emergency. Additionally, consider your pet's age, risk factors, breed, health condition and lifestyle, as well as the cost of veterinary care in your area.
It's all about weighing the monthly cost of insurance against the potential out-of-pocket expense for medical emergencies or illnesses. If the peace of mind outweighs the cost of the premium, then pet insurance might be a good fit for you.
Article sources
- North American Pet Health Insurance Association, “Section #3: Average Premiums.” Accessed Jan. 2, 2024.
