How Does Pet Insurance Work?

Pet insurance might seem like just health insurance for your pet, but there are some differences that set it apart. Let’s take a closer look at what pet insurance is, how it works, what it covers, and what affects the cost.

What Is Pet Insurance?

Pet insurance reimburses you for certain veterinary expenses, like treatment and medication, that you would otherwise have to pay out of pocket. You can usually use any licensed veterinarian, including emergency clinics or specialty vets.

How Does Pet Insurance Work?

Unlike health insurance, which is usually billed to your plan by the provider up front, pet insurance typically works as a reimbursement after the fact. There are no networks or co-pays to worry about. You just pay the vet as you normally would and then submit your receipt to the pet insurance plan as a claim. Then they reimburse you directly for covered expenses, minus the deductible.

Your deductible is the amount you have to pay yourself before insurance kicks in, and it could be annual or per incident. If the deductible is annual you might cover it for the full year in the first claim. But if it’s a per-incident deductible, it comes out of the covered total for each and every claim.

Some plans let you choose your deductible amount, which corresponds to a higher or lower premium. You can also sometimes pick the reimbursement level that you receive after paying the deductible. That can range between 50% and 100%, with higher reimbursement levels usually meaning higher premiums as well.

There may be an annual maximum that your insurer agrees to pay each year. And most pet insurance doesn’t cover pre-existing conditions, so expect a vet checkup and a waiting period before the plan takes effect. This can be anywhere from a few days for accident coverage to a few weeks for illness coverage.

What Does Pet Insurance Cover?

Pet insurance doesn’t cover everything, so it’s important to know what’s included in your plan.

Common coverage categories:

• Accidental injuries like cuts, broken limbs, swallowed objects, and snake bites
• Illnesses such as allergies, infections, arthritis, diabetes, and cancer
• Hereditary conditions including glaucoma, cherry eye, epilepsy, hip and elbow dysplasia, and luxating patella

Common optional add-ons:

• Preventative care like annual exams, vaccinations, blood work, and dental cleanings
• There are also typical things that are not covered in most plans.

Common exclusion categories:

• Pre-existing conditions of any type
• Breeding costs including pregnancy and DNA testing
• Cosmetic or elective procedures like ear cropping, tail docking, or removing dew claws
• Experimental treatments
• Cruelty or neglect including fighting and racing
• Everyday costs like food, toys, grooming and boarding

Factors That Affect Pet Insurance Cost

Coverage for your pet usually runs a few hundred dollars a year, but there are factors that could make that amount higher or lower. For example, where you live may affect the pricing, because vet care costs more in metropolitan areas. Older animals cost more to insure because they’re more likely to have health issues. Same for certain breeds with common hereditary illnesses. Dogs cost more than cats, males cost more than females, and larger breeds cost more than small breeds because they’re more expensive to treat.

Animal-specific factors affecting cost:

• The type of animal
• The specific breed
• The pet’s size
• The pet’s age
• The pet’s gender
• Current health conditions

Coverage variables affecting cost:

• The insurance provider
• The type of plan
• The deductible
• The reimbursement level
• The annual limit
• Optional add-ons
• Where you live

Generally speaking, comprehensive plans covering both accidents and illnesses cost more than accident-only coverage. Optional add-ons are mostly à la carte and result in higher costs. But sometimes you can get a discount on multiple pets or if you choose to pay your premiums annually instead of monthly.

Does Pet Insurance Cover Any Pets Besides Cats and Dogs?

While dogs and cats are the most commonly covered animals, insurance is available for all types of pets. That includes birds, reptiles, rodents (like chinchillas, guinea pigs, hamsters, mice and rats), rabbits, ferrets, potbelly pigs, monkeys, other exotic pets, and even certain fish and horses. You may have to look harder for some of this special pet coverage, but chances are you can find it.

If you’re not able to secure suitable insurance for your pet, you might want to look at membership-based discount plans as an alternative. Unlike insurance, these plans give you the discount before you pay — even for routine care like annual checkups and vaccinations. However, they’re only available through participating veterinarians.

Should You Get Pet Insurance?

Like most insurance, pet insurance sometimes only really seems worth it when you need it. If you never use it, you might focus on how much you paid into it, and how that compares to what you paid in vet expenses that year. But if you encounter an emergency, you’ll probably wish you had it. So for many pet lovers, having pet insurance is absolutely priceless.

You might also want to check what you already have coverage for. While it doesn’t cover vet bills, some renters or homeowners insurance policies include protections for pet-related incidents or losses.

Common home insurance coverage:

• Liability covers lawsuits if your dog bites someone — unless the animal has a history of aggressive behavior
• Personal property coverage may include damage or theft of pet belongings, like clothing and accessories

Bottom Line

Pet insurance covers accidental injury that could be expensive to treat, as well as offers optional coverage for illnesses, wellness checks and more. So if your pet tends to get into situations that might lead to injuries, it may be worth it to consider coverage.

Costs can vary a lot depending on your pet, your location, and your coverage choices. But sometimes opting for higher deductibles or less comprehensive options can lower your premiums, as can discounts. In fact, chances are you can custom-tailor your pet insurance to provide exactly what you need at a price that’s more than affordable.