Having a plan with a reputable pet insurance company allows you and your vet to focus on your pet’s health and provide the best possible care without the added stress or constraints of unexpected costs. While pet insurance isn’t required, a policy is often well worth the investment as it can help keep your pet healthy and give you some much-needed peace of mind.
Pet Insurance at a Glance
- Most pet insurers reimburse you for covered vet bills, though a few can pay the vet directly, so you don’t have to worry about high out-of-pocket costs.
- The primary types of pet insurance include bare-bones accident-only coverage, more comprehensive accident-and-illness coverage, and wellness coverage, usually sold as an optional policy add-on.
- To maximize pet insurance, enroll your pet as soon as possible, read your policy's fine print, and submit claims on time.
How Pet Insurance Works
Pet insurance is effectively health insurance for your pet. You purchase a policy by paying a premium, usually once a month, though some insurers offer a small discount if you pay an annual premium at the start of each year. In exchange for this payment, the insurer covers a portion of your pet’s medical bills.
Unlike traditional (human) health insurance, however, pet insurance usually operates on a reimbursement model.
“After your pet receives care, you pay the veterinary bill upfront, submit a claim, and are reimbursed based on your policy’s terms, such as the deductible, reimbursement rate, and annual coverage limit,” says Dr. Liza Cahn, a veterinarian and consultant for Embrace Pet Insurance.
Some pet insurance companies, however, can pay your vet directly, allowing you to avoid hefty out-of-pocket expenses.
Assessing a Pet Plan’s Fine Print
It's important to note that pet insurance won't pay for all of your pet's medical care. For starters, most plans only cover a percentage of each bill (known as the policy's reimbursement rate), and virtually all providers exclude pre-existing conditions from coverage.
Plus, not all plans are the same. There are variations in inclusions, exclusions, coverage options, and other fine print based on plan type and insurer.
Ultimately, whether pet insurance is right for your family is a personal choice. However, in certain situations, it can be life-saving.
“As a veterinarian, I recommend pet insurance for most pet owners, especially those who have young and healthy pets, pets at higher risk of developing an illness (based on breed, lifestyle, etc.), families looking for peace of mind and security that their pet will be able to receive the care they need, and those for which large or unexpected veterinary costs would be financially difficult,” Dr. Cahn says.
Understanding Pet Insurance: Key Terms and Concepts
You'll notice several consistent terms as you explore policies from different pet insurance companies. By becoming familiar with these terms and how they affect policies (and pricing), you can make the most informed coverage decisions for your pet and budget.
Here's a brief overview of standard pet insurance terms and concepts.
Deductible
A pet insurance deductible is the amount you furnish out of pocket before your insurance company begins to reimburse costs.
“The most popular option is an annual deductible, meaning you only meet it once per year rather than per incident,” Dr. Cahn says.
Pet insurance deductibles generally run between $50 and $2,500. Higher deductibles lead to lower premiums but increase out-of-pocket costs.
Coverage Limit
The coverage limit is the maximum amount your pet insurance will reimburse you within a policy year. Most pet insurance companies offer coverage limits that start at $2,500 or $5,000.
“With some providers, you can select coverage limits up to unlimited to fit your financial needs,” Dr. Cahn says.
Lower annual limits lead to lower premiums, though you’re opting for less robust coverage.
Reimbursement Rate
The reimbursement rate is the percentage of eligible veterinary expenses your insurance will pay after meeting the deductible.
Dr. Cahn suggests thinking of a plan’s reimbursement percentage as the opposite of a traditional health insurance copay. So, if you have a plan with an 80% reimbursement rate, you effectively have a 20% co-pay.
“You pay 20% of the bill,” Cahn says. “The pet insurer pays 80%.”
Generally, pet insurers offer reimbursement rate options of 70%, 80%, or 90%, though there are a few outliers. Figo, for instance, includes a 100% reimbursement rate as an option for some pet owners. Higher reimbursement rates lead to higher premiums (and vice versa).
Plan Types
There are three major types of pet insurance plans on the market. Here’s a brief overview of how each one works.
- Accident-and-illness plans: These plans pay for veterinary care for various accidents and illnesses, such as allergies, broken bones, cancer, infectious disease, poisoning, diagnostic lab tests, treatments, and surgeries. Note that an accident-and-illness policy typically won’t cover pre-existing conditions, routine care services like vaccinations, spay/neuter surgery, or microchipping.
- Accident-only plan: Accident-only coverage is limited as it will only reimburse you for health issues related to unanticipated accidents, like broken bones, poisoning, cuts, wounds, and ingesting foreign objects. It’s considered a bare-bones plan because it won’t reimburse you for illnesses like allergies, diabetes, cancer, and infectious diseases. Not all pet insurance companies offer accident-only policies.
- Wellness plan: A wellness plan is designed to help offset the cost of routine care, like annual exams, vaccinations, blood and urine testing, spay/neuter procedures, and microchipping. It’s usually offered as an add-on to accident-and-illness or accident-only coverage. Some pet insurers offer only one wellness plan, while others advertise different tiers, each with their own specifications.
Expert intel: Accident-and-illness plans are generally the most popular plan type among pet parents as they offer the most comprehensive coverage. However, they're also more expensive than accident-only and wellness plans. Accident-only plans are often an option for older pets priced out or ineligible for more robust coverage.
Waiting Period
Almost all pet insurance plans have a waiting period, a set time between purchasing your policy and when your coverage begins.
Typically, waiting periods are one-to-14 days for accidents and 14-to-30 days for illnesses. There are sometimes special waiting periods for select issues, like canine orthopedic conditions.
Common Coverages
Most pet insurance plans cover the following:
Allergies | Injuries | Select prescription medications |
| Alternative therapies | Broken bones or fractures | Surgeries |
| Cuts and wounds | Cancer | Treatments |
| Emergency accidents | Foreign object ingestion | Poisoning |
| Gastrointestinal health problems | Hospitalization | Diagnostic and lab tests |
Common Exclusions
While pet insurance is often comprehensive, it usually excludes these items:
- Bilateral conditions, such as hip dysplasia or cruciate ligament issues
- Pregnancy and birth
- Pre-existing conditions are illnesses or injuries that exist prior to coverage, like arthritis, diabetes, or cancer
- Elective or cosmetic procedures, such as nail trimming or ear cropping
- Routine care, unless it’s covered under a wellness add-on
- End-of-life expenses
- Nonstandard veterinary services, such as grooming, boarding, and behavioral training
How to Use (and Maximize) Your Pet Insurance
These expert tips from Dr. Cahn can help you make the most out of your pet insurance.
- Do your research: There is no shortage of pet insurance companies. To make your search for the right provider and policy a bit easier, ask family, friends, and your veterinarian for recommendations. Once you find a few providers you like, compare online quotes and coverage options. If you go with the first insurer you see, it can be challenging to maximize your coverage as the plan may not include what your pet needs.
- Understand your policy: Pet insurance policies vary greatly. "Familiarize yourself with the terms of your policy, such as the deductible, reimbursement rate, and coverage limit," says Dr. Cahn. If something doesn't make sense to you, don't hesitate to contact the pet insurer directly for clarity.
- Keep veterinary records: Maintain thorough veterinary records to simplify claims and ensure a smooth reimbursement process. The more information you have to support your claims, the better.
- Submit claims promptly: File claims right after veterinary visits to avoid delays with reimbursements. Most pet insurers let you complete the process in your online portal or through their mobile app. If your pet insurer offers direct pay, take advantage of it.
- Utilize wellness rewards: Add a wellness program to your plan to save on routine and preventive care, like vaccines and dental cleanings. "Keeping up on preventative care, such as annual vet exams, vaccines, and screening diagnostics, can help catch potential issues early, when they may be easier and less costly to treat," says Dr. Cahn.
- Begin coverage early: Enroll your pet early, ideally when they’re young and healthy. This way, you avoid exclusions for pre-existing conditions. If you wait too long, you may have to settle for higher rates or be stuck with a policy that doesn't check off all your boxes.
- Customize and review your coverage: Adjust your policy to balance premiums with out-of-pocket expenses. Some insurers allow you to modify deductibles, reimbursement rates, and coverage limits to best suit your family's needs. Review your coverage regularly to make sure it's still a good fit.
Frequently Asked Questions
What Is the Purpose of Pet Insurance?
Pet insurance is designed to reduce the out-of-pocket costs incurred when you take your pet to the vet after an accident or injury. A pet wellness plan can also help you save money on preventative or routine care.
What Are the Three Types of Pet Insurance?
The three types of pet insurance plans include accident-and-illness coverage (generally the most popular plan type), accident-only coverage, and wellness coverage. A wellness plan is usually an add-on to an accident-and-illness or accident-only policy.
Does Pet Insurance Pay You or the Vet?
Some pet insurers, including Trupanion, Healthy Paws, and Pets Best, offer direct pay, meaning they can pay eligible vets directly. Most providers, however, require you to cover vet expenses out-of-pocket and eventually reimburse you after you submit a claim, usually on their website or mobile app.
