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Understanding Pet Insurance: A Comprehensive Guide

Keeping your pet healthy and happy can be a pricey proposition. Buying pet insurance can help you handle some of the costs. Pet insurance generally covers accidents and injuries, and you can add on coverage for illness and wellness care. However, coverage can vary widely from one insurance plan to another, so it’s important to understand exactly what a pet insurance plan pays for before you purchase a policy.

Types of Pet Insurance Coverage

There are three general types of pet insurance: accident and illness coverage, accident-only coverage, and wellness plans. Here’s an overview of what each usually covers.

Accident-Only Insurance

This type of insurance covers injuries due to accidents such as:

• Emergency diagnostics and surgery
• Cuts and burns
• Broken bones
• Poisoning or ingesting foreign objects
• Animal bites
• Allergic reactions
• Prescription medications

It does not cover preventive care, illnesses, or pre-existing conditions.

Accident and Illness Insurance

In addition to all accident coverage above, this covers illnesses such as:

• Infections
• Digestive issues
• Diseases
• Allergies
• Diagnostic testing
• Prescription medications and treatments

It does not cover preventive care or pre-existing conditions.

Wellness Plans

Wellness plans cover preventive care such as:

• Vaccinations
• Wellness exams and testing
• Preventive medications
• Preventive dental care
• Microchipping
• Spaying and neutering

They do not cover accidents or illnesses.

What Is Covered by Pet Insurance?

Pet insurance typically covers the following issues, although coverage can vary depending on your provider and plan:

• Accidents and Emergencies
• Common Illnesses
• Chronic Illnesses
• Serious Illnesses
• Hereditary or Breed-Specific Conditions
• Tests and Diagnostics
• Medical Procedures
• Dental Disease and Dental Accidents
• Prescriptions
• Alternative Treatments
• Behavioral Issues
• Wellness
• End of Life Expenses

What Is Not Covered by Pet Insurance?

While coverage varies by insurer and policy, pet insurance usually doesn’t cover the following issues:

• Pre-Existing Conditions
• Accidents and Illnesses During the Waiting Period
• Elective or Cosmetic Procedures
• Grooming
• Experimental Treatments
• Breeding
• Abuse or Preventable Injuries
• Prescription Pet Food or Supplements
• Expenses Unrelated to Veterinary Services

How Much Does Pet Insurance Cost?

On average, pet insurance costs $116 to $625 annually for cats, and $204 to $1,263 annually for dogs, according to the North American Pet Health Insurance Association (NAPHIA).

Pet insurance premiums can vary based on several factors, including:

• Your pet’s age: Older pets typically cost more to insure than younger ones.
• Your pet’s species: Cats generally cost less to insure than dogs.
• Your pet’s gender: Females usually cost less to insure than males.
• The type of coverage: The more comprehensive your policy is, the more you can expect to pay.
• Coverage amount: Plans with higher payout limits (or no limits) typically cost more.
• Your deductible: This is the amount you’re responsible for paying before coverage kicks in. You can usually save by opting for a higher deductible.
• Your reimbursement rate: This is the percentage of covered care the plan pays for. Plans that pay a higher percentage tend to cost more.
• Your location: Veterinary care costs may be higher in one area than another.

How to Get Pet Insurance

You can get pet insurance by following these steps:

1. Figure out what coverage you need: Based on your pet’s health and habits and your budget, decide if you want accident and illness coverage, accident-only coverage, or a comprehensive package that includes a wellness plan.
2. Do your homework: Check various pet insurance websites to see which ones offer the coverage you’re looking for.
3. Get quotes from insurance providers: Provide some basic information about your pet to get quotes from insurance company websites. Be sure you’re comparing the same type and amount of coverage, reimbursement rates, caps, and deductibles. You can speed up the process by visiting a website that collects quotes from several pet insurance companies in one place.
4. Review coverage and compare: Once you’ve narrowed the field to a few options, dig into the details of coverage by reading their sample pet insurance policies. (You can usually find these on the website.) Carefully examine coverage limitations and exclusions to make sure the policy fits your needs. If there’s anything you’re not sure about, contact the insurer for an explanation.
5. Buy a policy: You can usually pay for pet insurance monthly or annually. Avoid a lapse in coverage by setting up autopayments.

Is Pet Insurance Worth It?

Even common veterinary procedures can quickly add up to hundreds or even thousands of dollars. If your savings account can easily cover those costs, you may not need pet insurance. For pet owners without a hefty financial cushion, however, pet insurance can be worth it to provide a safety net to help handle unexpected veterinary expenses.

For example, suppose your dog is diagnosed with cancer and needs treatment costing $12,000. You have pet insurance with an 80% reimbursement rate, no annual limits on coverage, and a $250 deductible, which you’ve already met.

Without pet insurance, you’d be on the hook for $12,000. With insurance, your responsibility is just $2,400 (20% of the total), a much more manageable amount.

The Bottom Line

Most pet insurance policies require you to pay your vet upfront and file a claim to get reimbursed. Even with pet insurance, you’ll need a way to cover veterinary care until your claim is processed. Put some extra money into your emergency fund each month or start a sinking fund for veterinary costs.

Using a credit card that offers an introductory 0% annual percentage rate (APR) on purchases can help you pay for veterinary care without accruing costly interest. Introductory 0% APR credit cards generally require good to excellent credit; check your credit score before applying.

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