Read on to learn the logistics of pet insurance, what it does and doesn't cover, and how to choose the best plan for your dog or cat.
5.36 million pets were insured across North America by their owners in 2022. Should you be signing your pet up, too?
If you’ve ever enrolled yourself in health insurance before, you know it can be confusing. The idea of registering your furry friends for a pet insurance plan probably doesn’t get you too excited, either. Nonetheless, having pet insurance can be a beneficial way to offset the high costs of veterinary care, especially in the event of an emergency.
🚨 Disclaimer: Before jumping into this, read our Pet insurance glossary to familiarize yourself with the terms and definitions commonly used throughout this article.
Like health insurance, pet insurance is a plan you pay into each month so you can save money on potential medical bills for your dog, cat, or other pet. Unlike health insurance, though, pet insurance typically requires you to pay these bills upfront on your own and then wait to be reimbursed after filing a claim.
The policies usually have waiting periods before they kick in, and they get more expensive the older your pet is, so it’s best to enroll your furbaby as early as possible. When purchasing a plan, it’s helpful to get quotes from multiple providers so you can weigh your best options.
Every animal is different, so you should research plans that benefit the needs of your specific pet, taking into account their age, breed, location, and any pre-existing or genetic conditions. Insurance providers also consider these factors when determining your quote. For example, pet insurance costs more in cities than it does in rural communities, as urban pets will generally be exposed to more risks.
Unfortunately, while it is on the rise, many companies still don’t offer pet insurance as a benefit to employees, leaving you to pay for the plan entirely on your own. Read on to learn how you can find the best plan for you and your pet at a rate that you can manage.
Before signing up for pet insurance, you’ll want to familiarize yourself with the different types of plans available on the market. While providers will be able to present you a more detailed breakdown of what they offer, there are three main types of plans to choose from:
So you’ve enrolled in pet insurance – now what? As mentioned, pet insurance differs from health insurance in that you’ll need to pay up front for your veterinary bills, then file your claim afterward. This is a general step-by-step breakdown of the reimbursement process once you’ve reached your effective date:
Whether your pet is sick, injured, or is due for a regular wellness exam, you’ll want to schedule an appointment with your veterinarian. Be clear about costs and budget ahead of time so you can manage your expectations, taking into account deductibles, reimbursement and copay rates, and annual limits.
At the end of your vet appointment, you’ll need to front the cost of your bill entirely. Depending on the nature of your visit, this can be a lot, so having a pet savings account may help you cover this fee while you wait for reimbursement.
To file a claim for reimbursement, you can go through your insurer’s online portal, mobile app, submit by mail, or send a fax. Be sure to get a copy of the bill from your veterinarian to upload with your claim.
Once the pet insurance company approves the claim (this can take anywhere from a few days to a few months), your reimbursement can either be deposited into your account or mailed to you.
The process in which insurers calculate your reimbursement can be pretty mystifying. Are they just making up random numbers, or is there a method to their madness? To better understand this cryptic number, let’s take a look at an example of a pet insurance policy.
Let’s say you’ve hit your effective date and get a bill for $5,000 at your first vet appointment of your insurance policy term.. How much are you getting back after you file a claim?
First things first, insured pet owners will need to hit their annual deductible before receiving any reimbursement. If your deductible is $200, this means the remaining $4,800 on the above bill is what’s being considered for reimbursement.
You’ll also have to consider your reimbursement rate when it comes to the remaining balance. This is the percentage of money you’ll receive back from your provider after your deductible has been met, usually ranging from 75-90%, with the other percentage going towards your copay.
If your reimbursement rate is 80%, then your insurance will reimburse you 80% of that remaining $4,800, which is $3,840. The other 20%, or $960, is your copay. This means you’re paying $1,160 total (your deductible plus your copay).
Your provider will also have a cap on the maximum amount of reimbursements you will be eligible for in one policy term. If your annual limit is $10,000, then the $3,840 you were reimbursed will be subtracted from this limit, leaving you with $6,160 of potential future reimbursements until the cap resets in your next policy term.
👉 Insurance providers may also have per-incident limits, which are caps they have on certain incidents or illnesses. This figure is the maximum amount of money your insurer will reimburse you for a specific health problem.
Now that we’ve covered reimbursements, let’s discuss how much you’ll be paying for the pet insurance plan itself. On average, monthly premiums have been rising each year. But quotes vary based on a number of factors, starting with species.
Pet insurance for dogs is considered more expensive than most other pets. Dog owners paid an average of $16.70 a month for accident-only coverage and $53.34 a month for accident and illness coverage in 2022, according to NAPHIA. On the other hand, cat owners paid $10.18 and $32.25, respectively. Coverage for exotic pets like horses, birds, or reptiles is less common but still available!
Insurers will also be taking age, breed, and existing conditions into consideration when determining your monthly premium. For example, a healthy golden retriever puppy won’t cost as much to insure as a senior bulldog with a breathing problem. Size also plays a role, as large pets tend to have higher premiums than small pets because of their shorter life expectancy.
What your pet insurance does (and doesn’t) cover depends on the provider and plan you select. Understanding what the market typically offers for certain procedures and medications can help you find the best option for your individual pet. As you set out to insure your favorite furball, here’s what you can expect from different veterinary services.
With the basics out of the way, let’s dive a little more into each subject to work out the details.
No one wants to think of their pet passing away, but it can also be a consideration in your enrollment for pet insurance. The coverage you get for end-of-life services varies greatly among insurance providers.
For some, they offer euthanasia coverage, typically under accident and illness plans, but not cremation. Others may offer cremation but not euthanasia and others may not offer either.
Looking at all the different complex terms and numbers on a health insurance enrollment form, you may be wondering if it’s even worth the headache.
All in all, pet insurance can be extremely beneficial when it comes to offsetting expensive vet bills, especially when it comes to emergency care and surgeries. Some folks prefer having a policy as a backup plan to avoid impossible decisions should they not be able to afford a vet bill in the future. Even if your pet is generally healthy, accidents happen, and getting sick is as natural for our furry friends as it is for us.
Hopefully, with this information, you can make the best decision for you and your pet.
While both health insurance and pet insurance involve paying a monthly premium in exchange for reimbursements on medical services, health insurance will cover your cost of care at the time of your appointment so you only have to pay a copay, while pet insurance requires you to pay your vet bill upfront and file a claim for reimbursement afterwards.
The three main types of pet insurance are accident-only plans, which cover unexpected injuries or poisoning, accident and illness plans, which include non-injury related conditions like ear infections or arthritis, and wellness plans, which cover routine vet care and preventatives.
The benefits of pet insurance includes reducing expensive veterinary bills in the event of an emergency or when surgery is required. Cons can include high monthly premiums, having to pay upfront, deductibles, and no coverage for pre-existing conditions.
The waiting period is typically 14 days for pet insurance coverage to kick in, but plans vary with some taking as long as six months. Luckily, any injuries or illnesses that occur during your waiting period will not be considered a pre-existing condition.
Pet insurance covers prescriptions for medications unrelated to pre-existing conditions. For example, if a pet gets an ear infection and requires an antibiotic, your insurance will reimburse you for the antibiotic.
