HomeRenters InsuranceHow Does Pet Insurance Work? – Forbes Advisor

How Does Pet Insurance Work? – Forbes Advisor

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Dogs and cats can pull off some acrobatic stunts, but they don’t always stick the landing. Think of a dog who leaps into the air to catch a frisbee, only to land awkwardly and come up limping.

Accidents (like a broken bone) and illnesses (such as cancer) can cost thousands of dollars to treat. Pet insurance can be a good way to help offset these costs.

What Is Pet Insurance?

Pet insurance is a health insurance policy for your pet that covers medical expenses, such as X-rays, bloodwork, medications, hospitalizations and surgeries. Non-medical expenses could also be covered, such as pet boarding if you’re in the hospital or a reward for a lost pet.

Some pet insurance companies offer plans that cover other types of expenses, like vaccinations and wellness exams.

Types of Pet Insurance Plans

Pet insurance plans can typically be broken down into three types of plans:

  • Accident and illness plans. This is the most common type of plan and covers medical expenses for accidents (like broken bones and swallowed objects) and illnesses (like cancer, eye conditions and bladder infections).
  • Accident-only plans. These cover only accident-related medical bills (like bite wounds or toxic ingestion), and won’t cover illness-related problems. Accident-only plans are cheaper than accident and illness plans because they cover fewer problems.
  • Wellness plans. Some pet insurance companies offer an optional wellness plan that covers expenses such as routine wellness exams, vaccinations and flea, tick and heartworm prevention.

How Does Pet Insurance Work?

Most pet insurance plans are reimbursement-based. You’ll pay your vet bills up-front and submit a claim to your insurer. You can take your pet to a licensed veterinarian of your choice. Some pet insurance companies, such as Trupanion, can pay the vet directly.

When you submit a pet insurance claim, your reimbursement amount will depend on the type of plan you chose and the following:

  • Coverage limit. This is the annual amount that your plan will cover. Common coverage limit choices range from $5,000 per year to unlimited annual coverage.
  • Deductible. This is the amount of money you need to pay for vet bills before your coverage kicks in. Common pet insurance deductible choices range from $100 to $1,000.
  • Reimbursement level. This is the percentage you’ll be reimbursed for your pet’s vet bills. Common reimbursement choices are 70%, 80% or 90%.

Example of a Pet Insurance Claim

  • You take your pet to the vet because they have ingested foreign object.
  • After surgery, your vet bill is $3,500.
  • You pay your vet bill and submit a claim for reimbursement to your insurer, which includes a copy of the pet’s medical records and veterinarian invoice.
  • Your pet insurance company will review the claim, and if the problem is covered, you’ll be reimbursed up to your coverage limit. Your deductible and reimbursement level will apply.
  • Say you have a $250 deductible and an 80% reimbursement level. You will get reimbursed $2,600 ($3,500 cost of surgery – $250 deductible x 80% reimbursement level = $2,600).

What Does Pet Insurance Cover?

What’s covered by pet insurance depends on the type of plan you buy. Accident and illness plans cover medical expenses related to injuries and sickness like broken bones, cruciate ligament damage, cancer, ear infections, hereditary conditions and more.

Common examples of medical expenses that are covered by pet insurance include:

  • Emergency and specialty care
  • Testing and diagnostics, such as blood tests, CT scans and X-rays
  • Procedures, such as hospitalizations and surgeries
  • Holistic and alternative procedures, such as acupuncture and chiropractic
  • Prescription medications
  • Prescription food and supplements
  • Behavioral therapy

Accident-only plans only cover only medical expenses related to an accident, like a bite wound or broken bone.

What Does Pet Insurance Not Cover?

Common pet insurance exclusions include:

  • Boarding. Most pet insurance plans won’t cover boarding costs, but some pet insurance companies cover this expense if you are hospitalized.
  • Breeding, pregnancy or whelping. Expenses associated with breeding, pregnancy or whelping are usually excluded.
  • Cosmetic procedures. This includes tail docking and ear cropping.
  • Experimental treatment. Treatment and diagnosis that is considered investigational, experimental or not within the standard of care accepted by your state’s medical board is typically not covered.
  • Food, dietary and nutritional supplements. Your pet’s regular dietary expenses are not covered, but some insurers cover prescription food and supplements.
  • Grooming. This includes grooming services such as baths, shampoos, dips and nail trims.
  • Non-veterinary expenses. This includes expenses such as record access or copying, any license or certification (such as a dog license) and waste disposal services.
  • Pre-existing conditions. A pet pre-existing condition is an illness or injury that your pet had before your pet insurance coverage started. Some plans cover “curable” pre-existing conditions if your pet remains symptom-free for a certain period of time, such as 180 days.

How Much Does Pet Insurance Cost?

The average pet insurance cost for dogs is $44 per month and the average pet insurance cost for cats is $30 per month, based on Forbes Advisor’s analysis of pet insurance costs. That’s for a policy with $5,000 annual coverage, a $250 deductible and 80% reimbursement level.

Your pet insurance costs will depend on several factors, including:

  • Type of pet
  • Breed
  • Age of pet
  • Where you live
  • The type of plan you choose
  • Amount of coverage limit, deductible and reimbursement level

Is Pet Insurance Worth It?

When you’re deciding if pet insurance is worth it, look at monthly cost and your financial situation. An unexpected illness or accident can cost thousands of dollars in vet bills. If you don’t have the financial reserves to pay this out of pocket, pet insurance can be a good way to help offset major vet expenses.

The average treatment for cancer for a dog costs $4,100. If you can’t afford to pay out-of-pocket for your dog’s cancer treatment, pet insurance can cover the majority of this expense.

For example, the average treatment for cancer for a dog costs $4,100, according to a Forbes Advisor analysis of vet visit costs. If you can’t afford to pay out-of-pocket for your dog’s cancer treatment, pet insurance can cover the majority of this expense, minus your deductible and your share of the reimbursement level. If you had a $250 deductible and 80% reimbursement level, your out-of-pocket cost would be $1,020 ($250 deductible + 20% of $3,850 = $1,020).

How Do I Find the Best Pet Insurance?

You can find the best pet insurance for your budget and needs by determining the type of plan that’s suitable for you, deciding how much coverage will suffice and comparing waiting periods and prices.

Choose the Best Pet Insurance Plan for You

A comprehensive pet insurance plan that covers accidents, illness and wellness expenses is the most expensive type of plan because it covers the widest range of health-related problems. But some pet owners prefer a less expensive and scaled down option that covers only accidents.

Choose Your Annual Coverage Level

When you buy a pet insurance policy, you’ll often be able to choose an annual coverage limit, the pet insurance deductible amount and reimbursement level. You can get cheaper pet insurance premiums if you select a lower coverage limit, higher deductible and a lower reimbursement level.

For example, a plan with unlimited annual coverage, a $100 deductible and 90% reimbursement level will cost more than a plan with $5,000 of annual coverage, $500 deductible and 80% reimbursement level. But keep in mind that plans with lower coverage limits and reimbursement levels will result in higher out-of-pocket costs if you file a pet insurance claim.

Check the Pet Insurance Waiting Period

All pet insurance companies have a “waiting period,” which is the amount of time between when you buy the policy and when the coverage kicks in. Common pet insurance waiting periods are 14 days for accident coverage, 14 days for illness coverage and six months for orthopedic conditions, such as cruciate ligament damage.

Not all pet insurance companies have the same waiting periods. For example, Embrace pet insurance has a two-day waiting period for accidents and ASPCA pet insurance does not have a waiting period for orthopedic conditions.

Look for Pet Insurance Discounts

Here are some pet insurance discounts you might find:

  • Annual pay discount. You may be eligible for a discount if you pay your annual premium in one lump sum.
  • Bundle discount. Your insurer may offer a discount if you bundle your pet insurance with other insurance types. For example, Lemonade pet insurance offers a 10% discount if you bundle pet insurance with a Lemonade homeowners or renters insurance policy.
  • Military discounts. Some insurers offer discounts for active military members and veterans.
  • Multipet discount. Many insurers offer this discount if you insure more than one pet.
  • Spay/neuter discount. You could be eligible for savings if your pet was spayed or neutered.

Other Pet Insurance Comparison Factors

Consider these other factors if you’re shopping for a pet insurance policy.

  • Benefits. Some pet insurance companies offer benefits like a 24/7 vet telehealth line in case your pet gets sick in the middle of the night. Another example is Nationwide pet insurance, which offers preferred pricing on pet prescriptions at any Sam’s Club or Walmart pharmacy.
  • Exam fees. You’ll be charged an exam fee when you visit your veterinarian. Some pet insurance companies will cover this fee while others do not.
  • Optional wellness exams. If you want coverage for routine wellness exams, vaccinations, and flea, heartworm and tick prevention, you’ll need to add a wellness plan to an accident and illness plan. But not all insurers have this option.

Compare Pet Insurance Prices

Once you’ve narrowed down what type of plan you want, coverage levels and other benefits, it’s time to start shopping for pet insurance. You’ll find different prices among most companies, even if it’s for similar coverage.

The best way to find a good price on pet insurance is to compare pet insurance quotes from multiple insurers. You can get free pet insurance quotes:

  • Online. You can get quotes at an insurer’s website or by using a comparison provider to review several options at once.
  • Phone, email or in-person. You can speak with an insurance agent who works for a pet insurance company or you can contact an independent insurance agent who can gather multiple quotes from different pet insurers.

Find The Best Pet Insurance Companies Of 2023

How Does Pet Insurance Work FAQs

Does pet insurance cover dental problems?

Many pet insurance plans include pet dental insurance for expenses resulting from a pet’s dental issues, but not all do. If dental coverage for your pet is important to you, be sure to check that it’s included when considering pet insurance plans. Benefits vary by insurer so you’ll also want to read the fine print to find out if both dental accidents and illnesses are covered and under what criteria.

Can my pet insurance claim be denied?

Your pet insurance claim can be denied for several reasons, such as submitting a claim for a problem not covered by your policy. For example, if you have an accident-only policy and submit a claim for an ear infection, your claim is going to be denied.

Another reason your claim could be denied is because your pet has a pre-existing condition that is excluded from coverage, such as previous cruciate ligament damage.

If your pet insurance claim was denied and you disagree, you can typically appeal the decision. You may need to provide additional information, such as your pet’s medical records, lab results or X-rays.

Can I take my pet to any vet?

Yes, pet insurance companies allow you to take your pet to any licensed veterinarian, including specialists and emergency clinics.

When should I get pet insurance?

The sooner you buy pet insurance, the better. If your pet develops a condition like arthritis or heart disease, it will be considered a pre-existing condition and excluded from coverage. You’ll have to pay out-of-pocket for any vet expenses related to this condition.

Pet insurance may be more affordable than you think. We found that you can get cheap pet insurance for as low as $27 per month for a dog and $21 per month for a cat.

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