Table of Contents
- Pet insurance is health insurance for pets and it can help reduce your out-of-pocket costs for veterinary care from 50% to 100%
- How much you’ll save with pet insurance varies based on your level of coverage, deductible, reimbursement percentage, and premium
- There are varying levels of coverage and different types of pet insurance plans to choose from
- There are some things pet insurance does not cover, including preexisting conditions, it’s important to be educated on your plan
What is Pet Insurance?
Pet insurance is essentially a health insurance plan for pets that can cover a variety of accidents, illnesses, and diseases. Some pet insurance also offers coverage for preventative care.
Like all types of insurance, pet insurance plans have different levels of coverage to choose from. They also have monthly premiums, deductibles, reimbursement percentages, and exclusions that can all affect your out-of-pocket costs.
What Does Pet Insurance Cover?
Pet insurance can cover many different things depending on the plan but there are three main types of plans to choose from:
Accident-only plan: covers accidents and injuries such as broken bones, hit-by-car accidents, wounds, toxic ingestions, foreign body removals, etc.
Accident and illness plan: covers all accident-related injuries such as the above plus disease and illnesses such as cancer, diabetes, kidney disease, respiratory infections, bladder stones, etc.
Wellness plan: typically offered as an add-on to other plans and covers preventative care such as annual exams, dental cleanings, vaccinations, and routine health screenings.
What Does Pet Insurance Not Cover?
Every pet insurance plan has different exclusions on coverage but as an industry standard, most do not cover preexisting conditions (any medical problem your pet had prior to enrollment) or any treatment deemed non-medically necessary. This includes things like grooming, boarding, cosmetic procedures, and any veterinary costs related to breeding your pet.
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How Does Pet Insurance Work?
Similar to human health insurance, pet owners can enroll their pet in a plan, pay a monthly premium, and have their pet’s veterinary bills covered. Coverage can range from 50% to 100% after a deductible is met.
Also like human health insurance, pet insurance has a claims process which involves filing a claim with your insurance company and submitting copies of your pet’s veterinary records and bills. The claims process can differ from one company to the next but in general, there are two models, direct-to-vet payment or owner reimbursement model.
On an owner reimbursement model, you’ll have to pay your pet’s medical bills upfront and be reimbursed later by submitting a claim to your insurance company. On a direct-to-vet payment model, you’ll likely only need to pay a portion of the bill, or, a copay, upfront. The veterinary hospital will then submit the claim to the insurance company directly for the remaining, similar to how human health insurance works.
How much does pet insurance reimburse?
How much your pet insurance plan will cover depends on your individual level of coverage and deductible. Reimbursements can range from 50% to 100% but most pet owners have a plan in the 70% to 90% range.
For example, if your pet needs emergency treatment costing $2,000 and your coverage level is 80%, you’ll be reimbursed $1,600 (after your deductible is met).
Find out more? See our article on what is a good deductible for pet insurance.
Understanding Some Key Pet Insurance Terms
Every pet insurance policy is different but most include the following aspects:
Premium:
A premium refers to the amount you pay monthly for your pet’s insurance policy. Premiums can range from $20 to $100 per month but the average pet owner pays somewhere between $30 and $60. Premiums are determined based on your pet’s age, breed, sex, and location.
Deductible:
The deductible is the amount of money you will be responsible for paying before the insurance will reimburse. Most pet insurance policies have a fixed annual deductible that can range anywhere from $50 to $1,000. Most pet insurance policyholders have a deductible in the $250 to $500 which is typically considered a “good deductible.”
Some pet insurance policies also have a per-incident or per-condition deductible, meaning that the deductible won’t apply for conditions that occur more than once within a policy year. Per-incident deductibles can vary widely by insurance company but are usually under $100.
Reimbursement Percentage:
This refers to the percentage of your veterinary bills the insurance will pay after the deductible has been met. Some insurance companies offer multiple percentages to choose from while others offer one standard rate.
Reimbursement percentages can range from 50% to 100% but most policies fall between 70% and 90% which is often considered a good level of coverage.
Caps on Coverage or Limits:
Your insurance plan may include some statements regarding caps on coverage or limits. This pertains to the maximum amount a policy will pay out and is usually broken into three categories.
Per-incident limits: This puts a cap on how much you can get reimbursed for a single injury or illness. For example, your pet insurance plan has a $5,000 per-incident limit on hip dysplasia but your pet’s surgery will cost $6,000, the remaining $1,000 will not be covered.
Annual limits: Also known as a maximum annual payout, this is the limit on how much the policy will cover annually. Once you hit the annual limit, you will be responsible for paying your vet care costs for the rest of the policy year. Not all insurance policies have annual limits but the ones that do usually range from $5000 to $10,000.
Lifetime limits: This is the total limit an insurance company will pay out for the life of your pet. Once you reach this limit, your coverage essentially ends. Not all insurance policies have lifetime limits but the ones that do usually start at $10,000.
What is the best pet insurance plan?
The best pet insurance plan will be the one that fits your budget and has good coverage for your pet’s unique needs. Unfortunately, there’s no one-size-fits-all plan. Every plan will have its pros and cons and what may be the best pet insurance plan for one type of pet may be lacking coverage for another.
Tips for finding the best pet insurance plan:
- Research and compare, there are many to choose from
- Take into consideration any common conditions for your pet’s breed and check for any breed-specific limitations
- Talk to your vet, they may have recommendations
- Always read the fine print before signing any policy
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