What is Pet Insurance (and Should You Get It?)

The first thing to know about pet insurance is that it typically only covers cats and dogs. But you should also be aware of other factors that make pet insurance unique: 

• Waiting period – Coverage is not immediate when you buy a policy. You’ll have to wait 24 to 72 hours for accidents, about 14 days for illnesses, and up to 12 months for certain conditions like cruciate ligament injuries (that result in limping).
• Pet age – Some companies allow you to get coverage for your pet when they are as young as six weeks old. However, not all provide comprehensive options for aging pets, and it might not always be financially wise to purchase senior pet insurance.
• Required check-up – Before your pet can be approved for coverage, some pet insurance companies require a complete physical exam or require all of your pet’s veterinary medical records. A physical exam can cost hundreds of dollars and is the sole responsibility of the pet parent (in other words, even if your pet is approved for coverage, you won’t be able to claim the exam as a reimbursable expense). Others, such as PetFirst, only require the most recent 12 months of medical records for review.

Claims process – With pet insurance you are sometimes required to pay out-of-pocket expenses first, then submit a reimbursement claim with your provider. The most common reimbursement options are 70%, 80% and 90%.

What isn’t covered?

Pet insurance plans generally don’t cover pre-existing conditions (i.e. illnesses that present before coverage starts), so it’s important to be aware of these to avoid surprises.

Also, most plans do not cover non-medical expenses like grooming, vitamins and orthodontic care. However, conditions like hip dysplasia, behavioral issues, hereditary conditions, check-ups and preventative care may or may not be covered. Therefore, when comparing insurance providers, be sure to read the fine print so you’re aware of the benefits each insurer offers before you sign a contract. 

Pet insurance premiums vary widely so it’s important to do your research to understand what’s included and how these match up with your needs as a pet mom or dad. 

In general, monthly insurance premiums range from $25 to $70 for dogs and $10 to $40 for cats. One of the biggest factors to consider is your desired level of coverage, which is often based on certain risk factors. For instance, if you are a cat owner, you might be willing to pay a few extra dollars a month for a plan that offers a higher payout for lymphoma treatment. 

You will also have to consider the species, breed, age and location. For instance, Great Danes can be up to 63% more expensive to insure than other breeds, according to Insurance Business America. Premiums also vary based on state. 

There are also two other factors to consider when it comes to cost: deductibles and maximum payouts:

• Maximum payouts – Many pet insurance policies have a cap or limit on payout benefits for your pet. These can be per incident, per year or over the life of the policy. Others like healthypaws have no maximum annual or lifetime payouts.
• Deductibles – In the pet insurance world, there are two types of deductibles: the annual deductible and the per-incident deductible. The annual deductible is more predictable because you only need to meet it once. The good news is that overall deductibles aren’t too exorbitant, ranging from $0 to $1,000, depending on the provider. Just like for your own health insurance, if you want a more affordable premium, your deductible will be higher. The reverse is also true. Note that the higher the deductible, the lower the reimbursement rate will likely be.

Pro-tip: In choosing a provider and plan that’s right for you, be sure to ask if there are any potential discounts that you can benefit from such as a reduced rate if you plan to cover more than one pet. 

Imagine that your healthy 1-year old pup accidentally swallows a tennis ball that requires treatment. The average cost of surgery to remove an intestinal blockage in dogs is $3,000, according to Pet Coach. Now, let’s assume that your premium is $50 per month with a $500 deductible and 80% reimbursement rate. That’s an annual savings of $1,300!

But, if your pet suffers from a chronic illness or is aging, pet insurance may not be worth it. 

Regardless of whether or not you choose pet insurance, you’re likely going to incur surprise expenses as a pet parent at one point or another. And it’s never too early to start planning for them. 

One of the best ways to do that is to create a special savings account that’s just for pet emergencies. Each month, you can sack away a few dollars from your paycheck so that when the unexpected happens, you don’t have to worry as much about how you’ll pay for your pet’s care. Instead, you can focus on what matters the most: spending time with your four-legged best friend.