Pet insurance is a healthcare policy for pet that compensate for certain medical expenses. This protects us against the risk of paying high medical care fees or worse, having to put our pet down because we can not afford a surgery. If a surprise accident or illness does hit, having an insurance plan can be a lifesaver. However, not all illnesses are covered by pet health insurance plans, so we should read the fine print on our plan before we buy.
When it comes to pets, they need a lot of care, and as a pet owner, you are probably used to picking up food and regularly getting your pet checkups at the vet. But if you are looking for ways to cut back financially while still providing the best care possible for your pet, a pet insurance policy might be right for you.
What is insurance?
The concept of insurance is very simple to understand. We pay a monthly or yearly fee to the insurance company to insure our life, health, vehicle, property, etc for a certain period of time. In return, the insurer pays for the financial damages in case of any harm to the insured person or object.
So we are transferring the risk of a financial loss we might experience due to life’s uncertainties to an insurance company for a small fee. For example, if we meet with a car accident and need to be hospitalized. Our health insurance policy will cover the medical costs for hospitalization. And, our car insurance will pay for the damages to our car. Meanwhile, if we die during the accident, our family will receive a lump sum amount for our term insurance.
Summary
In simple words, Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.
What is pet insurance?
Pet insurance is an insurance policy bought by a pet owner which helps to mitigate the overall costs of expensive veterinary bills. This coverage is similar to health insurance policies for humans. Pet insurance will cover, either entirely or in part, the often expensive veterinary procedures. Evaluating and comparing pet insurance plans is necessary in order to find the right plan for you.
- Pet insurance is a policy purchased by a pet owner to offset the overall cost of their animal’s medical bills.
- Similar to human health insurance, pet insurance relates specifically to pets and veterinary costs.
- There may be an out-of-pocket deductible payment before a plan pays a percentage of covered procedures.
As with human health insurance, there is usually a deductible which is an out-of-pocket expense before the coverage begins. Most providers will base the premium payment on the average cost of veterinary care in the owner’s region. Also, the policy may not cover all veterinary procedures.
History of Pet Insurance
The first offerings of pet insurance in the United States came in 1980, but its use in other parts of the globe stretches back to 1890. Canine television star, Lassie, became famous for having her owners buy a policy for her care in 1982. The insurance covering the Rough Collie’s health and well-being and came from Veterinary Pet Insurance (VPI).
Since that beginning, the popularity of the product has grown. According to the North American Pet Health Insurance Association (NAPHIA), and as reported by The New York Times more than two million pets were insured in 2017. Further, the articles explain the 2017 number represents a rise of 17% from the 2016 figures.
Summary
Nationwide sold its first pet insurance policy in 1982 under its subsidiary Veterinary Pet Insurance Co.
Real World Example of Pet insurance
Even a healthy pet has necessary expenses that a new owner must cover. Consider this hypothetical example. When the Fosters adopted Rufus, an adult rescue dog, they knew that they would have some expensive first-year costs. They knew the dog would need to be examined by a vet (up to $90), spayed or neutered (up to $200), given blood work to test for general health and typical diseases (up to $90 per test) and given vaccines ($20 to $150 in the first year and $100 each year after).
In total, the Fosters would need to shell out between $400 to $550 for their new pet in its first year in their home. If the pet incurred any other issues during the year, such as more blood work, medication or an emergency visit, the costs would end up being even higher, potentially more than $750 per year. Since the average price for pet insurance in 2017 was $516 per year, paying the insurance in the first year of owning Rufus made sense to the Fosters.
Pet Health Insurance Explained
Pet insurance is a way to save on veterinary costs when your pet gets sick or is injured. Most pet health insurance plans are paid on a monthly schedule and cost a few hundred dollars a year. By paying the insurance premium, you can get most medical costs reimbursed (although coverage tends to exclude hip dysplasia, a common dog ailment, and preexisting conditions).
As with regular health insurance, the policyholder pays a small portion of the bill and the insurance company pays the remainder. Unlike regular health insurance, you do have to pay out of pocket first. After you pay the vet, you can file a claim with your insurer to be reimbursed.
| With Pet Insurance | Without Pet Insurance |
|---|---|
| * We pay a premium every month to secure coverage if an accident or illness occurs |
- Treatments can be fully or partially reimbursed by your lender|We pay out of pocket in full for all medical treatments|
While paying monthly premiums can add up to a few hundred dollars per year, the benefit of pet insurance is that cost will be less of a factor when deciding whether to go through with a major procedure. Many times, pet owners without insurance can’t afford to put their savings towards a large medical expense and are forced to put their pet down. When deciding if you should get pet insurance, it’s important to consider the huge cost of major medical treatments.
Without insurance, illness and injury treatments can cost pet owners hundreds or thousands of dollars per incident. If your dog or cat gets cancer, the radiation therapy can cost as much as $5,000 or $10,000. Surgeries for tumor removal or to rectify another serious condition can total anywhere from $3,000 to $6,000. However, if you put $30 to $40 dollars a month towards a pet healthcare plan, you can reduce the immediate out of pocket price of medical procedures by thousands.
Summary
Before purchasing, we should make sure that we are clear about the breadth of our specific contract. Standard pet insurance will cover most accidents and illnesses, but insurance providers will exclude some common things.
How Pet Insurance Works?
For preventing people from getting insurance when their pet is already sick, companies have a waiting period between when we buy our policy and when illness coverage begins. For accident coverage, the waiting period is usually a few days. Insurers will require our pet to get a check-up before our coverage kicks in to establish any pre-existing conditions.
To get reimbursed by our pet insurer, we must pay out of pocket first and then file a claim afterwards. Insurers will evaluate our claim and, if approved, either direct deposit us the reimbursement funds or send a check in the mail. This process usually takes two to three business days, though it can take longer than a week for more complicated claims or if we receive reimbursement funds in the mail. Our reimbursement depends on how our plan is structured, and the main parts are:
- Deductible: The money we have to pay towards a bill (either per year or incident) before the insurer pays. Ranges from $0 to $1,000.
- Reimbursement level: After the deductible is paid, the percentage of the bill that will be reimbursed by the insurer. Usually 50% through 100%.
- Annual max: The maximum amount our insurer will pay in medical bills each year. Any charges incurred above the max will be paid out of pocket.
For example, our plan has a 100% reimbursement level, $50 deductible and a $10,000 annual max. If our pet gets into an accident that ends in $15,000 of medical bills, we “pay” for the first $50, and the insurer would reimburse us for $10,000, and we are responsible for the remaining $4,950.
Summary
For pet insurance you should visit any licensed vet, emergency clinic. There’s no network of providers to worry about. Pay your bill at the vet, then send us your claim along with vet records and an invoice from the visit.
Best Pet Insurance Companies
- Pets Best: Can cover older animals
- ASPCA: Good option for multiple pets.
- Petplan: Coverage for pets begins early at six weeks old.
- Trupanion: One straightforward policy that covers hereditary conditions.
- Nationwide: The best company that insures exotic animals.
- Embrace: High coverage for dental illnesses.
- PetFirst: For pet owners who want preventive care coverage.
- Pet Assure: A discount club; not actual insurance.
- Healthy Paws: Best Value with reimbursements fulfilled in as little as two days
- FIGO: Could pay 100 percent of covered expenses.
Pets Best: Coverage options for older animals
Most pet insurance plans would not write a new policy for an older pet. 12 is a common cut-off age for dogs and cats.
Pets Best does not have a maximum age limit so we could still get coverage on our aging pet. But, like all insurers, Pets Best would not cover preexisting conditions.
Why did we choose this plan
So, if we have a healthy pet who’s getting on up there but has been healthy so far, Pets Best could be an option. Most plans cover accidents and illnesses only, but we could add-on wellness coverage.
we could buy a plan with up to 90 percent reimbursement. If we on a budget and want more marginal protection, consider Pets Best’s 70-percent reimbursement rate which could cost only $9 a month.
ASPCA: Good option for multiple pets
The American Society for the Prevention of Cruelty to Animals offers a pet insurance policy underwritten by the United States Fire Insurance Company.
Why did we choose this plan
This policy stands out because of its 10 percent discount for multiple pets and because one policy can cover all our pets. There is no network, we could visit any vet in the U.S. or Canada
ASPCA’s Complete plan covers accidents and illnesses and even behavioral health issues. It does not cover routine wellness visits, though you could add a wellness plan for an extra fee if you wanted.
The 10 percent discount for multiple pets applies to each additional pet you add to the policy. The most expensive pet to insure will not receive the discount but all your other pets can.
You could get up to 90 percent reimbursement for covered costs deposited directly or paid via check. You can file claims online or by mail.
Petplan: Best for Early Coverage
A lot of conditions can be easily deemed as pre-existing, rendering them uninsurable by most pet insurance companies. We can avoid this by buying a pet insurance plan as early as possible.
Petplan insures pets beginning at six weeks old for puppies and kittens. When we buy a policy this early, we would not have to worry much at all about preexisting condition exclusions.
Why did we choose this plan
Monthly premiums start at $19 for both dog insurance and cat insurance. Annual benefit caps can be set anywhere between $2,500 to unlimited, while deductibles can range from $100 to $1,000.
Reimbursements can reach 90 percent and any claims may be submitted online, via fax, snail mail, email, or mobile app.
Petplan also covers some hereditary and congenital conditions as long as symptoms were not present before we bought coverage.
Trupanion: One Simple Policy
Trupanion stands out from the field by offering just one policy, for both dogs and cats, regardless of the animal’s breed, age, or gender.
There are no set limits for any benefits, whether per-incident, monthly, or lifetime, and we could even set our deductible at $0. Monthly premiums start at $59 for dogs and $32 for cats.
Another big selling point for Trupanion:
This company can cover hip dysplasia and other hereditary conditions like diabetes, thyroid disease, and upper respiratory infections after the determined waiting periods are up.
Trupanion encourages pet owners to enroll their animals while they are young and healthy to make sure any future conditions are covered by the policy. Other coverages such as physical therapy and acupuncture can be added to your policy at an extra cost.
Why did we choose this plan
If our veterinarian uses Trupanion’s direct payment software, we would not have to file a claim for our reimbursement. The company will pay the vet, so our only out of pocket expense will be a deductible if it applies to us.
Nationwide: Coverage for Exotic Animals
A study published in 2018 by the American Veterinary Medical Association reports that 14 percent of American homes have at least one specialty or exotic pet. Nationwide is the only pet insurance company of its size that offers coverage for exotic animals.
Why did we choose this plan
Nationwide can cover most birds as well as mice, lizards, goats, guinea pigs, turtles, snakes, ferrets, and many more.
The company offers two types of reimbursement models. The first is based on a percentage of the invoice (up to 90 percent) and has no limits. The second has a benefit schedule and reimbursements are capped at a set amount depending on the condition.
Annual deductibles can be either $100 or $250, while all claims can be filed via snail mail, fax, or email.
Some species of exotic animals are not eligible to be insured by Nationwide, including those that fall under venomous or endangered categories, and any animal not listed on their website.
Nationwide’s monthly premiums for more traditional pets start at $34 for dogs and $18 for cats.
Embrace: Best for Pet Dental Care
Embrace provides high coverage for dental illnesses: $1,000 per policy year in most states.
Why did we choose this plan
The company covers extractions, root canals, crowns, gingivitis, and broken, chipped, or fractured teeth.
And while routine care like cleaning and annual checkups are not included in the policy as is the case with most insurers they can be reimbursed by adding on a wellness plan at extra cost.
Another benefit of Embrace is its shrinking deductibles. They can be set between $100 and $1,000 and every year you don’t file a claim, you’ll receive a $50 reduction. If our pet is healthy, our deductible can be reduced down to zero.
PetFirst: For pet owners who want preventative care coverage
A lot of pet insurance plans cover accidents and illnesses but skip preventative care reimbursements. This is good for many pet parents. After all, we can plan in advance for the wellness care bill.
But some households do want help paying for preventive medicine for their pets, partly because a wellness plan helps them remember to schedule these easy-to-put-off visits.
Why did we choose this plan
PetFirst Pet Insurance excels with routine care coverage because it defines preventive care so broadly. We could buy a plan to cover our pet’s vaccines, dental care, parasite prevention, spaying and neutering, and even behavioral training.
PetFirst is owned by MetLife, a leading dental, health, and auto insurer. PetFirst offers three plans, each with a $250 deductible and 80 percent rate of reimbursement for covered expenses. Each plan sets a different annual cap on expenses per year.
Compared to many companies, PetFirst offers a simple approach to coverage.
PetAssure: A non-insurance option for exotic animal owners
PetAssure is not really an insurer; it is a cost-sharing discount plan that could help save us money on unexpected pet care especially if we have a thing for exotic animals. PetAssure covers birds and fish, amphibians and reptiles, large cats, monkeys, and even kangaroos.
Why did we choose this plan
Because it is not an insurance plan, we would not have a deductible or a cap on payouts or a waiting period. PetAssure doesn’t differentiate between wellness care and an illness plan or accident plan.
This can feel like a breath of fresh air when we are accustomed to dealing with an insurer’s red tape. But do not sign up too quickly. You also won’t have the state oversight and consumer protections that automatically protect you when you buy insurance.
And, in exchange for our monthly fee of at least $10 a month, we will be receiving discounts not reimbursements. Our vet must be a PetAssure participant to give the discount, too.
Healthy Paws: Best for Value
Healthy Paws Pet Insurance offers dog insurance and cat insurance This company stands out because it does not cap reimbursements. Once we pay our deductible, there is no limit on the amount our policy can reimburse we either monthly, annually, or per incident.
Why did we choose this plan
We can submit claims via email, fax, online, or using the Healthy Paws’ mobile app. Policyholders can receive reimbursements of up to 90 percent via mailed check or direct deposit. The company claims that 99 percent of its reimbursements are processed within two days.
Plans start at $15 per month for cats and $20 for dogs, with no limit to how many claims we can make. Like all pet insurance companies, Healthy Paws does not cover preexisting conditions.
These plans do cover accidents, illnesses, surgeries, prescription medications, hospital stays, and emergency care, among other expenses.
FIGO: Has a 100 percent reimbursement option
This company has been around less than 10 years but has been growing in market share for two reasons: easy online access and robust coverage.
Why did we choose this plan
All policyholders can use FIGO’s nice app and 24/7 customer service. We can chat online with a customer service representative and set our app to remind us about our pet’s veterinary appointments.
FIGO also makes shopping simple. All its plans cover the same expenses hospitalizations, emergency care, diagnostic testing, hereditary and congenital conditions, cancer treatments, and chronic conditions.
FIGO’s three plans vary only with the maximum payment allowed per year. The most expensive plan does not cap expenses.
Frequently Asked Questions
"It’s common to pay $300 a year or more for pet insurance. Over the life of a dog or cat that might be $5,000 or more. Our conclusion is that for a generally healthy animal this insurance is probably not worth the cost,” says senior editor Tobie Stanger.
This refers to all vet care and procedures to prevent illness and keep your pet healthy. This usually includes: spaying and neutering, annual checkups, vaccinations, flea & tick control, heartworm medication, teeth cleaning, ear cleaning, and microchipping. These are almost always excluded from pet insurance coverage.
Costco members get their first month of pet insurance for free. Customers can buy Accident Coverage of up to $5,000 annually or Accident and Illness Coverage of $7,500 or $15,000 annually.
Costco offers life insurance through Protective, a reputable company with great customer service. While having your life insurance policy last forever may sound good, permanent life insurance policies, like universal and whole life insurance, aren’t the best option for most people.
Conclusion:
Pet insurance can help us save money on routine vet visits and everyday preventive care. The policies also cover emergencies to help ease the financial burden when our pet gets a little too curious, and we are left with the vet bill. Pet insurance can help us have peace of mind knowing any accidents or injuries that might occur are covered.