Pet Insurance Guide
Why Pet Insurance?
That cute little puppy you adopted from a neighbor may have been free, but as he grew, so did the vet bills! Regular examinations, vaccinations, and preventive medications can be quite pricey, and a pet emergency or a chronic medical condition can be downright expensive.
In fact, according to CNBC, the average cost for an unexpected veterinary visit can run between $800 and $1,500.
While this is a financial blow if you do have the money, a pet emergency can be absolutely devastating when treatment is unaffordable. Every day, veterinarians must have heartbreaking discussions with their clients about whether to forgo treatment on their pets … or even whether to put their beloved pets to sleep.
As a cushion against these kinds of unexpected costs, a growing number of people are protecting their furry family members with pet insurance. If you’re thinking of getting pet insurance, it helps to understand what it is, what it covers, and how it works before choosing the best pet insurance.
What is Pet Insurance?
Because regular vet visits aren’t cheap and emergency vet visits can cost into the hundreds – if not thousands – of dollars, pet insurance is an excellent way to protect your furry family members, as well as your wallet.
Pet insurance isn’t like human health insurance, however. According to The North American Pet Health Insurance Association (NAPHIA), pets are legally considered to be the property of their owners, rather than fuzzy little individuals, so pet insurance falls into the Property and Casualty insurance category. Much like home and auto insurance, it functions as indemnity insurance.
No matter how it’s categorized, pet insurance protects you from having to go into debt or having to euthanize a pet due to costly medical needs.
How Does It Work?
Human health insurance often causes lots of frustration and confusion amongst the two-legged crowd due to the fact that certain companies will only work with specific medical providers, offering less or no coverage for doctors who aren’t in their network. Thankfully, pet insurance can be used at any licensed veterinarian in the U.S.
Also unlike human health insurance, pet insurance doesn’t require co-payments. Rather, you pay the vet bill upfront, submit an itemized receipt or claim to your pet insurance company, and are reimbursed for the treatment costs, aligned to your insurance plan coverage.
As you research the most affordable pet insurance, you’ll notice certain terms making frequent appearances. Here are a few of those terms and what they mean:
Just as with human health insurance or car insurance, a deductible is the portion of a bill for which you are responsible before your insurance begins to pay. Check with the pet insurance company you’re considering to see if they have an annual deductible or a per-incident deductible. The latter means that after an event has been covered once, it won’t be covered if it occurs again.
This is incredibly important when looking into the best pet insurance, as limits indicate how much you will be reimbursed for pet medical expenses. An annual limit means that there is a yearly limit on how much you will be reimbursed for all claims on your policy, while a per-incident limit applies to a single incident. Low limits mean that you could still be responsible for a significant amount of your pet’s medical bills.
Similar to limits, a low reimbursement amount means that you will pay more for each pet medical bill. Reimbursement is the amount that your pet insurance company will pay you back after you submit your claim form. Most pet insurance policies in the U.S. reimburse anywhere from 60% to 100% of a vet bill.
The premium is the amount you’ll be required to pay each month to keep your pet insurance policy active. The most affordable pet insurance will have low premiums, but this usually also results in lower reimbursement rates.
With these terms in mind, you’ll be able to research various pet insurance policies and determine if it’s best for you to pay more upfront with a greater percentage covered when your pet has a medical visit or save on your monthly premiums and be responsible for a larger amount of your veterinary bills.
What Does Pet Insurance Cover?
“Why pet insurance?” For many folks, the decision to either get or forgo pet insurance depends on what a policy covers. What your policy will cover depends on what type of policy you have – and those policies range in costs.
This kind of plan only covers preventative care and treatments such as, annual vaccines, wellness exams, flea and tick treatments, and other routine pet care.
This type of plan covers accidents only (your pet being hit by a car, ingesting a foreign object, being poisoned, etc.).
Accident and Illness
The most common type of pet insurance plan, this covers accidents as well as illnesses (digestive problems, infections, allergies, and cancer).
Accident-Illness with Embedded Wellness
This plan covers accidents and illnesses – and it also covers preventative and wellness treatments. Specifics vary, but those items may include vaccinations, dental care, flea and tick medications, and heartworm prevention.
Keep in mind that some plans have exclusions that pertain to conditions common in certain breeds, age limits, and pre-existing conditions.
How Much Does It Cost?
With so many different providers and levels of pet insurance available, the coverage and costs can vary widely. However, your pet’s age, species and breed, as well as where you live and the type of coverage you choose, all factor into your insurance rates. Additionally, older animals and larger animals also face higher pet insurance rates, as these groups tend to have the most health issues.
Here’s a breakdown of potential pet insurance costs reported by NAPHIA in 2019:
Do I Need Pet Insurance?
Whether or not a person needs pet insurance depends on their financial situation. According to The Simple Dollar, even expected pet medical care can range into multiple thousands of dollars over the lifetime of a cat or dog. While that cost may be high, it’s also spread out over time – something that many people can plan for.
Pet emergencies are different and can happen at any time. Should your pet swallow something dangerous or be hit by a car, an incident that happens in a matter of seconds can rack up a single vet bill well into the hundreds or thousands.
For many people, this sort of unexpected drain on their bank account can create serious financial concerns. Pet insurance can help lessen the financial impact with the reassurance of getting reimbursed for a large percentage of these costs.
As you research various plans, consider your own financial needs and think about how you’ll likely use your pet insurance. With a variety of plans available, a bit of homework and careful thought will help reveal the best pet insurance for your furry family members.