How Does Pet Insurance Work And How Do You Use It For Your Pet?

If you are a pet owner, you are probably aware of the high cost of health care for your beloved companion. Pet insurance is one way to keep the costs of your pet’s vet bills low. It comes in several varieties, and may cover accidents, illness and wellness health costs. In this guide, Bankrate’s insurance experts explain how pet insurance works and review what you need to know to choose the right coverage for your furry friend at a reasonable cost.

How pet insurance policies work

The intricate details and fine print of pet insurance policies contain crucial information. However, they can easily overwhelm anyone unfamiliar with insurance jargon. Understanding how pet insurance works comes down to three key concepts: plan types, deductibles and claims.

Types of pet insurance plans

Here are the three main types of pet insurance plans available:

• Accident-only: Typically covers unexpected injuries.
• Accident and illness: Covers unexpected injuries and a broader range of medical issues
• Wellness and preventative care: Includes things like routine checkups and vaccinations

Insurance companies offer different types of plans and coverage details. Some companies offer one comprehensive plan, while others provide customizable plans with add-ons for tailored coverage. Below, we’ll explore more details of what’s covered under each type of plan.

Deductibles and reimbursement rates

A deductible is a fixed amount of money you are responsible for paying for a covered vet bill out of pocket before your insurance company will reimburse you.

Think of the deductible as a down payment on your pet’s care. The higher your deductible, the lower your premiums will be. Some companies offer a “lifetime per condition” deductible, but others have customizable deductibles ranging from around $0 to $2,500. The deductible options vary from one insurer to the next, so look for a deductible and premium combination that works for your budget and needs.

A reimbursement rate (or payout percentage) is the percentage of a covered veterinary bill the insurance company will pay back after you’ve paid your deductible. The higher the reimbursement percentage, the higher your premiums will be.

Who pays the vet?

If your insurer offers vet direct pay and your vet accepts this option, the insurance company pays the vet directly. However, in most cases, you must pay the bill directly and file a claim to receive your reimbursement.

Claims

As noted, most pet insurance companies work on a reimbursement basis. This means you pay your vet bill upfront and then submit a claim to your insurer for a refund.

How do pet insurance claims work? The process varies between insurers. Some claims are easy to submit via an app or online portal; others may have to be sent via email, mail, fax or phone. In most cases, you must submit an invoice or receipts and answer some questions to file your claim.

Next, you wait for the claim to be processed and for the insurance company to reimburse you. Some pet insurance companies process claims in minutes (if not instantly), whereas others may take over a month. Insurance companies generally reimburse the final amount via direct deposit or a check in the mail.

What pet insurance covers

The following list of categories demonstrates what pet insurance generally covers. However, not all insurance companies cover all these situations, and some cover items not listed here.

• Accidents
  

  • Ingestion or inhalation of foreign objects
  • Injuries from falls, car accidents or fights with other animals

• Alternative therapies
  

  • Acupuncture
  • Chiropractic care

• Behavioral therapy
  

  • Training sessions to mitigate separation anxiety
  • Training sessions to remedy behavioral problems

• Diagnostic testing
  

  • Bloodwork, urinalysis
  • MRIs, ultrasounds, X-rays

• Hereditary and congenital conditions
  

  • Arthritis
  • Cherry eye
  • Diabetes
  • Elbow and hip dysplasia
  • Intervertebral disc disease (IVDD)

• Hospitalization
  

  • Hospital stays (for treatment of covered conditions)

• Illnesses
  

  • Allergies
  • Cancer treatments
  • Chronic diseases
  • Infections

• Surgeries
  

  • Emergency surgeries due to accidents or illnesses
  • Spaying or neutering

• Wellness and preventative care packages
  

  • Parasite prevention medications or treatments
  • Regular checkups
  • Spaying or neutering
  • Vaccinations

• Additional coverage options
  

  • Breeding costs
  • Hydrotherapy
  • Nail care and grooming
  • Newborn puppies or kittens
  • Physiotherapy
  • Specialized pet food
  • Supplements
  • Vet exams
  • Weight loss programs

What pet insurance does not cover

As before, the following list is not definitive. For example, most insurers don’t offer coverage for exotic pets or newborn puppies, but that doesn’t mean you won’t find a company with a plan that will. Pre-existing conditions can also be a gray area in pet insurance.

• Breeding-related costs
  

  • Expenses associated with breeding your pet, for example, whelping or C-sections

• Elective procedures
  

  • Cosmetic surgeries such as tail docking or ear cropping
  • Dental cleaning or descaling
  • Routine grooming and nail care

• Pre-existing conditions
  

  • Any illnesses or injuries your pet had symptoms of or received treatment for before the policy began.
  • Some plans may offer limited coverage for pre-existing conditions after a waiting period. These conditions are often referred to as “curable pre-existing conditions.”

• Preventive care (unless as an add-on)
  

  • Parasite prevention medication or treatments
  • Routine checkups
  • Vaccinations

Pet insurance waiting periods

Waiting periods are another key element of most pet insurance policies. A waiting period is the time between your policy’s start date and when your coverage begins.

Unless specified otherwise, your coverage doesn’t start until a set time has passed. For example, if Fido breaks his leg two days after your pet insurance is active and you have a 14-day waiting period, treating the broken leg won’t be covered.

Some insurance companies may pay out for the claim but not cover any costs related to the injury in the future. This is particularly true for conditions such as cruciate ligament injuries.

Pet insurance costs

Pet insurance premiums vary significantly depending on policy details. Here are some of the factors that impact how your policy costs are calculated:

• Age: Younger pets typically have lower premiums than older pets.
• Breed: Certain breeds with higher health risks may have higher premiums.
• Coverage type: More comprehensive plans with higher coverage limits will cost more.
• Deductible: Choosing a higher deductible can lower your monthly premium.
• Location: Veterinary costs can vary by region, which can affect premiums.
• Species: Generally, dog insurance is more expensive than cat insurance.

How to decide if pet insurance is worth it

Many factors determine the value of insuring your pet. That said, 92 percent of pet owners with pet insurance say it’s worth it for them.

Many factors determine the value of pet insurance, and only you can decide if pet insurance is worth it for you. Consider the following to help you answer that question:

• Peace of mind: Knowing you’re prepared for unexpected vet bills can be a valuable benefit.
• Your budget: Consider whether you can comfortably afford the monthly premiums and potential out-of-pocket costs like deductibles.
• Your pet’s health: If your pet is prone to health problems, insurance can provide peace of mind and financial protection.

Of course, it’s also critical to understand the full scope of coverage to avoid any disappointment or unpleasant surprises.

To help you decide if pet insurance is worth it for you, we reviewed comments on the forum website Reddit.com to see what actual pet owners had to say about the value of their coverage. Here are just a few of the insights we saw:

*The quotes and citations included on this page have been verified by our editorial team and are accurate as of the posting date. Outlinked content may contain views and opinions that do not reflect the views and opinions of Bankrate.

Next steps

Pet insurance can be a valuable resource for managing your pet’s healthcare costs. If you have decided that pet insurance is worth considering, your next step might be to ask for quotes from a range of pet insurance companies. Don’t hesitate to ask questions before choosing your policy, and research and compare the options that each company offers. It may take a little more work to find the right company for your pet’s needs, but it will be worth it in the long run to know that your pet’s health doesn’t need to be sacrificed because you cannot afford the care they need.

Frequently asked questions

• Can I visit any vet with my pet insurance policy?
  

  Although your own healthcare options may be limited to certain doctors and facilities, most pet healthcare insurance allows you to use any licensed veterinarian of your choice. This generally also includes specialist care and in-hospital care for your companion animal. Since every policy is different, however, you may want to ask about this or any other potential restrictions when you purchase your policy. Be especially mindful of your options if you anticipate taking your pet with you on any international travel.

• Can you use pet insurance right away?
  

  In most cases, you cannot use pet insurance immediately after purchasing a policy. Pet insurance policies typically have waiting periods that must pass before coverage begins. These waiting periods vary depending on the insurer and the type of coverage. For example:

  • Accident coverage might have a short waiting period, usually around 24 to 48 hours.
  • Illness coverage typically has a longer waiting period, ranging from 14 to 30 days.
  • Coverage for specific conditions, like orthopedic issues or cruciate ligament injuries, may have extended waiting periods of several months.

• Does pet insurance cover end-of-life care?
  

  Several pet insurance policies do offer coverage for end-of-life care. The extent of coverage varies depending on the insurer and policy. End-of-life care may include:

  • Euthanasia: Most policies reimburse for humane euthanasia relating to covered accidents or illnesses.
  • Cremation or burial: Some insurers offer partial reimbursement for cremation or burial costs, although this is less common.
  • Palliative or hospice care: Policies that cover chronic or terminal illnesses may also cover palliative care, which focuses on pain management and comfort during the pet’s final stages of life.

• Which pet insurance companies pay the vet directly?
  

  Pet insurance companies such as Trupanion, Pets Best and Healthy Paws do offer vet direct pay. However, most pet insurers use a reimbursement model. Check with your provider to understand their process. Some insurers may require you to contact them in advance, while others may have the vet submit the claim directly.

• When is the best time to get pet insurance?
  

  The best time to invest in pet insurance is when your pet is young and healthy. The earlier you insure your pet, the better the coverage and cost:

  • Premiums are typically more affordable when your pet is young, as insurers consider younger pets to have a lower risk of developing illnesses or requiring expensive treatments.
  • Younger pets are also less likely to have pre-existing conditions. By insuring your pet early, you can secure coverage before any health issues arise, ensuring more comprehensive protection.
  • Even young pets can experience accidents or unforeseen health issues. Insuring early provides peace of mind and financial support when unexpected veterinary expenses occur.