Understanding Pet Insurance: A Comprehensive Guide
Pet insurance was once a niche product, but with the rising costs of pet ownership and veterinary care, it has become a booming industry. Pet parents now have more options than ever to manage costs and soften the blow of emergencies. In this blog, we will explore the types of pets typically covered by pet insurance, those that are often excluded, and how you can save money on pet insurance.
What Kind of Pets Does Pet Insurance Typically Cover?
Traditional pet insurance primarily covers the two most common pets: cats and dogs. The purpose of pet insurance is to reduce the financial burden of unexpected accidents or illnesses, which can cost thousands of dollars without coverage. Some plans also include optional add-ons to help pay for routine and preventative care.
Just like human life insurance, factors such as age, gender, lifestyle, and health can impact your pet’s eligibility and the cost of insurance. Pet insurance costs can vary based on the pet’s location, age, gender, breed, and pre-existing health issues, along with the level of coverage desired.
Pet insurance plans can start as low as $10 to $20 per month for basic accident coverage. For more comprehensive plans that cover both accidents and illnesses, a 2023 report from the North American Pet Health Insurance Association of America (NAPHIA) found the average premiums were:
- For dogs: $640.04 per year or $53.34 per month
- For cats: $387.01 per year or $32.25 per month
How Pet Insurance Works
Here’s a brief overview of how pet insurance works:
- Obtain a quote for insurance by submitting details about your pet and their health.
- Review the insurer’s plan choices and terms. If you select one and get approved, you’ll submit payment and may need to provide paperwork from a recent vet exam.
- Hold tight if your policy has a waiting period during which you can’t file claims. This is to protect the insurer and usually lasts only a few days or weeks.
- After the waiting period, if care is needed, visit the vet of your choice and pay in full. Submit a claim with documentation to your pet insurer, who will issue reimbursement.
Many health insurance plans reimburse 80% or 90% of the cost, which can significantly reduce major bills and alleviate stress on your pet budget. For example, vet care for vomiting or diarrhea can cost $1,550; ingesting a foreign object can cost $3,250; and a leg fracture can cost $5,400, according to Healthy Paws Pet Insurance. Another insurer, Pets Best, notes that unexpected pet health bills increase as animals age, with cancer treatment costing upwards of $7,600.
Some vets offer their own wellness plans, which work like memberships with monthly fees to space out the costs of routine care like vaccinations (sometimes at a discount). Unlike insurance, these plans typically do not cover diseases or injuries, though they may offer discounts on those services.
Some pet insurers also offer their own add-on wellness coverage to complement their policies. Before adding a wellness plan through your vet or pet insurer, closely review the terms to ensure there’s enough coverage to justify the extra costs.
Which Pets Are Likely Excluded From Pet Insurance Coverage?
Pet insurance is usually only available for cats and dogs. Most insurers exclude “exotic” pets, which include birds, reptiles, amphibians, and small mammals like rabbits or guinea pigs.
Nationwide is unique in that, in addition to offering traditional cat and dog insurance, it has a plan for exotic pets starting at $21 per month. However, this coverage has limitations—they won’t insure species that are venomous, poisonous, endangered, kept on display, are illegal, or require a permit or license to own.
PetAssure is one of the few other companies to offer exotic animal coverage, but they only provide “pet plans” to make routine care affordable. Since it’s not insurance, it doesn’t help with emergencies or unexpected health issues.
There are also limitations for cat and dog insurance. Depending on your insurer and policy, you might not qualify for coverage or claims for:
- Chronic or pre-existing conditions, meaning injuries or illnesses from before purchasing insurance
- Breed-specific conditions like hip dysplasia (some plans cover this and some don’t, while others cover it with add-on options)
- Spaying/neutering
- Behavioral health
- Elective surgeries
- Parasite prevention medication
- Injuries from abuse or neglect, or by making dogs race or fight
Also, make sure your prospective pet insurance plan doesn’t restrict certain breeds. Most accept any dog or cat, though premiums are often higher for purebreds since mixed-breed pets are less prone to breed-specific health conditions. Premiums are also typically higher for larger animals, older animals, and male pets.
Remember that even if your pet is elderly or suffers from a pre-existing condition, it doesn’t mean you’ll be denied coverage. Some plans have no upper age limits or won’t outright deny a pet with a health condition. You just might be limited on what health issues you can file claims for reimbursement. Read the fine print carefully.
How to Save Money on Pet Insurance
Pet insurance can reduce the costs of pet ownership, but good plans aren’t cheap. Here are some ways to save on pet insurance:
Shop Around
There’s an ever-increasing number of pet insurance options, and coverage, benefits, restrictions, and prices vary greatly. It really pays to gather free online quotes from numerous insurers to compare. Consider using an aggregator like Petted.com that provides quotes from multiple insurers.
Pay Attention to Coverage
Pet insurance isn’t as standardized as human insurance, so what’s covered can vary drastically. For example, a plan might cover emergency vet visits, but not blood work, X-rays, or medication. Review terms closely to avoid costly surprises.
Look at Caps and Limits
Similarly, analyze maximum payouts for insurance and wellness plans (if applicable) since these vary by plan. Is there a per-incident cap on individual claims? Or an annual or lifetime maximum?
Hunt for Discounts
Most pet insurance companies offer multi-pet discounts for enrolling more than one animal. Some larger insurance companies offer bundle discounts if you use them for another insurance product and add a pet policy. It’s common to see discounts for paying premiums annually rather than monthly. Certain insurers provide discounts for first responders, military, healthcare workers, and those in animal care.
Enroll Early
If you get coverage for your pet as soon as possible, you leave less time for pre-existing conditions to develop that might not be covered. Plus, younger pets cost less to insure. Some pet insurance plans have upper age limits; many don’t, but expect coverage costs to increase annually as your pet ages.
Consider Insurance When Adopting
If you don’t yet have a pet, know what factors increase the costs of insurance. For example, mixed-breed dogs cost less to insure than purebred, as do younger, smaller, and female dogs, which may mean you make a different choice when adopting a pet.
Adjust Policies
When viewing prospective insurance plans, some insurers allow you to customize a policy’s deductible and reimbursement rate to lower your premium (and vice versa). Lower ongoing premiums mean less coverage, so weigh your short-term financial needs with long-term potential costs.
The Bottom Line
Medical expenses for pets can be astronomical. Unless you have a hefty emergency fund, pet insurance can save you and your pet’s tail and help you avoid taking on debt (and potentially wrecking your credit) in the face of a steep unexpected vet bill. Pet insurance isn’t cheap, though, so it’s important to shop around, select a plan that works for your budget, and provides robust enough coverage to meet your needs and justify the expense.
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