Most of us view our pets as beloved companions and family members, and that doesn't change just because a pet gets sick or injured. You want your pet to have the best medical care, but vet bills can easily reach into the tens of thousands of dollars. Most people don't have that kind of cash lying around. This can lead to an agonizing dilemma: Forgo treatment or incur significant debt? Pet insurance is designed to help people avoid that choice. Like insurance for humans, pet insurance requires the payment of a premium, and the insurance company promises to help pay for treatment. Because pet insurance policies differ, pet owners should carefully research their options before choosing a plan or opting to go without coverage. This guide is designed to help pet owners with those important decisions.
Pet Insurance: Who Benefits and Why
What does pet insurance really offer? It depends on the situation. Here are a few scenarios that offer a comprehensive view of what pet insurance can — and cannot — do for a beloved pet.
Cocker Spaniel, 3 years old
- What happened? This dog had been suffering from a badly inflamed eye for a while. A vet diagnosed her with "cherry eye," or prolapsed nictitans gland. Her owner knew this could be a problem with the breed, so she decided to purchase pet insurance when she adopted this pet.
- Treatment required: Veterinary checkup and minor surgery
- Total cost of treatment: $370
- Yearly insurance premium: $636
- Cost out of pocket: $370. The eye was a pre-existing condition, which was not covered by the insurance plan.
Mixed breed cat, 1 year old
- What happened? This feline chewed on a power cord and swallowed a few pieces of it. This was the second time he had done this in the past 10 months.
- Treatment required: Emergency room visit, surgery to remove the pieces of power cord, X-rays to locate the power cord, X-ray dyes, overnight hospital stay and pain medication.
- Total cost of treatment: $1,280
- Yearly insurance premium: $456
- Cost out of pocket: $1,280. No coverage for a second "foreign object ingestion" that occurred within an 18-month period.
Labrador Retriever, 2 years old
- What happened? This dog was chasing a tennis ball when it rolled into the street. While going after the ball, he was hit by a car and suffered two broken legs.
- Treatment required: Emergency room visit, multiple X-rays, abdominal ultrasound, two surgeries, hospital stay, pain medication and follow up visits.
- Total cost of treatment: $3,600
- Yearly insurance premium: $624
- Cost out of pocket (after $300 deductible and 80% coverage): $1,020
Siamese Cat, 5 years old
- What happened? This cat suddenly stopped eating and was in constant pain. It turned out he had an infection in his intestines.
- Treatment required: Emergency room visit, X-rays, ultrasound and a hospital stay while receiving antibiotics and fluids through an IV.
- Total cost of treatment: $1,900
- Yearly insurance premium: $576
- Cost out of pocket (after $250 deductible and 90% coverage): $440
Mixed breed dog, 7 years old
- What happened? This dog had blood in her urine and frequent urination. A visit to the veterinarian revealed she had bladder cancer.
- Treatment required: Initial diagnosis, surgery to remove tumor, follow up radiation and chemotherapy, various medications and several nights in the animal hospital
- Total cost of treatment: $5,700
- Yearly insurance premium: $324
- Cost out of pocket (after $500 deductible and 70% coverage): $2,210
Tabby cat, 10 years old
- What happened? This cat stopped eating and drinking and became lethargic. She also started throwing up what little she did eat. She urinated more, and her fur lost its usual shine. She was diagnosed with severe kidney failure.
- Treatment required: Extensive testing to confirm transplant suitability, transplantation surgery and initial round of anti-rejection medication
- Total cost of treatment: $12,500
- Yearly insurance premium: $1,152
- Cost out of pocket (after $200 deductible and 90% coverage): $1,450
Sources: Banfield.com, CBSNews.com, Embracepetinsurance.com, Nationwide.com, Trupanion.com
Comparing Popular Pet Insurance & Wellness Plans:
Trupanion, Embrace, Nationwide Pet Insurance & Banfield's Optimum Wellness Plan
Over the years the number of pet insurance companies has grown. This is good for the consumer — more competition means better choices. Among the companies with some of the best ratings from consumer advocates are Healthy Paws Pet Insurance, Petplan, Trupanion, Nationwide Pet Insurance, Embrace, Pets Best and PetFirst. Four pet insurance companies and/or wellness plans are detailed here.
Provider & Policy | Banfield Pet Hospital's Optimum Wellness Plan | Embrace Pet Insurance | Trupanion Pet Insurance | Nationwide Pet Insurance |
|---|---|---|---|---|
Has financial limits | Not applicable | Yes, depends on the type of plan | No | Yes, depends on the type of plan |
Deductible choice | Not applicable | Yes, between $200 and $2,000 | Yes, between $0 and $1,000 | Yes |
Waiting period | None | Between 48 hours and 14 days | Five or 30 days | 14 days |
Enrollment age | Not applicable | Pet must be between six weeks and 10 years to enroll | Pet must be between six weeks and 10 years to enroll | Pet must be between six weeks and 10 years to enroll |
Direct pay to vet | Not applicable | Yes, if requested ahead of time and vet agrees | Yes | No |
Covers tests, medications, surgery & hospital stay | No | Yes | Yes | Yes |
Only covers emergencies | None | No | No | No |
Covers routine treatment, wellness | Yes | Yes, but depends on the type of plan | No | Yes, but depends on the type of plan |
Covers hereditary and congenital conditions | No | Yes | Yes | Yes |
Offers coverage for pet replacement, cremation or burial | Not applicable | Yes, but depends on the type of plan | Yes, but depends on the type of plan | Yes, but depends on the type of plan |
Must use a specific care provider | Yes, Banfield Pet Hospitals only | No | No | No |
Coverage for cancer? | Not applicable | Yes | Yes | Yes |
Multi-pet discount | Yes | Yes | No | Yes |
How to Shop for Pet Insurance
Shopping around for pet insurance can be daunting. There are so many terms, provisions, exceptions and "fine print" that it can be tough to compare policies.
Most pet insurance policies can be purchased directly from the pet insurance company. However, using a broker or agent can be helpful in getting a lot of questions answered and concepts explained in layman's terms. No matter how you intend to purchase pet insurance, it's helpful to understand some of the commonly used terminology and concepts. Here's a quick primer.
Add-ons
Sometimes referred to as riders, add-ons can provide additional coverage for an increase in premiums. For example, many policies exclude coverage for treating cancer; however, riders can be purchased to provide cancer treatment coverage for a higher monthly premium.Clearly Written Requirements
Pet insurance companies put certain requirements in place for coverage. For example, when filing a claim, the company will need clear documentation for the services provided. The pet policy should clearly state what these requirements are, although you may need to contact the insurance company to confirm them.Co-pay
The co-pay is the set amount a policyholder pays for a particular procedure, even if the insurance covers it. Co-pays are usually calculated as a percentage of the medical cost. Most policies have co-pays that range between 10 percent and 30 percent.Customer Service
Pet insurance policies usually require the owner to pay the veterinary bill first, then file a claim to get reimbursed by the pet insurance company. As with any other type of insurance policy, filing claims can be tedious and difficult; therefore, the better the customer service, the easier the claims process will go.Customization
In order to get only the coverage that is really needed, pet owners can customize their policy. By adjusting the co-pays, deductibles, premiums and riders, a policyholder can modify a policy to pay for only the coverage they want or need.Deductible Choices
The deductible is the amount the policyholder will have to pay before insurance kicks in. In a very simplified example, if the deductible is $200 and the total bill is $500, the policyholder will pay $200 while the insurance company pays $300. Premium costs will be partially based on how high or low the deductible is. Typically, lower premiums will come with higher deductiblesExclusions
Pet insurance policies will not cover certain services. Commonly excluded from coverage are pre-existing, hereditary and congenital conditions. Some pet insurance also makes breed-specific exclusions, such as refusing to cover Dalmatians or Pit Bull Terriers.Payout Limits
There are generally three types of payout limits, or caps. The lifetime payout limit means the insurance policy will only cover up to a certain amount of money during the pet's lifetime. The period limit commits the insurance company to pay out for only a certain period of time, usually one year. The per-incident limit sets the ceiling of what the policy will pay for each covered incident.Policy Coverage
This refers to what the pet insurance policy will pay for. Generally speaking, most policies will help pay for some or most of a significant and unexpected veterinary bill. But the precise amount of coverage and what is excluded from coverage will depend on the specific policy.Premium Considerations
Pet insurance policies are priced with respect to the monthly premium amount. Like most other insurance policies, higher premiums usually translate to more coverage and lower deductibles. The older the pet is, the higher the premium will be. The addition of riders for specific illnesses or injuries will raise the premium. The breed of the pet will also affect the cost. Mixed breeds often have lower premiums, while purebreds tend to have higher premiums.Timeliness of Claim Payment
Since most pet insurance policies require the policyholder to pay first and get reimbursed later, the speed with which a claim is processed and a reimbursement check sent can be very important. Most pet insurance companies send out reimbursement one to two weeks after the claim is complete. Some companies require extensive documentation for every claim, which can delay the process.Waiting Period
There is often a period of time after the purchase of the policy before the benefits kick in. This waiting period exists to prevent insurance fraud. The waiting period depends on the policy, the state, and the reason for the veterinary bill. For instance, the waiting period for illness might be different from the waiting period for accidents.
Why Consider Pet Insurance?
Why would someone opt for pet insurance? Veterinary treatment for serious illnesses and injuries can be more expensive than you might think. Here are some of the potential costs.
The costs of preventative and wellness visits vary depending on the type and breed of the animal. The geographic location of the veterinary clinic matters too; for instance, things might be more expensive in California than they are in Kentucky. Here is a general price range that you can expect for a health maintenance visit:
- Office call with physical examination — $40-$60
- Vaccines — $15-$25 for boosters and $40-$90 for initial vaccines
- Fecal exam — $25-$45
- Blood test for heartworm disease — $40-$55
- Dental cleaning — $60-$800 (higher cost if pet is anesthetized, blood work done, antibiotics given and teeth pulled)
- Spay or neutering — $50-$200, depending on the type of animal, its sex and its condition at the time of the procedure
The real benefit of pet insurance is to help pay for the unexpected medical costs of taking care of a pet. A general idea of how much unexpected medical care can cost includes:
- Emergency visit to a veterinary clinic or hospital — $100-$400
- X-ray — $100-$300
- Anesthesia — $200-$400 per hour
- One full day of hospitalization — $300-$1,000 (this can include boarding, constant observation and the administering of IV fluids and medications)
- Abdominal ultrasound — $200-$500
Pets might face emergency surgery after an accident, sudden illness or long-term issue finally making itself known. Here are some of the most common surgical procedures that might be covered by insurance.
- Foreign object removal surgery — $1,000-$3,000
- Skin mass removal — $400-$600
- Tooth extraction — $450-$550
- ACL repair — $1,000-$3,500
- Cataract surgery — $1,200-$2,800
- Hip dysplasia — $1,000-$2,500
- Gastroplexy — $400-$1,500
- Leg amputation — $400-$700
- Colectomy — $700-$900
Sources: Banfield.com, Countrysideah.com, Helpinghandsvetva.com, Kiplinger.com, Kmdvm.blogspot.com, Lifestylepets.org, Petcarerx.com, Petfinder.com, Petinsurance.com, Sheknows.com, Vetinfo.com
Understanding What Your Pet Insurance Covers
What a pet insurance policy covers depends on the insurance company and specific provisions in the policy. Typical events or conditions that pet insurance policies often cover are listed below. Remember that if the initial policy doesn't cover some of these things, you can purchase riders that will cover them.
Description of Coverage/Condition | Covered by Pet Insurance? | Explanation |
|---|---|---|
UNEXPECTED ACUTE ILLNESS | ||
Sudden physical illness requiring medical attention. | Yes | Most pet insurance policies will cover unexpected and acute illness, as long as it's not deemed to be pre-existing. |
UNEXPECTED INJURY | ||
Physical injury caused by an event not related to an underlying disease. | Yes | Unless otherwise excluded, most pet insurance policies will cover physical injuries to the pet, as long as the injury was not deliberately caused by the policyholder or member of the policyholder's household. |
EMERGENCY CARE | ||
A physical injury or disease that requires immediate medical attention. | Yes | This is typically covered by a pet insurance policy, although certain policies may not cover additional expenses relating to the medical care, such as medical boarding, transporting the pet or administrative charges. |
CONGENITAL AND HEREDITARY DISEASE | ||
Congenital diseases are present and discoverable at birth. Many congenital diseases are caused by inbreeding. Hereditary diseases are diseases that may or may not be discoverable at birth and are often not observed until much later in the pet's life. | Depends on the policy | Pet insurance policies vary widely when it comes to coverage of congenital and hereditary diseases. Some policies will not cover medical costs associated with a congenital or hereditary disease, while others will cover the condition by default. There is another group of pet insurance policies that will only cover congenital or hereditary disease if additional coverage is purchased. |
BREED SPECIFIC CONDITIONS | ||
Certain breeds are more likely to suffer from medical conditions or health problems. These may be identified in pet insurance policies as breed-specific conditions. | Depends on the policy | Some pet insurance policies will refuse to cover costs to treat certain conditions when suffered by an animal of a specific breed. |
CHRONIC CONDITIONS | ||
Chronic conditions are conditions that once first observed, are considered incurable or likely to exist for the rest of a pet's life. | Yes, as long as it's not deemed to be a pre-existing condition. | How a policy defines pre-existing condition can be very important in deciding whether a chronic condition is covered or not. |
PRE-EXISTING CONDITIONS | ||
Medical conditions that are deemed to exist before the pet insurance coverage began. | No | No pet insurance policy will pay for medical expenses relating to pre-existing conditions. However, pet insurance companies will differ in how they define what constitutes a pre-existing condition. |
HEALTH MAINTENANCE/WELLNESS | ||
Preventative care that includes regularly scheduled medical care, vaccinations and veterinary visits to maintain the health of the pet and detect any problems as soon as possible. | Depends on the policy | Many pet insurance policies will not cover health maintenance or wellness care. Some policies will allow policyholders to pay for this coverage at an added cost, but others will not allow for this coverage at all. |
LIFE INSURANCE OR THEFT INSURANCE OF HIGHLY PRIZED ANIMAL | ||
Some pets may have significant monetary value as property. In these instances, insurance exists to replace the loss of the highly prized pet. | No | Pet owners seeking coverage to replace a highly prized pet can do so only for its objectively appraised value. However, this type of coverage will usually require a completely different insurance policy. |
FINAL EXPENSES OF PET | ||
Costs usually associated with the death of a pet and the final respects provided to a pet by the owner. | Depends on the policy | Final expenses are often not covered by pet insurance policies, although additional coverage is available to pay for expenses such as cremation, urns, burials and memorial stones. |
Sources: Banfield.com, Embracepetinsurance.com, Nationwide.com, Petcarex.com, Trupanion.com
Step by Step: Navigating a Pet Insurance Claim
Ready to get pet insurance? Here's how it works.
Purchase the pet insurance
Once the first premium is paid, your pet is covered. Depending on the policy, there might be a waiting period before the policy actually kicks in. The typical waiting period is a few days for injuries and 14 days for illnesses. For certain animals and types of conditions, the waiting period can be several months.
Waiting period is over and full coverage begins
Your pet is covered to the full extent of the pet insurance policy. You continue to pay your monthly premiums, even though your pet is healthier than you are.
Your pet has a medical issue
You take your pet in for a medical exam. Most insurance policies allow you to take the pet to any veterinarian you want, as long as the vet is licensed. After an initial look-over, the veterinarian orders some tests to identify the problem and prescribe treatment.
Paying the vet bill
You get a summary of the cost of the visit and treatment in your bill. You will likely have to pay this amount upfront, out of pocket. Some pet insurance companies will work directly with veterinarians to pay the bill, but these plans must be set up ahead of time and the veterinarian will have to agree to the arrangement.
Filing a pet insurance claim
The claims process will differ between pet insurance companies, but at a minimum, you and the veterinarian will need to complete a claim form. In addition to the claim form, you will need to provide an itemized invoice or bill from your veterinarian's office. (After you sign the claim form, some vets' offices will take care of the rest of the paperwork for you.)
If you are filing a claim for the first time, you might need to include the pet's medical records going back at least 18 months before enrollment in the insurance plan. These medical records must include all notes, test results and vaccine history of your pet.
Getting reimbursed for the veterinarian bill
Once a claim is filed, it is processed by the insurance company. Assuming the claim is approved, the company will calculate how much you will be reimbursed. What the insurance pays will be less than the actual veterinarian bill. What you pay will be the deductible plus the co-pay - as long as the annual or incident maximum is not exceeded. If a claim is not approved, it's time to file an appeal. Depending on the policy, you will have anywhere from 90 days to six months to file it.
How Pet Insurance Works: A Case Study
A hypothetical pet insurance policy has a 10% co-pay with a $300 annual deductible, an $8,000 annual cap on policy benefits and a policy period from January 1 to December 31.
In January of 2016, the pet owner incurs a pet bill of $490. The insurance company will provide a $171 reimbursement check to the pet owner ($490 - $300 = $190. 90% of $190 is $171).
A few months later, the same owner incurs another veterinarian bill of $630. Because the annual $300 deductible has already been met, the pet insurance company will reimburse the pet owner $567 (90% of $630 is $567).
Towards the end of the year, the pet gets really sick and requires major surgery, medications and several nights at an animal hospital. The total veterinarian bill for this third visit is $8,650. The pet insurance company will only reimburse the pet owner $7,262 instead of $7,785 (90% of $8,650 is $7,785) because the policy has an annual cap of $8,000 ($171 + $567 + $7,262 = $8,000).
Other Ways to Pay the Veterinarian
What if pet insurance doesn't pay nearly enough, but letting go of your beloved pet is an impossible thought? There are some other options to pay for enormous veterinary bills.
Veterinary financial assistance
Many veterinarians understand that the costs to treat pets can often be more than the owner can afford. In order to ease the financial strain, many veterinarians are willing to set up payment plans or even reduce veterinary bills in order to accommodate financially strapped owners.Set money aside in a special account
Sometimes insurance premiums are just too high for an owner to afford. Instead of paying insurance premiums each month, the owner can put that money into a special savings account for unexpected veterinary expenses.Assistance from a nonprofit
Many nonprofit organizations will help owners pay for veterinary medical care. To get financial assistance, owners must formally submit an application.Depending on the nonprofit, only certain types of care will be eligible for financial assistance.Crowdfunding
This allows large amounts of money to be raised from a large group of people making relatively small contributions. There are many websites, including Gofundme, that have popped up to help individuals raise money for personal causes, such as veterinary bills.
Learn more about pet expenses and how to pay them here.
Pets and Insurance: Special Circumstances
Most pet insurance policies are for cats and dogs. However, insurance exists for other types of animals and special situations. Here are some of those.
- Some pet insurance policies cover unusual or exotic animals, such as birds, lizards, goats, rabbits, snakes and turtles. There are many fewer insurance companies insuring these types of animals, so the choice of policies will be smaller.
- Most renter's and homeowner's insurance policies will cover a pet owner if a pet harms someone or damages someone else's property. Some insurance companies will not offer this liability coverage for dogs of certain 'aggressive' breeds, such as pit bulls.
- In most cases, the pet insurance company will ask for the breed of the animal to be insured. This is because certain breeds of animals are at a higher risk for certain conditions or ailments; for instance, Dalmatians are known to have issues with hearing and urinary problems. These high-risk pets result in higher premiums.
- Unfortunately, some pets go missing, and some policies will offer benefits relating to a lost pet. For example, coverage benefits may include placing a pet on the National Theft Register, assisting in advertising for the lost pet and paying a reward to someone who finds the pet.
Expert Advice on Pet Insurance
Joel Ohman is a certified financial planner and founder of InsuranceProviders.com.
What's important to remember about buying pet insurance?
As with shopping for "human" health insurance, it is important to understand the pet insurance product that you are considering: Make sure that it is a true insurance policy and not just a glorified discount plan or discount card. Health discount plans are notorious for marketing in such a way as to make you believe that they are offering a comprehensive health insurance policy and not just a discount on care. Pet insurance products can be no different. It's very important to read the fine print and understand what you are purchasing.
Assume a pet has many health problems and runs up a large bill, which the insurance mostly covers. How likely are they to drop the owner when it comes time to renew the policy?
Most reputable pet insurance policies will offer lifetime coverage for your pet. This means that even if your pet incurs a large covered expense, the insurance carrier will not drop or otherwise exclude your pet from other future covered expenses — provided that those expenses are covered under the policy. When in doubt, just ask! Be sure that you understand the policy terminology before you make a purchasing decision.
Is a wellness plan worth the extra cost?
Routine and preventative vet visits are almost never covered under a base pet insurance policy, although you may find some options that will allow you to add this coverage on for an added fee. Just know that some veterinarians have their own in-house benefit programs designed to reduce the cost of routine vet visits — an example of this is the Banfield Wellness Plan from Banfield Hospital at PetSmart. So be sure to compare options at your vet of choice to see what is best for you.