How Does Pet Insurance Work?

If you've ever owned a pet, you know they're expensive. Pet insurance helps mitigate those expenses by providing reimbursement for emergencies and more. How does pet insurance work? Find out!

If you’ve ever owned a pet, you know they’re expensive but worth it (just look at these pics of cute pups!). According to the PDSA, the UK’s leading vet charity, the average cost of owning a dog is somewhere between $27,000 and $42,000, depending on the breed. This includes everything from adoption costs to food to a lifetime of vet fees. While cats are slightly less expensive, they range from $21,000 to $31,000. These figures are just averages and don’t take into account emergency surgeries or other unforeseen medical costs. Just as you should invest in health insurance for you and your family, you should for your pet as well. So, how does top pet insurance work? First, we’ll tell you what it is.

What Is Pet Insurance?

How does pet insurance work: average costs of owning a pet

Pets are expensive, but health insurance can help mitigate some of the costs.

How does pet insurance work? Similar to personal insurance, pet insurance is a health care policy for pets that reimburses owners for certain medical expenses and veterinary visits. It is not all-inclusive, and some illnesses and diseases are excluded, so make sure you research various policies before committing to one.

How Does Pet Insurance Work?: The Details

How does pet insurance work: it covers accidents and illness

The best way to think of pet insurance is to liken it to catastrophic insurance: it doesn’t cover everything (including routine check-ups), but it’s there when you need it most, such as in times of emergency. When you sign up for pet insurance, you’ll be required to take your pet for a check-up to establish any preexisting conditions, as these will not be covered.

Most pet insurance plans require a monthly payment and cost a few hundred dollars a year. This means that most unforeseen or emergency medical costs are partially reimbursable. We say partially, because just like health insurance for humans, pet insurance requires a small co-pay, with insurance covering the rest. However, unlike human health insurance, pet insurance requires you to pay out of pocket and in full up front, and then file a claim for reimbursement. Reimbursement can be done via direct deposit or a check in the mail and usually takes 2-3 business days (longer for complicated claims).

Reimbursements are typically structured in three ways:

  • Deductible: While pet insurance will cover part of the bill, you will still have to cover a portion. This portion is called the deductible and can range from $0 to $1,000 depending on your pet insurance plan.
  • Reimbursement level: This is the percentage of payment that pet insurance will cover after your deductible. Typically this is between 50%-100%, depending on your pet insurance plan.
  • Annual max: Unfortunately, there is a cap on pet insurance, which is called the annual max. This is the maximum amount pet insurance will pay each year in medical bills. Once you hit your annual max, you’ll need to pay out of pocket for any additional veterinary fees.

How Does Pet Insurance Work?: Exclusions

What does pet insurance not cover: routine visits

While pet insurance does cover a lot, it also has restrictions and will not cover 100% of your pet’s needs. While standard pet insurance covers most accidents and illnesses, there are a few exclusions. Exclusion vary by policy, but common ones include:

  • Routine check-ups
  • Preexisting conditions
  • Hereditary conditions
  • Dental disease
  • Behavior issues
  • Hip dysplasia
  • Grooming

There are caveats to the above. Some insurers will cover curable preexisting conditions but will not provide reimbursement to treat the incurable ones.

How Does Pet Insurance Work?: Costs

How much does pet insurance cost: average monthly cost of pet insurance

The average monthly cost for pet insurance plans ranges from $25 to $70 for dogs and $10 to $40 for cats. Similar to traditional health plans, pet insurance costs vary based on a variety of factors, including health history, age and more. The cost also varies based on coverage needs: You can choose a low deductible and high reimbursement plan to keep costs low per incident (but higher each month), or the reverse. Most plans also give the option to purchase “endorsements,” or add-ons to enhance your core coverage. Examples of endorsements include exam fees, routine check-ups and prescription food.

Aside from coverage level, factors that play in the monthly cost of pet insurance include:

  • Species: Dogs are more expensive to insure than cats. Male dogs actually have the highest premiums, and female cats have the lowest.
  • Breed: Large pets typically have more health issues than smaller ones and thus are more expensive to insure.
  • Age: The older a pet, the more expensive to insure, as they typically have more health issues than younger pets.
  • Location: Premiums vary according to where you and your pet live. More densely populated areas are the most expensive.

Pet insurance isn’t a requirement, and not everyone has it. Whether or not pet insurance is worth getting is ultimately your decision.

Do you have pet insurance for your pet? Tell us what kind!