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Pet Insurance - What To Know


cat insurancePet insurance helps to pay the cost of surprise medical expenses should your pet become ill or have an accident. Some companies offer additional routine and wellness to help offset the costs of vaccines, exams, dental and other upkeep, but it is best used to help mitigate the shock of an unexpected and high bill.

The best known pet insurance companies are VPI, ASPCA, Embrace, Healthy Paws, Pet First, Pet Partners/AKC, Pet Plan, Pets Best, PurinaCare, Trupanion, and 24 Pet Watch. Before choosing any company over another, read the information below so you can make an informed decision on what you want in coverage for your pet. It is important to remember that pet insurance is not a way to save money, but a way to protect yourself against a sudden, unexpected crisis.

Insurance Coverage

As with any preventative insurance such as auto or property, there is always the risk that you will put in more than you will get out simply because your pet stays healthy and doesn’t need it. On the flip side there is the very real chance it will save your pocketbook and your pets life by covering an emergency procedure you may not have been able to afford otherwise.

It is similar to human healthcare in that there are premiums, deductibles and co-pays, as well as maximum pay outs.

Premium- The amount you pay every month or year for the policy

Deductible- The amount you pay out of pocket that you will not be reimbursed for, there are two types of deductibles:

Per- Incident- you must pay this amount out of pocket for every incident, for example: Your cat breaks its leg falling out of a tree, you will pay a certain amount for the initial visit but nothing for rechecks specifically related to the problem
Annual- Must be paid each year regardless of the number of new incidents

Keep in mind, you can pay a higher deductible in order to lower your premium, but this means that when you take your animal in the amount you must pay out of pocket will be higher and you will not get this money back. Likewise, you can lower your deductible and pay a higher premium.

Copay- A percentage of covered expenses that you pay after the deductible is met. So Let’s say you have a bill for $3000. You have a $200 deductible and after that everything is covered. You will pay $200 for your deductible, then 20% of 2800 which is $560. This brings the total you will pay to $760 and your insurance will cover $2240. But keep in mind this is assuming all the charges are covered.

It is important to research your insurance plan to see what is and what is not covered. Anything that is not covered you will have to pay for.

Choosing a higher co-pay will also lower your premium, but again, co-pays are non-reimbursed out of pocket expenses so be sure you choose something you can afford.

Maximum Payout- Maximum payout is the absolute maxium amount of money an insurance company is will to give you. There are five types of maximum pay outs:

Per Incident - maximum they will reimburse for each new illness, accident or injury. Once you hit this limit you will not be reimbursed for that particular incident any more.

Per Year- maximum they will reimburse your entire policy for the whole year, also known as a Maximum Annual Payout

Lifetime- this is the absolute total they will pay over the lifetime of your pet. Once this has been reached they will terminate your policy.

Per Body- this is the maximum amount they will pay for a particular body system such as the digestive or nervous system. Once you reach this cap, they will not pay for any injury or illness in that part of the body.

Benefit Schedule- this is used to determine how much will be paid for certain things. Companies that use this will have a set amount for certain diseases

Some companies will use a combination of the two. The higher your payout amount the more you will pay in premiums.

You can visit any licensed vet in the United States and some even allow you to visit vets in another country, primarily because of the difference in billing. With human health the doctor bills the insurance, but with pet insurance you pay the bill and then submit the costs to the insurance company via a claim. They then reimburse you for the covered costs.

You should never buy any form of insurance as a way to save money or invest. Pet insurance should be viewed as a way to protect yourself from an unexpected economic blow. You are protecting yourself, and your family, from being put into a bad financial spot should the unexpected occur.

Do I Need It?


So, do you need pet insurance? To best make this decision you need to understand the costs associated with owning a pet. Pet insurance helps you cover catastrophic and unexpected accidents and illnesses that are shockingly costly to treat.

Emergencies, chronic diseases and sudden diseases can all be costly to treat. Emergencies and sudden, acute diseases can come without warning and chronic diseases drain your resources over time. Emergency bills can vary in range from $500 to $2500 and even up and around $5000 or $10,000 depending on the emergency and the hospital care necessary. Chronic conditions can  be between $250 and $2500 when they flair up with recurring treatment costs ranging between $100-300. If you are looking to do a detailed analysis on whether insurance is right for you, sit down with your vet and look over the reasons pets come in to the vet. Ask for a high ball figure, mid-range, and a low ball figure for each issue.

Top Ten Reasons Cats Visit the Vet
Lower Urinary Tract Disease
Gastritis or stomach upset
Chronic Renal Failure or Kidney trouble
Enteritis or Diarrhea
Skin Allergies
Ear infections
Upper Respiratory Virus
Eye Inflammation

While you could set up a savings account to help cover vet fees, you cannot know how quickly after starting it, or how much time between emergencies you will have to build it up. A savings account is a great way to handle routine things, but insurance will help you if there is an emergency. There are also insurance alternatives such as financial assistance programs, lines of credit, or hospice care, but be sure you research them thoroughly.

Before making the decision, however, there are some things you definitely need to ask yourself.

If my animal were to suddenly become ill and injured, could I afford a vet bill of $500, $1000, or $3000?

Can I afford an insurance premium between $20-50 every month?

Is my pet prone to accidents or injuries and are they outdoors most of the time?

Depending on your answers, you will want to begin research different pet insurance companies.

Choosing Your Pet Plan

Picking your pet insurance has two main areas, picking the right maximum payout and making sure certain things are definitely covered by your policy.

Using your list of diseases and your estimated figures from your vet, figure out the worst case scenario cost. You will want to pick a plan that gives you the most flexibility. Look at plans that offer a maximum annual, maximum incident, and maximum lifetime payouts that are higher than your worse case costs for each situation.

Remember, even though a higher maximum payout will raise your premium, once these payout amounts are reached you will not receive any further assistance and in the case of the lifetime payout your policy may even be cancelled.

There are five points of coverage you will want to make sure your pet insurance policy has. Pets with pre-exiting conditions and older pets will likely have more limited options, but try to find a policy that offers as many of these as you can.

Cancer Coverage
Chronic Disease Coverage
Continuing Chronic Disease Coverage
Hereditary and Congenital Diseases Coverage
Common Breed and Species Coverage

Some companies have these already included, some offer them as add-ons and others will not offer them at all. These are, however, the things you want at the core of your policy.

You will want to look for a policy that does not limit how you can use your maximum payout. You cannot know what diseases your pet will get so you will want to be able to direct your payout at whatever comes up. Avoid plans that put restrictions on the payout coverage for these five issues.

Remember to stack the odds in your favor. You won’t want something unexpected to come up and then find out it’s not covered by your plan. Cover as many bases as you can afford to cover.

Some companies give you the option of purchasing additional care such as:

Behavioral Therapy
Alternative Therapy or holistic medicine
Wellness and Routine
Dental (Accident and Illness)

Be sure you find out what the limitations are on these before you add them to your policy.

So, you’ve made the decision to purchase pet insurance. What do you still need to know?

Be sure you read all of your policy. This is the only way you will know all the terms and conditions, exclusions and requirements. You usually can find a sample policy on their website and if not, you can request one via email. Read this so you know what to expect on your own.

Do as much pre-planning and research as possible. Remember that pet insurance companies are a business not a charity. They may make changes to improve their profits and you must be prepared for this. Keep in mind that not all coverage will work in all states, so know which states are excluded. Get it as early as you can as older pets and those with pre-existing conditions can be more difficult to get coverage for. Know who the underwriter of your policy is because you will want one that is as financially healthy as possible. Know when the company started and research their reviews. Know what the enrollment age limits are so you don’t enroll a pet that is too old. Be sure you know the waiting period before coverage starts. Find out if they base their reimbursement costs on what is considered usual and customary as this can affect your premium prices. How do they determine reimbursement?


For more information about pet insurance, you can check out Pet Insurance University.



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