What Is Pet Insurance? A Complete Guide (2024)

Pets have some important jobs, like looking adorable and providing you with affection, but they don’t earn income to contribute to the household bills. If your pet becomes sick or injured, you may not be able to afford veterinary care on your own.

Pet insurance reimburses you for many of the veterinary expenses you may face in exchange for a manageable monthly payment to the insurance company. Learn how it works and what to consider when shopping for a pet insurance policy.

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What is pet insurance, and how does it work?

In some ways, pet insurance works similarly to human health insurance. It covers the cost of diagnostics and treatment when your pet experiences an illness or injury.^[1] These veterinary services can be expensive, especially if your pet needs surgery or other specialized care. But health insurance for humans and pet insurance have some key differences.

Pet insurance typically reimburses you for your pet’s medical bills rather than paying your veterinarian directly.^[2] That means you can typically see any licensed veterinarian in the U.S. for your pet’s care rather than relying on a network of veterinarians and facilities. And unlike major medical plans for humans, pet insurance doesn’t usually cover pre-existing conditions, with some exceptions.

Every pet insurance company is different, and some offer multiple plan options and coverage levels to choose from. But these are some common pet health insurance policy features you should know about:

• Premium: This is the monthly or annual payment you make to your pet insurance company to keep the policy active. The amount will depend on your pet’s species, age, breed, location, and the company and coverage options you select.

• Annual deductible: This is the amount you’ll be responsible for each year before your policy begins covering your veterinary costs.

• Limit: Most pet insurance policies come with an annual or lifetime limit. Your insurance company won’t reimburse you for expenses above and beyond this limit.

• Claim: When your pet needs care, you’ll file a claim with your pet insurance company for reimbursement.

• Reimbursement level: This is the share of each claim your policy covers.

• Waiting period: Most policies have a waiting period between when you purchase your policy and when coverage kicks in. Some pet insurance policies have separate waiting periods for specific conditions or cured pre-existing conditions.

• Exclusions: Most pet insurance policies don’t cover every expense. Consider common exclusions, like hereditary conditions, when comparing policies.

Pet insurance example

Let’s say your dog swallows a sock and it causes an intestinal blockage, requiring emergency surgery. While you’re grateful the vet was able to save your dog’s life, you’re not exactly thrilled when they hand you a $5,000 bill. You pay the bill with a credit card and go home to file an online claim with your pet insurance company.

Your policy has a $250 deductible, a 90% reimbursement level, and a $10,000 annual limit. A few weeks later, you get a check from your insurance company for $4,275. Your dog is healthy, and you can rest easy knowing you’ve avoided going into credit card debt from the expense.

What pet insurance covers and doesn’t cover

Coverage varies by company and the type of coverage you purchase, but a comprehensive plan may cover any veterinary service related to accidents, like broken bones after a car accident or accidental poisoning, and illnesses, like ear infections or cancer. Commonly covered care services include exams, X-rays and other imaging, prescription medications, lab work, and procedures, like surgeries.

If you purchase a wellness plan, which companies typically offer as an add-on, you’ll also have coverage for routine care, like annual exams, vaccines, routine dental cleaning, and preventive medications. Depending on the plan, you may not have to pay a deductible before routine care is covered, but most wellness plans cap benefits at a certain dollar amount for each service.

Some common pet insurance policy exclusions are:

• Pre-existing conditions

• Bilateral conditions that were pre-existing on the other side

• Conditions that arise during a waiting period

• Hereditary and congenital conditions

• Dental care

• Behavioral conditions

• Preventable conditions

• Food, supplies, boarding, and grooming

• Alternative medicine, like chiropractic and physical therapy

• Experimental treatments

• Issues related to breeding or pregnancy

• Intentional injuries

• Cremation and autopsy

Types of pet insurance

Pet insurance companies may offer up to three types of pet insurance policies. Within each type, you may have multiple coverage options. Many pet insurers also offer optional add-ons that cost extra and expand the coverage of the policy.

• 

  Accident-only plans

  Accident-only plans cover only unexpected injuries, so these policies don’t offer reimbursement for chronic or acute illnesses. They may be a good option for older pets with several pre-existing conditions. Since accident coverage is typically more affordable than accident and illness coverage, it can also be an option for pet owners on a strict budget.^[3]

  Some commonly covered accidents include the following medical emergencies:

  • Accidental poisoning

  • Swallowed objects

  • Bite wounds

  • Bee stings

  • Broken or fractured bones

  • Muscle sprains

  • Cuts or abrasions

  • Fractured teeth

  • Eye injuries

  • Torn nail

• 

  Accident and illness policies

  Accident and illness plans are more comprehensive, covering a wide range of diseases and corresponding treatments that accident-only policies don’t cover. They’re more expensive, but they can save you money if your pet develops an acute or chronic illness.

  In addition to the accidental injuries listed above, accident and illness policies commonly cover the following:

  • Cancer

  • Diabetes

  • Pneumonia

  • Arthritis

  • Allergies

  • Giardia

  • Digestive issues

  • Urinary tract infections

  • Ear infections

  • Skin infections

  • Epilepsy

  Some plans also cover behavioral conditions, genetic conditions, and dental illnesses.

• 

  Wellness policies

  Many pet insurance companies offer wellness plans or preventative packages that cover your pet’s annual exam and other routine care. They’re typically offered as an add-on, and some insurers offer multiple plan options or specific plans for puppies or kittens. Wellness plans are typically not subject to your deductible, and coverage kicks in right away without a waiting period.

  Because wellness plans tend to cap benefits for each service, they offer more limited savings than accident and illness coverage. But a wellness plan may be worth the cost if you plan to use all the covered services. Wellness policies commonly cover the following:

  • Annual wellness exams

  • Vaccinations

  • Routine diagnostics and screening tests

  • Preventive medication

  • Routine dental cleaning

  • Microchipping

  • Deworming

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How to choose the right pet insurance

Pet insurance companies offer varying levels of coverage for your pet’s medical expenses and charge a wide range of insurance premiums. The most expensive policy won’t necessarily be the best. The best pet insurance plan for you will fit your budget and meet your pet’s needs. Consider the following factors when comparing dog and cat insurance companies:

• Cost: Compare individual quotes from a handful of pet insurance companies to get a cost estimate based on your pet’s species, age, breed, and location. Some pet insurance companies may offer more affordable premiums than others for the same coverage.

• Coverage: Consider which accidents and illnesses are covered as well as which medical treatments are covered. For example, some pet insurance companies cover vet visit fees, while others exclude exam fees or offer the coverage only as an add-on.

• Exclusions: Pay attention to policy exclusions. For example, if your pet has already had hip dysplasia on the right side, you may want to find a pet insurance company that doesn’t exclude bilateral conditions from coverage. If you want your pet to have access to chiropractic treatment, look for a policy that doesn’t exclude alternative treatments.

• Waiting periods: Consider the waiting periods for covered accidents and illnesses and whether there are separate waiting periods for specific injuries or cured pre-existing conditions.

• Claims process: Check how you can file a claim and how long it typically takes to receive reimbursement from the pet insurance companies you’re considering. Some pet insurance companies offer easy claims-filing on a mobile app.

• Payment methods: Most cat and dog insurance companies reimburse you for vet bills you’ve already paid, but some offer the option to pay your vet directly. If you don’t have an emergency fund or a credit card, consider choosing a company with direct vet pay.

• Deductible and reimbursement options: Make sure the pet insurance company you choose offers options that work with your budget. If you want to keep your premiums low, choose a company that offers a high deductible and lower reimbursement levels. If you don’t want high costs to catch you off guard, find a plan with 100% reimbursement and a low deductible.

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