What is pet insurance?
Pet insurance is just that: a health insurance policy for your pet. These policies are similar to human healthcare policies and are available for animals such as dogs, cats, reptiles, birds, rodents, and even domesticated potbellied pigs. A pet insurance plan typically covers part or all of your pet’s healthcare expenses.
Purchasing a health insurance policy for a pet may sound frivolous to some people, even current pet owners. Some owners may have a pet that hasn’t needed significant veterinarian attention in years. Others may feel like it’s easier to pay these bills as they arise rather than to pay into an insurance policy that they might use only rarely.
The purpose of pet insurance is the same as other insurance policies: You’re attempting to financially safeguard yourself for an unfortunate event in the future. A pet insurance policy is an investment, and it makes financial sense for many pet owners.
Important Information: One-time medical expenses like spaying and neutering can range from as little as $20–$40 at a government-run animal services center to more than $200 for a large dog at a privately owned veterinary clinic.
Veterinary expenses to consider
Recurring expenses for pet care include annual vaccinations for diseases like distemper, hepatitis, leptospirosis, parvo, and parainfluenza. These vaccinations can range from $75 to $100, according to the American Kennel Club.[1] Rabies vaccinations, required by state law, may cost between $15 and $20 per shot. These costs can quickly add up.
Additionally, older pets often have weakened immune systems, which may increase their chances of getting sick. And they may require special care as they age, which can get very expensive.
Pet insurance policies could help pet owners save money on expenses such as medications, treatments, and veterinarian visits, depending on the type and limits of the coverage purchased.
Keep Reading: Should You Buy Pet Insurance?
How pet insurance policies work
Understanding pet insurance is a lot easier by demonstrating when and how you can file a claim:
Your policy includes a deductible, the minimum amount you’ll need to pay toward veterinary services before your reimbursement kicks in to cover the rest.
After reaching your deductible, you’ll need to fill out a claim form provided by your pet insurer. Your vet will also fill out part of this form, and you’ll submit it back to the insurance company.
Your provider may reimburse you for a percentage of your costs, which is between 60% and 100% of the expense on average, depending on the plan you’ve purchased. If your provider reimburses on a benefit schedule, you’ll receive a predetermined amount, regardless of your total expense.
Many providers have payout limits, which means you can be reimbursed for only up to a certain amount. This payout limit may be based on a per-incident, per-year, or per-lifetime limit.[2]
Let’s look at a hypothetical scenario in which your pet sustains an injury while your policy is active. The cost for the treatment is $1,000, and your deductible is $200.
You’ll pay the vet the full cost of treatment and then request a claim form from your insurer. You’ll fill out the claim showing that you’ve paid $800 after hitting your deductible; your vet will also provide information for this claim, such as an itemized invoice.
You’ll then submit the claim to your pet insurance provider, and they’ll reimburse you for a certain percentage of your bill as decided by your plan’s coverage range and limits.
Take Note: Most pet insurance policies require you to pay veterinary expenses up front and then submit a claim for reimbursement. But some pet insurers do pay vets directly for covered expenses.
