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Pet Insurance


Pet insurance is similar to people insurance. You pay premiums to the insurer, who then covers your pet minus any co-pays, deductibles, and non-reimbursed costs. Pet insurance companies offer many different types of plans and prices.

There are traditional plans where you can choose the veterinarian for services. Pet HMO's include a network of veterinarians members can choose from. Plus there are discount clubs where for a fee you get a discount on veterinarian services, health, and grooming products.

In addition to basic health care coverage, other more specialized types of insurance -- including pet life insurance, third party pet liability insurance, and pet travel insurance are available.

If you foresee the possibility of large expenditures for veterinary care for your pet and want to have financial peace of mind, then pet insurance may be just right for you.

In cases of catastrophic accident and illness, insurance can be a lifesaver for pets without draining owners financially.

Types of Pet Insurance

1. Pet Health Insurance
Most pet health insurance is the indemnity type. Your pet gets sick and you take him to the veterinarian. You pay the bill, submit it to the insurance company, and they send you a check after subtracting any deductible or co-pay. Some companies will pay your veterinarian directly after he bills the insurance company.

Some companies offer an HMO style policy, or a discount plan which restricts you to a particular network of care providers who have agreed to be a part of the plan.

The membership fees for these plans are fairly modest, about $100 per year, with discounts usually averaging 25% for veterinarian visits and treatments. The only catch is that you can only go to a veterinarian who is involved in the program, the equivalent of a preferred provider physician. Depending on your finances and the type of pet you have, some of these plans may be worth checking out. Your veterinarian may have this kind of plan in place.

Most pet insurance companies offer only dog and cat health insurance, though there are a few that will cover other pets as well, such as birds, rodents, reptiles, and exotic animals. Many have age restrictions and will only insure pets from about 6 months old to 8 or 9 years of age. A few offer senior policies that cover older pets, or lifetime policies that will stay with your pet all his life.

As with people insurance, pet insurance policies have fine print. The fine print addresses various coverage levels, waiting periods for policies to take effect, exclusions (for pre-existing or congenital conditions), deductibles, payout caps per incident, per year and per ailment. Read it all before you buy! With lifetime insurance policies you might not be able to change without significant financial penalties and costs. Talk to several pet insurance companies before you buy.

Questions to Ask When Shopping for Insurance

  • Are congenital, hereditary, and pre-existing conditions covered by pet insurance?
  • What is the waiting period for your pet's insurance coverage to take effect?
  • What are the deductible levels on the policy?
  • What is the co-pay for treatment and prescriptions -- if covered?
  • Will the insurer cover routine wellness care, such as vaccinations against diseases?
  • What about testing and treatment for heartworms, dental, and eye care?
  • Does the policy cover neutering or spaying costs, nail trimming and grooming, flea and tick control?
  • Does the policy cover prescriptions?
  • Can you pay for the policy on a monthly basis?
  • Will you get a discount for insuring multiple pets?
  • Are you limited to the insurer's choice of veterinarians, or can you choose your own?
  • How long does it take for a claim to be processed?
  • Is there a lifetime limit on payouts and what are the annual caps on payment?
  • What are the caps for specific illnesses and specific incidents?

Types of expenses most often covered by pet health insurance policies are:

  • 24 hour emergency care clinics and hospitals
  • routine office visits
  • diagnostic tests for illness
  • prescriptions (prescribed by veterinarian)
  • X-rays, blood work
  • lab fees
  • hospitalization (might be limits on how many days)

Types of conditions most often covered by pet health insurance policies are:

  • sickness and fractures
  • accidents, including ingestion of foreign objects, accidental poisoning, cuts and lacerations, etc.
  • serious illnesses such as pneumonia, bone grafts, cancer, liver disease, etc.

After a deductible and often a copay of 10 - 20% basic standard plans usually cover emergencies, standard treatments, and major medical costs. These can be annual plans you pay for by the year, or lifetime plans with annual premiums for the life of your pet. These policies cover only the most basic expenses.

Premium plans not only cover more conditions and types of expenses than the basic insurance plans, but can include riders that cover routine care, vaccinations, dental care, nail clipping, and sometimes grooming. They can also include extended care for elderly pets, medications, supplies, and free help lines. Special plans are available for elderly pets, as well as those with special needs.

Alternative plans offer a preferred-provider or network style of coverage. You pay a fee and gain access to a listing or network of providers and suppliers who have agreed to discount their fees to card carrying members.

2. Pet Life Insurance
This is exactly the same as people life insurance where a monthly or yearly premium is paid in exchange for receiving a lump some of money on the death of your pet. There are variations and riders available, such as accidental death policies if your pet should meet with an untimely demise. Some of these policies include bereavement counseling for the pet owner, as losing a pet can be and often is as traumatic as the death of any other family member. Pet life insurance has not yet caught on to the extent that pet health insurance has, though it is getting easier to find.

3. Pet Travel Insurance
These insurance policies cover unexpected expenses for pets associated with travel, with or without their owner.

Types of expenses most often covered by pet travel insurance policies are:

  • emergency veterinary expenses while traveling
  • reimbursement for cancellation or postponement of trip expenses, if your pet is certified too ill to travel or dies on vacation
  • hospitalization of owner pays for the cost of caring for your pet, if you need to be hospitalized while traveling
  • accidental death or loss of pet coverage pays a preset amount if your pet dies, is lost or stolen on vacation
  • reimbursement for fees if your pet is ill or has died while on holiday such as costs for disposal
  • replacement documents covers costs of obtaining new papers for your pet if lost or stolen while on vacation

4. Miscellaneous Insurance Types
There are several other types of insurance coverage you can purchase for your pet.

  • Third party liability insurance, covers you for the cost of any damage your pet may cause to someone else's property or person, and is usually restricted to just dogs.
  • Loss or theft insurance repays you the amount you paid for your pet.
  • Advertising and reward insurance pays the cost of advertising your lost or stolen pet, as well as a reward to entice his return.
  • Kennel (or cattery) insurance pays fees if you have to be suddenly hospitalized for more than a specified period of time, usually a few days to a week.
  • Legal riders pays your attorney fees if you must defend yourself in a lawsuit for damages caused by your pet.

Pet Insurance Prices
Because of advances in medicine and high-tech techniques such as MRI's, CAT scans, radiation therapy, and specialized surgeries, costs of veterinary care are increasing. If your pet requires these treatments, the costs can quickly escalate into exorbitant amounts.

Basic health care can run from $2,000 - $6,000 over the life of a pet. Treatments for a single serious illness can be $5,000 alone. Any type of emergency after-hours treatment is likely to be extremely expensive.

Pet insurance is sold by companies directly selling their own insurance products. Often you will see that it is underwritten by another company, which means that another larger or parent company has determined the premium and is assuming the risk.