How Does Pet Insurance Work? (2024)

Dogs and cats can pull off some acrobatic stunts, but they don’t always stick the landing. Think of a dog who leaps into the air to catch a frisbee, only to land awkwardly and come up limping.

Accidents (like a broken bone) and illnesses (such as cancer) can cost thousands of dollars to treat. Pet insurance can be a good way to help offset these costs.

What Is Pet Insurance?

Pet insurance is much like a health insurance policy for a pet that covers medical expenses such as X-rays, bloodwork, medications, hospitalizations and surgeries. Non-medical expenses could also be covered, such as pet boarding if you’re in the hospital or a reward for a lost pet.

Some of the best pet insurance companies offer plans that cover other types of expenses, like vaccinations and wellness exams.

Types of Pet Insurance Plans

Pet insurance plans can typically be broken down into three types of plans:

• Accident and illness plans. This is the most common type of plan and covers medical expenses for accidents (like broken bones and swallowed objects) and illnesses (like cancer, eye conditions and bladder infections).
• Accident-only plans. These cover only accident-related medical bills (like bite wounds or toxic ingestion), and won’t cover illness-related problems. Accident-only plans are cheaper than accident and illness plans because they cover fewer problems.
• Wellness plans. Some pet insurance companies offer an optional wellness plan that covers expenses such as routine wellness exams, vaccinations and flea, tick and heartworm prevention.

How Does Pet Insurance Work?

Most pet insurance plans are reimbursem*nt-based. You’ll pay your vet bills up-front and submit a claim to your insurer. You can take your pet to a licensed veterinarian of your choice. Some pet insurance companies, such as Trupanion, can pay the vet directly.

When you submit a pet insurance claim, your reimbursem*nt amount will depend on the type of plan you chose and the following:

• Coverage limit. This is the annual amount that your plan will cover. Common coverage limit choices range from $5,000 per year to unlimited annual coverage.
• Deductible. This is the amount of money you need to pay for vet bills before your coverage kicks in. Common pet insurance deductible choices range from $100 to $1,000.
• Reimbursem*nt level. This is the percentage you’ll be reimbursed for your pet’s vet bills. Common reimbursem*nt choices are 70%, 80% or 90%.

Example of a Pet Insurance Claim

• You take your pet to the vet because they have ingested foreign object.
• After surgery, your vet bill is $3,500.
• You pay your vet bill and submit a claim for reimbursem*nt to your insurer, which includes a copy of the pet’s medical records and veterinarian invoice.
• Your pet insurance company will review the claim, and if the problem is covered, you’ll be reimbursed up to your coverage limit. Your deductible and reimbursem*nt level will apply.
• Say you have a $250 deductible and an 80% reimbursem*nt level. You will get reimbursed $2,600 ($3,500 cost of surgery – $250 deductible x 80% reimbursem*nt level = $2,600).

What Does Pet Insurance Cover?

What’s covered by pet insurance depends on the type of plan you buy. Accident and illness plans cover medical expenses related to injuries and sickness like broken bones, cruciate ligament damage, cancer, ear infections, hereditary conditions and more.

Common examples of medical expenses that are covered by pet insurance include:

• Emergency and specialty care.
• Testing and diagnostics, such as blood tests, CT scans and X-rays.
• Procedures, such as hospitalizations and surgeries.
• Holistic and alternative procedures, such as acupuncture and chiropractic.
• Prescription medications.
• Prescription food and supplements.
• Behavioral therapy.
• Euthanasia if it is vet recommended for humane reasons.

Accident-only plans only cover only medical expenses related to an accident, like a bite wound or broken bone.

Pet Insurance Coverage for Hereditary and Breed-Specific Conditions

Hereditary and genetic conditions

A hereditary or genetic condition is a condition that is passed down to a puppy or kitten from its parents. Hereditary and genetic conditions can affect both purebred and mixed breed dogs and cats. Common hereditary conditions include allergies, hip dysplasia, inflammatory bowel disease and cancers (such as lymphoma).

Pet insurance companies generally cover hereditary and genetic conditions, but it may not be covered if symptoms of a condition are present before you buy a pet insurance plan or during the waiting period. That’s because pet insurance plans don’t cover incurable pre-existing conditions. For example, if your dog has symptoms of inflammatory bowel disease before you buy a plan, you won’t be covered for expenses related to that condition.

Breed-specific conditions

Some purebred dog breeds are more susceptible to certain types of health conditions than other breeds. For example, a boxer has the highest risk for making a cancer claim compared to any other dog breed, according to a Nationwide pet insurance analysis of pet insurance claims.

Another example are brachycephalic dog breeds like English bulldogs, French bulldogs and Shih Tzus. These types of breeds are nearly three times more likely to have a claim for respiratory issues, according to Nationwide.

Breed specific conditions are generally covered by pet insurance, as long as your dog or cat is not showing symptoms of the disease before you buy a plan or during the waiting period (or it would be considered a pre-existing condition). For example, if your French bulldog is diagnosed with an inflammatory upper airway disease before you buy a plan, you would not be covered for any vet expenses related to that illness.

What Does Pet Insurance Not Cover?

Common pet insurance exclusions include:

• Boarding. Most pet insurance plans won’t cover boarding costs, but some pet insurance companies cover this expense if you are hospitalized.
• Breeding, pregnancy or whelping. Expenses associated with breeding, pregnancy or whelping are usually excluded.
• Cosmetic procedures. This includes tail docking and ear cropping.
• End of life expenses. Some pet insurance policies include burial or cremation costs as an add-on coverage or as part of a wellness plan.
• Experimental treatment. Treatment and diagnosis that is considered investigational, experimental or not within the standard of care accepted by your state’s medical board is typically not covered.
• Food, dietary and nutritional supplements. Your pet’s regular dietary expenses are not covered, but some insurers cover prescription food and supplements.
• Grooming. This includes grooming services such as baths, shampoos, dips and nail trims.
• Non-veterinary expenses. This includes expenses such as record access or copying, any license or certification (such as a dog license) and waste disposal services.
• Pre-existing conditions. A pet pre-existing condition is an illness or injury that your pet had before your pet insurance coverage started. Some plans cover “curable” pre-existing conditions if your pet remains symptom-free for a certain period of time, such as 180 days.

How Much Does Pet Insurance Cost?

The average pet insurance cost for dogs is $44 per month and the average pet insurance cost for cats is $30 per month, based on Forbes Advisor’s analysis of pet insurance costs. That’s for a policy with $5,000 annual coverage, a $250 deductible and 80% reimbursem*nt level.

Your pet insurance costs will depend on several factors, including:

• Type of pet
• Breed
• Age of pet
• Where you live
• The type of plan you choose
• Amount of coverage limit, deductible and reimbursem*nt level

Pet Insurance vs. Exotic Pet Insurance

Most pet insurance plans cover only cats and dogs. Exotic pet insurance is similar to a standard pet insurance plan but is designed for other types of pets, including amphibians, fish, reptiles, small mammals and birds.

Nationwide pet insurance is currently the only insurer that offers exotic pet insurance. Its policy covers vet expenses for accidents (like broken bones or soft tissue trauma) and illnesses (like foreign body ingestion or arthritis).

Animal Species Covered by Pet Insurance vs. Exotic Pet Insurance

Is Pet Insurance Worth It?

When you’re deciding if pet insurance is worth it, look at monthly cost and your financial situation. An unexpected illness or accident can cost thousands of dollars in vet bills. If you don’t have the financial reserves to pay this out of pocket, pet insurance can be a good way to help offset major vet expenses.

The average treatment for cancer for a dog costs $4,100. If you can’t afford to pay out-of-pocket for your dog’s cancer treatment, pet insurance can cover the majority of this expense.

For example, the average treatment for cancer for a dog costs $4,100, according to a Forbes Advisor analysis of vet visit costs. If you can’t afford to pay out-of-pocket for your dog’s cancer treatment, pet insurance can cover the majority of this expense, minus your deductible and your share of the reimbursem*nt level. If you had a $250 deductible and 80% reimbursem*nt level, your out-of-pocket cost would be $1,020 ($250 deductible + 20% of $3,850 = $1,020).

How Do I Find the Best Pet Insurance?

You can find the best pet insurance for your budget and needs by determining the type of plan that’s suitable for you, deciding how much coverage will suffice and comparing waiting periods and prices.

Choose the Best Pet Insurance Plan for You

A comprehensive pet insurance plan that covers accidents, illness and wellness expenses is the most expensive type of plan because it covers the widest range of health-related problems. But some pet owners prefer a less expensive and scaled down option that covers only accidents.

Choose Your Annual Coverage Level

When you buy a pet insurance policy, you’ll often be able to choose an annual coverage limit, the pet insurance deductible amount and reimbursem*nt level. You can get cheaper pet insurance premiums if you select a lower coverage limit, higher deductible and a lower reimbursem*nt level.

For example, a plan with unlimited annual coverage, a $100 deductible and 90% reimbursem*nt level will cost more than a plan with $5,000 of annual coverage, $500 deductible and 80% reimbursem*nt level. But keep in mind that plans with lower coverage limits and reimbursem*nt levels will result in higher out-of-pocket costs if you file a pet insurance claim.

Check the Pet Insurance Waiting Period

All pet insurance companies have a “waiting period,” which is the amount of time between when you buy the policy and when the coverage kicks in. Common pet insurance waiting periods are 14 days for accident coverage, 14 days for illness coverage and six months for orthopedic conditions, such as cruciate ligament damage.

Not all pet insurance companies have the same waiting periods. For example, Embrace pet insurance has a two-day waiting period for accidents and ASPCA pet insurance does not have a waiting period for orthopedic conditions.

Look for Pet Insurance Discounts

Here are some pet insurance discounts you might find:

• Annual pay discount. You may be eligible for a discount if you pay your annual premium in one lump sum.
• Bundle discount. Your insurer may offer a discount if you bundle your pet insurance with other insurance types. For example, Lemonade pet insurance offers a 10% discount if you bundle pet insurance with a Lemonade homeowners or renters insurance policy.
• Military discounts. Some insurers offer discounts for active military members and veterans.
• Multipet discount. Many insurers offer this discount if you insure more than one pet.
• Spay/neuter discount. You could be eligible for savings if your pet was spayed or neutered.

Other Pet Insurance Comparison Factors

Consider these other factors if you’re shopping for a pet insurance policy.

• Benefits. Some pet insurance companies offer benefits like a 24/7 vet telehealth line in case your pet gets sick in the middle of the night. Another example is Nationwide pet insurance, which offers preferred pricing on pet prescriptions at any Sam’s Club or Walmart pharmacy.
• Exam fees. You’ll be charged an exam fee when you visit your veterinarian. Some pet insurance companies will cover this fee while others do not.
• Optional wellness exams. If you want coverage for routine wellness exams, vaccinations, and flea, heartworm and tick prevention, you’ll need to add a wellness plan to an accident and illness plan. But not all insurers have this option.

Compare Pet Insurance Prices

Once you’ve narrowed down what type of plan you want, coverage levels and other benefits, it’s time to start shopping for pet insurance. You’ll find different prices among most companies, even if it’s for similar coverage.

The best way to find a good price on pet insurance is to compare pet insurance quotes from multiple insurers. You can get free pet insurance quotes:

• Online. You can get quotes at an insurer’s website or by using a comparison provider to review several options at once.
• Phone, email or in-person. You can speak with an insurance agent who works for a pet insurance company or you can contact an independent insurance agent who can gather multiple quotes from different pet insurers.

How Does Pet Insurance Work FAQs