Pet Insurance: The 411

Updated on January 4, 2019

Breaking it Down

Pet insurance is starting to gain popularity and is becoming more widely available. Some employers are even offering it with their benefits packages. Why is this? It's simple. People love their pets. Most people view their pets as a member of the family. It is no secret that veterinary bills, especially those that are unexpected, can be very expensive. Pet insure can help to alleviate the burden of taking care of pets.

It is important to keep in mind that just like with human insurance not all pet insurance is the same. Some will only cover wellness services. These services include semi-annual or annual exams, vaccines, routine lab work, or even heartworm and flea/tick prevention. Some plans will only over illnesses and injuries. And of course there are plans that will cover both wellness and illnesses and injuries.

Another important thing to keep in mind is the coverage itself. There is a big difference between 90% coverage and coverage that is up to 90%. Remember, you want to know exactly what your coverage is before you need to use it.

Cats may love climbing Christmas trees, but can be injured by ornaments, falling, or getting tangled in the lights.
Cats may love climbing Christmas trees, but can be injured by ornaments, falling, or getting tangled in the lights.

Insurance Lingo

Most people have a basic understanding of 'insurance lingo', but they really don't know much about it. When researching which insurance plan to go with you will want to pay attention to a few things, aside from what exactly is covered by the plan. The premium and the deducible are very important to pay attention to.

The premium is the monthly amount for the insurance. The deducible the the amount that must be paid out of pocket before the insurance company will start to cover a claim. For example if you have a $250 deducible and your bill is only $200 you should not expect your insurance company to make a payment on this claim, unless you had already met your deducible of course.

Now, things can get a little tricky here. Some insurance companies use a deducible per year, this is similar to human insurance. Some insurance companies use a deductible per instance. There is a BIG difference between the two. Using the $250 deductible from before lets go through another scenario.

  • Your dog needs sutures for a cut on the paw and the bill is $300. A month later your dog eats a cup of grapes and needs to be hospitalized for liver and kidney support to the tune of $800.

Now with an annual deducible you will have met your deducible in the first visit and the insurance company will start making payments on what they cover for that visit. They will also cover the entire bill for the second visit, well they will cover all of what they cover per your plan.

However, if you have a per instance deducible of $250 you will need to pay it for both of those visits. Then the insurance company will make payments.

Think of the deducible as the payment you need to make in order for the insurance coverage to kick in.


Researching Pet Insurance Companies

When you are looking into different companies for pet insure pay attention to what is covered. Company A may have a low monthly premium but it may only cover 50% of some services, 20% of others, and 90% of a few. Company B may have a higher monthly premium but cover 90% of all services covered. Depending on your situation and the health of your pet you may end up saving more money with company B even though you pay more for the insurance each month.

Most pet insurance companies have great tools on their websites to help you figure out if their plan is best for your. They will list out what they cover, show example claims, and they will let you know exactly what you will be responsible payment wise. I strongly recommend researching several companies before you enroll your pet on a plan.


How Does Pet Insurance Work?

Do you take XYZ insurance? Its a question very commonly asked of veterinary hospitals. Well, the hospital doesn't do much with pet insurance to be honest. Most of the work is done by the client. Lets say you bring in Fluffy for an ear infection. The veterinarian does an exam, runs a cytology, determines Fluffy has a yeast infection and gives the corresponding treatment. You will need to pay your bill to the veterinarian's office, file a claim with your insurance company, and wait to be reimbursed. Sometimes the insurance company may want something filled out by the veterinarian or needs the medical records sent for further review, but that's about it for the involvement of the veterinary hospital. Of course, some hospitals may provide the service of submitting the claim for the client.

There is no magic industry wide veterinary coding. There is no back and forth between the hospital and the insurance company. It is a lot similar than human medical insurance.

A lot of people are often surprised that they need to pay out of pocket right away when they have insurance for their pet. Especially since this is not how it is done with human medical expenses. But, if you think about it for a bit it really makes sense. Most veterinary hospitals are small businesses. The insurance claim could take weeks to be finalized and paid out if it is even approved at all. Then the veterinary hospital would need to track down the pet owner to have them pay the balance. It would be a lot more hassle and risk for the veterinary office? What if the claim was denied and then the client refused to pay their bill because they thought it should have been covered? That's not a situation that many small business can afford, especially if happens regularly. Simply put, pet insurance is between the pet owner and the insurance company.

Is It Worth It?

I'm asked this a lot at work: is pet insurance worth it? Well, that can be a bit tricky. To answer that you'll need to know a few things. How much is the monthly premium, how much is the deductible, what exactly and how much is covered by the insurance, and how much are the veterinary services. Chances are your veterinarian's office is happy to help with this. Just give them a call and ask for an estimate with pricing for a year's worth of recommended wellness services: semi-annual exams, vaccines, lab testing, and flea/tick and heart worm prevention. Then compare that estimate to what the insurance covers.

If the estimated cost for yearly preventatives is about $1000 and the insurance covers 80% of wellness services that's a savings of $800. However, you need to keep in mind the monthly premium. If its low, say $30 each month, the premium will cost you $360 for a year. That means your $800 savings is only $440.

It is a little harder to try and factor the worth of illness and injury only insurance. Your pet may not need it at all one year but may need an emergency surgery for a foreign body removal the next. Essentially, this insurance will give you the piece of mind that you can take care of the 'big stuff' if it ever happens.

An unexpected hospitalization or surgery can be quite costly. Pet insurance helps to take some of the financial burden off pet owners.
An unexpected hospitalization or surgery can be quite costly. Pet insurance helps to take some of the financial burden off pet owners.

Pre-Existing Conditions

No pet insurance will cover pre-exisiting conditions. It is as simple as that. Some insurance companies will not cover issues commonly found with specific breeds. For example if you have a German Shepherd and it he has hip dysplasia or a pug that has eye problems the insurance company may not cover those conditions since they are common with those breeds.


Fluctuations in Pricing

When researching different insurance companies find out if they tend to rise their prices each year. Do they raise the prices when you file claims? Do they have a limit on how much you can claim each year? Do they have a limit for how many times you can claim a certain instance? These things are important to know before you file a claim and it is denied because Fluffy already had three ear infections this year.

The Major Companies

NationWide and TruPanion are two of the biggest names in pet insurance. They are completely different.

NationWide has both wellness and illness and injury insurance. You can even combine the two. NationWide can raise the monthly premiums as the pet ages.With NationWide, as with nearly all pet insurance, you will need to pay your veterinarian's office directly and wait for your reimbursement check or direct deposit after the claim is filed and approved. NationWide has insurance plans for dogs, cats, and exotics. NationWide has a deductible that needs to be met each year before coverage starts.

TruPanion only covers illnesses and injuries. TruPanion covers no wellness services or exam fees. However, whatever is not an exam or wellness services is covered at 90%. TruPanion does not raise monthly premiums as a pet ages. TruPanion is partnered with many veterinarian offices for a program where TruPanion will pay the vet hospital directly. Basically, what this means is the pet owner is only responsible for paying whatever TruPanion does not cover: the deductible, wellness services, and exams. TruPanion only covers dogs and cats. TruPanion has a deductible that needs to be met per instance pet life time. (Once you meet the deductible for ear infections they are covered for the life of the pet, but you will also need to meet the deductible for joint problems, or skin conditions, and so forth)

There are many other pet insurance companies that are worth checking out, like Embrace or ASPCA. Even USAA offers pet insurance now! Just make sure that you know what you are getting in to and you don't fall victim to misleading advertisements. Remember there is a big difference between 90% coverage and coverage up to 90%.

Remember how I mentioned that no company will cover pre-existing conditions? Well, if you choose company A and you decide after a couple of years that you no longer like the coverage and want to switch to company B you may have some unforeseen consequences. Fluffy's frequent ear infections may have been covered by Company A but now are considered pre-exisiting by Company B. The same could also be said about switching plans with the same insurance company. When in doubt call and speak with someone to make sure you won't be losing coverage.

Got exotics? Not all pet insurance companies have plans for exotic pets.
Got exotics? Not all pet insurance companies have plans for exotic pets.

My Experience

I personally have both my pets on TruPanion. The monthly premiums are a bit more than say, NationWide, but for me the ability for TruPanion to pay my vet hospital directly really helps. If something happens I know that my pet is covered and I feel a lot better knowing I don't have to pay $1500 for an emergency surgery and have to stress getting my reimbursement check before my bills come due. In short, I have the insurance because I live on a tight budget and I can't afford an unexpected illness or injury. Do I think NationWide or Embrace isn't as good as TruPanion? Absolutely not. I'm just willing to pay a few dollars extra each month to be able to have the insurance company pay the vet hospital.

Now, I did sign up my dog at a later age so she has several pre-existing conditions that are not covered. While that is unfortunate, I do know that should she have any other issues later in life they will now be covered. My kitten was enrolled young, she will never have a pre-exisitng condition as long as I keep her on insurance.

So far, I haven't really needed to use my insurance yet and I'm kind of hoping it stays that way. But, if I do need it I know it is there.

The Big Take Away

Do your research before you enroll your pet in a plan. Make sure that you know what is covered, how much of it is covered, and if you will need to be responsible for payment at checkout of your veterinary visit. If you know all that then chances are you will avoid the disappoint and frustration that some people experience when dealing with pet insurance.

You can always talk with your veterinary office to see which insurance companies they see claims for most often, or if they have a company they recommend over another.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

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      • Guckenberger profile image

        Alexander James Guckenberger 

        2 months ago from Maryland, United States of America

        I didn't know that this was a thing.

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