A pet insurance policy helps you plan for your pet’s healthcare, and it offsets unexpected costs when going to the vet for pet injuries and illnesses. We’ve looked at the top choices for coverage, discounts, reimbursements, and overall quality.
Is pet insurance worth it?
A report released by APPA (American Pet Products Association) in 2020 revealed that 67% of US homes own pets, which translates to about 85 million households. It also reveals that most people spend over $30 million on veterinary care for pets. Additionally, 98% of households cannot give their pets the best healthcare when emergencies arise as the costs are expensive. A pet insurance plan allows you to give your pet medical care without breaking your bank and saves hundreds or even thousands of dollars during procedures such as surgeries.
With the increase in veterinary care, pet owners have chosen to cover their pets under a pet insurance policy. The North American Pet Health Insurance Association (NAPHIA) reported a sharp increase of 22.6% in the pet insurance industry in 2020. Since you can’t predict when emergencies will occur, pet insurance coverage protects your pet throughout the year and saves your finances.
Despite this sharp increase, many people still find it challenging to select the best pet insurance plan.
How does pet insurance work?
Pet Insurance refers to a health care policy for pets, which reimburses pet owners their money on certain medical expenditures. This insurance ensures your pet receives timely medical care during incidences and incurs a larger percentage of the costs on your behalf.
Since health insurance policies have limitations, you need to read and understand your plan before buying.
Depending on your plan, the insurance agency can refund you a certain percentage of the medical expenses as stated in the policy. While most pet insurance policies have standard policies, some providers may tailor the policies based on your pet’s age and pre-existing health condition.
When your pet is unwell, you will be required to get an itemized bill from the vet clinic and submit the claim to your insurance provider for reimbursement. Your reimbursement amount depends on your deductible, percentage of reimbursement, and annual coverage limit. Below is what you need to know about pet insurance coverage.
- Insurance Premium: The money you pay to the insurance agency to cover your pet. Premiums are paid monthly, quarterly, or annually, depending on your arrangement with the provider. Some of the factors determining your premiums’ cost include deductibles, coverage limits, additional coverage plans, length of policy, and reimbursement limits. You can request a sample plan from your insurance agency to view your premiums.
- Deductibles: The amount you need to pay to the agency before your policy begins to cover the medical expenses. Deductibles are paid annually, and you must reach the figure first before your policy starts to foot part of the medical bills under the coverage. For instance, if your policy has a deductible of $2,500, you need to pay it first to enjoy the benefits of your cover. If you have more than one pet, you will have to pay deductibles for each.
- Co-payment: A fixed amount you pay from your pocket to cover part of your bill during each doctor consultation visit or buying prescription drugs. A co-payment is paid on the spot every time you visit the veterinary doctor for consultation or need to refill your pet’s prescription drugs. For instance, your insurer can approve a co-pay fee of $30 for every doctor visit or $15 per prescription.
- Co-insurance: A fixed percentage of the total cost you need to pay from your pocket during the visit. Once you have paid the deductible fully, you are now eligible to share your bill’s total cost with your insurance. For instance, if the visitor’s total cost is $300 and your insurer levies a 25% co-insurance fee, you will need to pay $75 co-insurance while the insurance pays the remaining $225. Deductibles apply to doctor consultation fees and prescription drugs only, while co-insurance applies to the invoice’s total cost.
- Reimbursement Levels: Pet insurance agencies use the reimbursement-based model that allows you to visit any licensed veterinary clinic. Once you have sorted the bill, you need to submit the claims to the provider for reimbursement. Your reimbursement levels vary depending on your deductibles and policy. Most agencies offer reimbursement options ranging between 70% and 90% of the total cost. For instance, if your pet underwent a medical procedure that cost $3000 and your annual deductible is $1000, and an 80% reimbursement option, you will be responsible for the first $1000 deductible and $400 co-insurance. The provider will reimburse 80% of $2000, which translates to $1600. If you had already paid your deductible, the insurance will be responsible for $2400, and you will pay $800.
- Annual Limits: your pet insurance is capped at a specific amount per year. Insurance policies with high monthly premiums come with a higher annual coverage limit. Once you surpass the annual reimbursement limit, you will have to pay the bill yourself when your pet is unwell. For instance, if your annual limit is $15000, the insurance agency can only pay the bill up to but not exceeding $15000. You will be responsible for any extra costs above $15000
What does pet Insurance cover?
Different insurance agencies offer several options to pet owners. These coverages also come in different costs and terms. Some of the most common pet insurance plans include:
- Comprehensive pet plans: Covers medical expenses for a wide range of pet problems such as illnesses, accidents, surgeries, diagnostic tests, treatments, and vaccinations.
- Accident and illness plans: Covers veterinary costs for illnesses, hospitalization, emergencies, prescription drugs, and unexpected occurrences. Unexpected incidents include accidents, ligament sprains, and poisonings. Common illnesses covered under this plan include infections. Depending on your provider, it can also cover diagnostic tests.
- Accident only plans: This policy offers coverage to medical expenses arising from accidents only, such as poisonings, injuries, and swallowing objects. Some policies limit the number of claims on accidents, while others have no limit. Be sure to ask your agency if it is not indicated in your policy. It does not cover illnesses nor prescription drugs.
- Wellness plans: This coverage caters to medical bills for your pet’s wellness tests and examinations. They include flea prevention, heartworm prevention, and vaccinations. Some providers do not sell wellness policies alone. They require you to buy healthcare coverage first.
Most insurance agencies require a medical examination of your pet to determine any pre-existing conditions. The provider may not pay for incidences related to pre-existing conditions. Pre-existing condition refers to a health issue that your pet may have before enrolling for a healthcare coverage plan. Some examples of pre-existing conditions may include allergies, asthma, and cardiac problems.
How are pet insurance costs determined?
Several factors determine pet insurance costs. Some of the factors include:
- Pet size: includes the weight and height of the pet.
- Breed: mixed breed or purebred. Breeds that are more susceptible to diseases have higher premiums.
- Age: It’s often compared to life expectancy. Monthly premiums are lower for young pets compared to older ones.
- Location: Veterinary costs vary depending on the city. Some towns are more expensive than other places.
- Terms of the policy: Insurance agencies only cover what is listed in the policy. If your agency is willing to tailor your policy, you may have to incur more costs. Some of the standard pet insurance plans include comprehensive illness, accident, and wellness plans.
- Length of the policy: Most providers require that you renew your policy annually.
- Type of pet: monthly premiums for dogs are higher compared to cats.
What to look for in pet insurance?
You need to understand the terms before purchasing a pet insurance policy, as they vary depending on the agency. Here is what you need to look out for.
- Enrollment: Some providers have a minimum and maximum enrollment age for pets in the policy. For pets and puppies, the average minimum age is between 6 and 10 weeks, while the average maximum age is 10-14 years. Other providers require your pet to undergo a medical examination before they are enrolled.
- Types of coverages: You need to understand which coverage is best for your pet or suits your financial situation. Agencies do not prefer some treatments such as chiropractic care and acupuncture. Be sure to inquire from your provider if the policy covers alternative, behavioral and continual treatment.
- Payouts: Payout limits are also referred to as reimbursement limits. An insurer needs to indicate the payout limit. They may be capped annually, lifetime, or on a specific condition.
- Deductibles and reimbursement levels: You need to understand whether the deductibles are applied annually. If you have multiple pets under the same policy, look for if the deductibles apply per individual pet or as a group. Reimbursement levels vary significantly. Ensure you have read clearly and understood the terms and levels of reimbursement.
- Waiting periods: The average waiting period for most agencies is 14 days, while others have no waiting period. If your pet falls ill before the waiting period is over, your policy cannot cater to the medical costs. Some conditions, such as orthopedic problems related to a pre-existing condition, may require a more extended waiting period of up to a year.
- Prices: A pet insurance policy is meant to protect you from incurring huge medical bills when your pet requires medical care. Prices vary depending on your type of agency, coverage, location, and pet. Also, you need to inquire if there are any hidden costs that are not captured in the policy.
- Exclusions: Most insurance policies do not capture some services such as pre-existing conditions. If you still want them included, you can ask your agency to tailor the policy at an extra cost.
When should you get pet insurance?
There is no doubt that most pet owners are responsible and work tirelessly to ensure their pets are in good health and safe. However, no matter how well prepared you may be, an emergency incident may strike your pet, forcing you to make unplanned visits to the veterinarian and paying huge bills. A pet insurance plan protects you from expensive medical bills when your pet is unwell.
The best time to buy an insurance policy for your pet is when it is still young and has not started developing other lifetime conditions. Although you can still enroll an older pet, some insurance providers have set up a maximum age limit for enrollment. If your pet develops certain conditions when you don’t have a policy, your provider may not cover the pre-existing conditions.
During the summer and winter seasons, your pet is more predisposed to diseases because of the weather conditions and other hazards.
It is important to cover your pets always and ensure they are safe when an unexpected incident occurs. This will help you save your money and give you peace of mind if an incident occurs.
Choosing the Best Pet Insurance Plan
The recent developments in the veterinary industry have helped pets enjoy a longer lifespan. Before you select an insurance plan, here is what to look for:
- Compare Insurance agencies: This will help you understand which provider is offering the type of policy you are looking for. You can compare the premiums, deductibles, plan terms, reimbursement, and co-payments.
- Check the agency’s track record: This will help you understand if the provider is reliable. You can read the reviews to get an in-depth understanding of the track record.
- Understand your financial situation: Your policy is valid only when you make your premium payments in time. While you want the best for your pet, you need to be sure that you can afford the plan without having to break your account. You can also call the agency to ask if they have discounts. Some agencies provide a discount of up to 10% to pet owners with two or more pets.