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Pet Health Insurance 101
What Does it Cover?
There are three different levels of coverage when considering pet health insurance.
- Major Medical Plans - These plans account for over 98% of all pet health insurance plans purchased. Major medical plans cover everything except wellness care.
- Wellness Plans - Some companies allow you to add wellness coverage to a standard major medical plan. These plans cover expenses for routine care such as annual exams, heartworm meds, dental cleanings, etc.
- Accident Only Plan - These plans are less expensive than major medical plans, but only cover claims for accidents. We don't recommend these plans because illnesses are more likely and more expensive to treat.
Here is a list of health issues and treatments that are covered by the various pet insurance plans. You can combine major medical and wellness plans for comprehensive coverage.
|Type of Coverage||Major Medical
|Wellness and Routine Care||X||✓||X|
Pet health insurance does not cover pre-existing conditions. A pre-existing condition is any illness or injury that first occurred or showed signs prior to your policy starting. This is why it's so important to enroll in a plan while your pet is healthy.
Dig Deeper: What Does Pet Insurance Cover?
Learn More: Pet Insurance
Finding the Right Plan
There are 5 easy steps to finding the perfect pet insurance plan. We highly recommend that you follow these 5 steps so ensure that you find the right plan for your needs and goals.
Step #1 - Assess Your Needs
What are you trying to accomplish?
If you want to protect yourself from the cost of expensive, unexpected illnesses and injuries then pet insurance is for you.
If you're trying to find a way to pay for routine care then you can add a wellness plan to your coverage.
If you're looking to pay for a health issue your pet already has then pet insurance is not a good fit. That's because, as we mentioned earlier, no pet insurance companies cover pre-existing conditions.
Step #2 - Learn the Lingo
Here are the four most important coverage characteristics to keep an eye on when shopping for a pet insurance plan. As everyone with human health insurance will know, insurance terminology can be confusing, vague, and downright frustrating. How is a pet parent meant to choose the best policy when they need a translator?
Dig in to our handy pet insurance terms now, or use it as a reference point while exploring different policies. Here are some of the most important terms you should understand while shopping for coverage.
- Deductible - If you choose a higher deductible you will pay less. Conversely, if you choose a lower deductible you will get more back when you file a claim, but your monthly rates will be higher. Deductibles range from $100 to $1,000 (we recommend $200 or $500 to maximize value).
- Reimbursement Rate - If you choose a lower reimbursement rate you will pay less each month for a policy because the company will pay less when you claim. And, as common sense will tell you, if you choose a higher reimbursement rate you'll pay more each month. Reimbursement rates range from 60-100% of your actual vet bills (we recommend 80% or 90% reimbursement rates to maximize value).
- Annual Limit - This is one of the most important factors when choosing a plan. Make sure the policy has at least a $10,000 annual limit. This will ensure you have enough coverage for major health issues.
- Coverage - As previously mentioned, we recommend you select an accident & illness policy. Every company offers this type of policy as the default option. They are the most popular, highest rated and provide you the most coverage and best bang for your buck.
- Waiting Period - Every company has a waiting period, which is the time from the day you enroll to when your coverage period starts.
- Exclusions - The higher rated companies have very few exclusions (mostly just pre-existing conditions) but not every company is created equal. That is why you want to evaluate company ratings first before selecting a plan.
Step #3 - Your Pet's Breed
Every dog and cat is unique. Depending on your pet's breed there are health issues and conditions you should be prepared for. To make things easy for you we created complete breed profiles so you can understand what coverage is the best fit for your pet.
It's important to understand potential health issues so you can be prepared as a responsible pet parent. For example, Labrador Retrievers are susceptible to hip dysplasia, which is a very common hereditary disorder. These types of hereditary disorders are relatively common for purebred dogs and they are very expensive to treat.
The good news is that most health issues can be treated with modern veterinary medicine, but it isn't cheap.
Dog Breeds and Health Issues
Cat Breeds and Health Issues
Step #4 - Set a Budget
Taking care of any animal is an expensive responsibility. Especially dogs and cats! You might not have to save up for college or buy them a car on their 16th birthday, but food, boarding, toys and veterinary care can add up. As a responsible pet owner, it's important to set aside a budget for these expenses.
However, it's also important to set aside money or have a plan for unexpected expenses. One of the greatest benefits of pet insurance is that it prepares you for the unexpected. In fact, based on an internal poll of over 20,000 pet owners, here is the #1 reason people buy pet insurance...
"It allows me to make decisions about my pet's health without worrying about money."
Source: Pet Owner Survey
Step #5 - Compare Plans
When it comes to animal insurance plans the process can seem daunting. With so many options where do you start?
And how can you know if you choose the right company and the right plan?
The most important decision is to select a company that is highly rated. There are companies you will be thrilled to work with and companies that might leave you high and dry when it comes time to file a claim.
This handy pet insurance comparison chart allows you to see complete rankings of all 12 American pet insurance companies side-by-side.
Helpful Tip: How to Choose and Buy Pet Insurance Online
How Much Does it Cost?
You may read arguments online that it's better to create an "emergency fund" for unexpected veterinary expenses. That solution is better than doing nothing, but as you saw with the example of a Labrador Retriever, if your pet needs expensive veterinary care an emergency fund isn't going to cover it.
So, when it comes to setting a budget for a pet insurance policy, decide what you would be comfortable paying each month and then find a plan that meets your goals AND fits within your budget. This way you can pay your monthly premium without worrying about something happening down the road.
There are 5 factors that influence the cost of pet health insurance:
- Where you live
- Type of Pet You Have
- Your Pet's Age
- Coverage Selected
- Company You Choose
Some companies also offer discounts for microchips and multiple pets as well. Each company rates pet's differently based on breed and age, so it's important to compare quotes to ensure you get the best price possible.
For example, Healthy Paws is much cheaper for Labrador retrievers than Embrace, so if you don't compare quotes you might be overpaying for the same level of coverage.
Dip Deeper: Pet Insurance Cost
Facts & Figures
Do you need pet health insurance?
Sadly, veterinary emergencies are more common and more expensive than you might think. That is why animal insurance is so important. In fact, treatment for curable diseases such as hip dysplasia, diabetes and cancer can cost over $10,000.
Here are some facts about veterinary care here in the U.S. to provide some additional perspective.
- Annual veterinary expenses in the U.S. exceeded $15 billion in 2015
- A pet receives emergency medical care every 2 ½ seconds
- Every 6 seconds a pet owner is faced with a vet bill of more than $5,000
- Two out of every three pets will experience a significant health problem during their lifetime
From a pet owner: “For me, personally, I can't think of my dog that way. I just can't. He's not an object. He's a living, breathing creature and he matters to me. I'm not saying I would go bankrupt for him. But paying $25 a month for the assurance that a large vet bill isn't going to force me to euthanize my best buddy... That seems like a good deal to me.”
More Stories: Veterinarian Testimonials
Dig Deeper: Is Pet Insurance Worth It?
Enrolling in a Plan
Every pet insurance company requires that your pet has a standard veterinary exam withing 12 months prior to enrollment. This way they can determine if there are any pre-existing conditions. It's standard operating procedure.
Coverage will start after your waiting period expires. This varies by company, but the average waiting period is two weeks from the day you sign up and pay.
After you enroll your pet is covered for life, so you don't have to worry about health issues year after year. Your premiums may increase each year as your pet ages, but the average price increase is only 5 to 10% per year, which is just like auto or home insurance.
More good news... you can use any licensed veterinary clinic with any pet insurance provider. There are no restrictions, so if you move, change vets or need to see a specialist you're covered.
Dig Deeper: Frequently Asked Questions
How Do I Get Paid?
Pet insurance companies reimburse you for veterinary care after you've already paid. Most pet insurance companies will send you a check or direct deposit 5-10 days after you submit a claim. And in some circumstances if you have a planned surgery or treatment your pet insurer might pre-pay directly to the veterinary clinic or specialist.
The reason pet insurance providers reimburse is so that you can use any licensed vet without any restrictions.
Dig Deeper: How Pet Insurance Claims Work
Your pet is part of the family. And when it comes to family we know you want the best. That's what pet health insurance is all about.
Don't wait until it's too late!
Once you do your research it's time to pull the trigger and enroll in a plan. It's so important to purchase a plan while your pet is healthy to avoid pre-existing conditions exclusions.
So don't wait, get free quotes and enroll in a plan today!
Edited by: Nick Braun
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