8 Things to Know Before You Buy Pet Insurance

1. Pet insurance works differently than health insurance

One of the biggest misconceptions about pet insurance is that it works like human health insurance, says Sammi-Jo Nevin, president of NAPHIA and chief legal officer of Independence American Insurance Company, a pet insurance underwriter. “When you as a person go to the doctor … all the reimbursement between the provider and the insurance carrier happens in the background,” Nevin explains. “When a pet parent goes to the vet, they pay their bill up front and then submit it to the pet insurer on the back end to get reimbursed.”

That makes pet insurance more like property or casualty insurance than health insurance, says Megan Skretkowicz, claims adjuster manager at Embrace Pet Insurance.

2. Preexisting conditions aren’t always covered

Unlike health insurance for humans, pet insurance doesn’t cover preexisting conditions in many instances. “The ideal time to purchase pet insurance is when a pet is young, newly adopted and healthy. Waiting until a pet becomes sick or injured is problematic because any symptoms or diagnoses that occur before enrollment … are considered preexisting and will not be covered,” explains Skretkowicz, though she adds that old or ill pets might still benefit from having insurance. “While their prior medical issues will not be eligible for coverage, insurance can still be valuable for new, unrelated conditions or accidents.”

Even if you think your pet is healthy, it’s a good idea to investigate preexisting conditions before you purchase coverage. Before buying pet insurance, Richardson says to ask the insurer to do a medical record review to identify any conditions they would consider preexisting.

3. There’s a waiting period

Coverage typically doesn’t begin until days or weeks after you secure your policy, explains Richardson, who notes that illnesses, accidents and symptoms developed during that initial waiting period count as preexisting conditions. “I’ve seen owners seek care during the first few days of a policy,” she says, “only to have the claim denied because they were still within the provider’s standard 14-day window.”

4. There are two types of coverage

Pet parents can choose coverage either for accidents only or for accidents and illnesses. “Accident-only plans are ideal for pets with numerous preexisting illnesses or for owners seeking low-cost protection against major unexpected events, such as fractures, foreign body ingestion or lacerations,” Skretkowicz says. “Accident-and-illness plans offer the broadest coverage and are best for pets without significant preexisting conditions.”

5. Preventive care is extra

Many pet insurers offer optional wellness add-ons that help pet parents pay for preventive care, says Skretkowicz, who likens wellness add-ons to health savings accounts: You set money aside now to cover predictable expenses like vaccines, exams and parasite prevention later.

Adds Richardson, “Wellness plans are primarily a budgeting tool, but they are incredibly valuable.… When the cost of the annual exam is spread out, or ‘prepaid,’ owners are much more likely to stay current on preventative care. Proactive preventative care is the key to finding and addressing underlying illness before something becomes clinically apparent, which gives us the best chance at reversing or managing that disease process.”

6. Some pets are especially good candidates for insurance

Richardson recommends pet insurance for all pets, regardless of breed. “With that said, it is even more important for breeds predisposed to expensive issues, such as French bulldogs or golden retrievers,” she says. Location might also be a factor for pet parents considering insurance, she adds: “For city dogs in high-traffic environments, the risk of accidents can be higher.”

7. Costs can vary widely

For dogs, average annual premiums in the United States are $749.29 for accident-and-illness policies and $193.29 for accident-only policies, according to NAPHIA. Average annual premiums are lower for cats, at $386.47 for accident-and-illness policies and $110.03 for accident-only policies.

Premiums can vary based on age, breed, location and coverage level. “As veterinary medicine advances and offers more specialized surgeries, oncology, imaging and emergency care, the cost of treatment has risen. Pet insurance premiums have increased accordingly,” reports Skretkowicz, who recommends judging policies based not only on premiums, but also on annual and per-condition deductibles, annual payout limits and coverage caps for specific conditions. “For example, per-condition deductibles can become costly if a pet develops multiple unrelated issues, while low annual limits may be quickly exhausted during a single emergency hospitalization.”

Pay attention to coinsurance, too. For example, if you have an 80/20 coinsurance plan with a $500 deductible and a $1,000 vet bill, you will have to pay the first $500. The remaining $500 will be split between you and your insurer, with the insurer paying 80 percent and you paying the final 20 percent — $400 and $100, respectively.

8. If you can’t afford insurance, don’t fret

You may be able to make pet insurance more affordable by adjusting the deductible you’re willing to pay. “Higher deductibles allow for lower monthly premiums, but pet parents need to be aware that they will be responsible for that at the time of service,” Jaynes says.

If insurance is still too costly, there are other options. “Evaluate your own personal budget and be candid about your finances with your veterinarian, who can work with you to come up with options for your pet’s care that work best for your finances,” Jaynes continues. “Outside of insurance plans, we’d encourage pet parents to ask for options … like payment plans or low-cost clinics in their community.”