Pet insurance for your dog – Top 3 things to know

The following guest post was written by Francois de Lame, Co-Founder at Policy Genius, a pet insurance comparison site. 

If you’re a dog owner, you’ve probably worried about costly vet bills (or already faced them). According to the American Pet Products Association, US pet owners spent more than $14 billion on veterinary care in 2013. That trend is likely to continue, given the growing interest of owners in their pet’s health care and quality of life.

bulldog puppy getting paw bandage at vet

Despite the increasing cost of veterinary care, most pet owners don’t have pet health insurance for their pets. Only about 1% of pets in the US are covered (compared to about 20% of pets in the UK, for example). And that’s a shame, because pet insurance can help cover vet bills, especially large and unexpected bills for emergency treatment and lifesaving care. If you haven’t shopped for pet insurance recently, you should do so because you’re in for a pleasant surprise. Today’s pet insurance plans are easier to understand and provide more comprehensive coverage than the old offerings from 10-plus years ago. And the average plan costs less than a month’s supply of bully sticks.

To help you find the best pet insurance policy for your dog, here are the top 3 things to know.

1. Know the difference between the 2 types of pet insurance plans

Pet insurance comes in two flavors: accident plans and comprehensive plans.

Accident plans help cover the cost of veterinary treatments if your dog has an accident – like breaking a leg or swallowing a corn cob (one of the most common reasons for a trip to the animal hospital ER). But if your dog needs treatment for an illness – like skin allergies, kidney failure or cancer, those costs wouldn’t be covered on an accident plan.

For accident plus illness coverage, you need a comprehensive plan. Most people who buy pet insurance opt for a comprehensive plan (over 95% of insured pets are on a plan that cover accidents and illnesses). But if you’re on a tight budget, an accident plan is better than no coverage at all and the average cost for a dog is around $13 per month (compared to around $38 per month for an accident plus illness comprehensive plan).

You might also see “wellness” plans (like the one PetSmart sells). This isn’t pet insurance! These are membership discount plans, where you have to stick to a certain vet to get access to discounted services.

Pet insurance plans comparisonImage source: 

2. You can create a pet insurance policy that fits your budget

An important difference between pet insurance and human health insurance is that pet insurance reimburses you, not the vet. When you take your dog to the vet, you pay the bill up front and then submit that bill as a claim for reimbursement. For an eligible claim, there are two features that factor into your reimbursement: the deductible and the reimbursement rate.

The deductible works like any other deductible you’re familiar with: it’s the amount you’re responsible for paying before the insurance kicks in. For example, if you have a $250 deductible, you’re responsible for covering the first $250 of expenses. After that, the reimbursement rate comes into play. That’s simply the percentage of eligible expenses you’ll be reimbursed. With most pet insurers, you can choose among a 70%, 80% or 90% reimbursement rate. For example, if you choose an 80% reimbursement rate, you would be reimbursed 80% of the eligible expenses (after you’ve met the deductible). The higher the reimbursement rate you choose, the higher the monthly cost of the plan.

When you take your dog to the vet, you pay the bill up front and then submit that bill as a claim for reimbursement.

It’s important to remember that there’s no “right answer” when it comes to the deductible and the reimbursement rate. Just decide on the right tradeoff between the cost now (your monthly premium) and the cost if your pet needs vet care (the deductible and reimbursement). Toggle the options until you find the right option for your budget. Quick tip: the PolicyGenius Pet Insurance Quote Navigator can help you understand the main policy features and compare top insurers online.

3. Familiarize yourself with the common exclusions from pet insurance coverage

Insurance never covers everything – and pet insurance is no exception. But if you know how exclusions work, you’ll get much better value out of your pet insurance policy and be a smarter manager of your dog’s health care. Here are the two major categories that are excluded from pet insurance:

  • Pre-existing conditions – any health issue that your dog has experienced before the pet insurance policy starts would be classified as a pre-existing condition. Expenses to treat pre-existing conditions aren’t covered by pet insurance (just like car insurance wouldn’t cover a car accident that happened while you were uninsured). There are a couple ways that pet insurers screen for pre-existing conditions: the first is they may review your dog’s vet records when you make your first claim. The second is the waiting period. After you buy a pet insurance policy, there is a waiting period of 14-30 days (depending on the insurer) before illnesses are covered. This is to prevent the case where someone notices a dog’s symptoms, buys pet insurance online, then immediately takes their dog to the vet. However, the waiting period for accident coverage is shorter, and can range from 0 days (immediate coverage) to 15 days.

dog getting blood drawn at vet emergency

But remember that pet insurance will still cover any new health conditions your dog experiences. (And anyone who’s been a dog owner long enough will know that there’s usually more than one reason for unplanned vet visits over the course of a dog’s life). And most comprehensive pet insurance plans will cover congenital and hereditary conditions – which are conditions a dog may be born with but don’t show up until later in life (like hip dysplasia).

  • Wellness and routine care – Treatments meant to prevent illness and keep your dog healthy – like spaying and neutering, vaccinations, flea & tick control and heartworm medication – are usually excluded from pet insurance unless you add on wellness coverage (for an additional monthly cost). That’s because pet insurance is designed to cover unexpected vet bills from an accident or illness. Routine care and wellness are predictable costs, ones that you can budget for as a dog owner.

Whatever pet insurance plan you decide on, make sure you read the policy thoroughly to understand what’s covered and what’s not. Other questions about pet insurance? Please leave them in the comments below!

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