What is Pet Insurance?

Written by Robert Ferry on May 2, 2022
What is Pet Insurance?

People fond of keeping pets at home know how expensive it is to raise them, particularly when they fall sick and need medication or even vaccination. Veterinary care is not cheap, so people prefer to have a financial safeguard protecting them from unexpected expenses. Having a financial net that protects the safety of your pets is crucial to your financial standing.

Sometimes people have to face a dilemma in choosing to spend money taking care of their pets at the expense of their financial conditions that may deteriorate anytime. Hence, it is essential to keep your financial conditions separate from the pets sot that you do not need to choose between them.

Owning a pet always brings some concerns, like how a person would be able to afford the veterinary bills, which are an added expense to their financial situation. That is where pet insurance comes into play, protecting the person from paying the bill's total cost. In life, anything can happen to your dog or cat, as getting an injury is not difficult. Like humans, pets can also get sick and need care, medication, and even vaccinations that are not cheap.

Pet insurance works on paying any unexpected medical bills and ensures that the person can provide the best medical services to their pet. However, these medical services may vary from one pet insurance provider to another, and it also depends on the policy the person has opted for their pet.

This guide will discuss the basics of pet insurance so that our new readers can understand how to provide safety for their pets. We will highlight pet insurance factors and those not covered under pet insurance. The article will pen down about the operational mechanism of pet insurance. We will also cover the best pet insurance plans.

Let us talk about the fundamentals of pet insurance.

What is Pet Insurance?

Pet insurance is a health insurance policy that people buy to cover their medical bills such as medications, vaccinations, and check-up fees. The best thing about pet insurance plans is that they are reimbursement-based, which means whatever you will pay will be returned to you. For instance, an individual will pay up-front to the veterinary doctor the bills their pet will incur in the future, and they will then file a claim to the insurance company to cover the cost.

However, some pet insurance companies directly deal with the veterinary doctors and pay them the amount, thus keeping the person out of pocket payment as low as possible. The companies do charge a deductible fee before initiating the coverage of particular pet insurance. For instance, the person would have to pay the first $1000 to the veterinary doctor for the bills of their pet, and after that amount is crossed, the company will start the insurance coverage.

After the deductible fee period ends, the company will not provide 100% pet insurance coverage. The person can choose from different insurance plans that enlist the coverage proportion for the pet insurance. At the same time, people can choose the reimbursement level they require on their pet insurance. There are several reimbursement levels that the person could choose from, ranging from 60% to 90%, which accounts for the coverage of the medical bills for the pet.

Most pet insurance companies cover the costs for specific animals, primarily consisting of dogs and cats. However, some pet insurance companies extend their insurance policies to other animals, including birds and reptiles. But the proportion of companies that offer pet insurance to birds and reptiles is less than1% in the USA industry.

As per NAPHIA (North American Pet Health Insurance Association), pet insurance companies should reach out to pet owners who have a cat or dog and might need insurance. But some companies do provide some coverage to birds and reptiles.

Pet insurance is different from life insurance that people buy for themselves. The companies that provide such insurance policies are also different, and hence, the coverage will also be separated. For example, the coverage will consist of vaccines, parasite prevention, dental cleaning, etc., specifically for pet insurance only with pet insurance.

Pet insurance is specific to any unexpected costs that the person has to cover for their pets, so it is not meant for the day-to-day care of your pets that comes under the routine expenses. So if you are looking to pamper your pet with regular care, pet insurance will not be obliged to cover that.

Let us discuss who is eligible to be included in the pet insurance policies.

Who's Eligible for Pet Insurance?

Pet insurance is only for selective animals globally, but some companies follow a different organization that provides insurance to other animals. Under NAPHIA, only cats and dogs are eligible to be qualified for pet insurance. However, other organizations like ASPCA that cater to pet insurance extend the category to horses as some people are fond of raising them.

Moreover, organizations like Nationwide and Bivvy provide insurance to animals like birds, reptiles such as snakes, rabbits, and animals in the exotic category.

The insurance companies have different terms and conditions, such as at what age the pet can be insured. Different companies have various age limits that follow particular pet insurance. So if you have a new pet that you wish to get insured, you need to check with your pet insurance provider if your pet qualifies for the insurance. For example, your pet must at least be 6 to 10 weeks old to qualify for pet insurance for puppies and kittens you look to get insured.

However, your insurer might have different terms, so you should check with them and other insurance providers to see the general age requirement. Different insurance companies have various types of insurance plans. While some plans require an age limit, there are plans offered by the companies that do not condone a maximum age limit for the pet. Some companies choose to restrict coverage on pets that have an older age. Different companies have various pet insurance policies that talk about age restrictions. Insurers generally consider the age gap between 8 to 14 as older pets to be the age limit.

When your pet is accepted into a pet insurance plan, the company will offer coverage as long as the owner pays the required premium. Although each insurance plan has its terms and conditions, most insurance plans cover the pet's life. Some insurance providers will ask you to get your pet checked by a veterinary doctor or have them run a medical exam on the pet. This is considered an essential step before being accepted into the insurance plan.

Let us discuss the costs and procedures covered under the pet insurance policies.

What Does Pet Insurance Cover?

Pet insurance coverage depends on several factors that may differ from one company to another and the policy that the person has signed their pet for. But it is generally seen that most pet insurance companies provide policies meant for cats and dogs under an illness or met an accident. Such mainstream reasons would require immediate care and medications.

However, you can choose those particular pet insurance companies and policies that cover the preventive costs, such as an annual visit to the vet for check-ups or vaccinations. But finding the insurance company and the policy that offers such coverage would be challenging. They can also be insured if you have exotic animals, but you need to find the right company and policy.

Let us look at most insurance providers' main pet insurance plans.

Accident and Illness Insurance

This is known as the most common and basic time of pet insurance policy that people sign their pets up for to ensure that their treatment is fully covered. If your pet is injured or has suffered an accident, the insurance providers will ensure that they provide complete coverage for your pet. There are different plans that a person can sign up for under this policy. The plans cover the coverage amount you sign up for and agree to pay a premium based on that amount.

The coverage under this policy can include a diverse set of activities that can include

  • Surgery for broken bones, hereditary conditions and congenital conditions, etc.
  • X-rays, ultrasounds, bloodwork, and other diagnostic procedures
  • Emergency care like flu, fever, etc.
  • Hospitalization for immediate care and observation
  • Treatment for illnesses like cancer or infections
  • Prescription medications to alleviate the pain and for recovery

Accident-Only Insurance

This is a very basic type of pet insurance that is also the cheapest pet insurance policy, among other options. Most people purchase this pet insurance to ensure that their pets are covered if they meet any accidents that may require immediate care. Under this policy, only accident-related problems are dealt with, like broken bones. If your pet needs surgery, the vet will cover that under this insurance policy.

Accidents can be of any type, such as the cat swallowing a toy that got stuck in the throat and requires emergent surgery. Hence, the premium the person would have to pay for this policy will also be low and cost-effective. However, the downside of this insurance policy is that it does not cover other areas, like if the pet is sick or is diagnosed with something, as that does not count as an accident. Moreover, if your dog is poisoned, which counts as an accident, the pet will be treated under this policy.

Wellness Insurance

As the name suggests, wellness policies are designed to look after the pet's welfare, particularly concerning routine issues. These routine check-ups can be about vaccinations and exams to monitor how the pet is doing, especially if the pet is diagnosed with some hereditary problem. Moreover, wellness policies will cover spaying and neutering and dental care as part of the insurance.

There are few pet insurance companies in the industry offering wellness insurance for your pets, covering the dental care and other preventative care enlisted under the policy. But there are other options available in the industry, like PetFirst, that offer a unique way to get the policy you desire. They will allow you to purchase riders, which could be catered as an insurance add-on that can enable the addition of preventive care to the policy.

Other pet insurance providers in the industry provide wellness plans that can be added to their existing policies. Adding a wellness plan will provide further care to your pet by ensuring that they are in good health and catering to their medical needs like heartworm treatment and other routine care.

Exotic Pet Insurance

The pet insurance industry mainly provides policies to cats and dogs as most people are fond of keeping them. But there has been a change in people's perception as they have also started keeping birds, reptiles, and other exotic animals. Recently, there have been frequent changes. People have inquired about purchasing pet insurance for animals like rabbits, snakes, frogs, lizards, goats, birds, and several other animals that you don't usually see as pets. There are very few select companies offering pet insurance for such exotic animals. So, it is challenging to find the right policy for them.

Other Pet Insurance Coverage Plans

Apart from the mainstream insurance policies, several other coverage plans vary from one company to another, but it is part of pet insurance. They include the following

Alternative and Rehabilitative Treatment

Some insurance companies have coverage plans that extend beyond the mainstream coverage, such as the need for the pet to have physical therapy. There is a wide range of alternative treatments that pets receive as part of their policy, including acupuncture and chiropractic care, depending on the policy you buy and the insurance provider. So, insurance providers either cover these treatments to some extent, do not cover it all, or cover the total costs.

The alternative treatment may vary on the pet, the policy, and the insurance provider as they list down the terms and conditions of the care they will be covering as part of the policy. People should ask their pet insurance company if the policy they bought covers alternative treatment and, if they do, to what extent it is covered and what treatments are covered under it.

Behavioral Therapies

Each pet has different nature in how it behaves and under which environment it will be at ease, and when it will show signs of aggression. If you have recently adopted a pet and are in the market to buy a policy, it is better to consult the vet and see if they recommend that your pet may need behavioral therapies. In that case, it is better to look for a policy that covers the cost of behavioral therapies.

Behavioral therapies are mainly needed for those pets that have shown or have displayed signs of aggression or compulsive behavior. So, you would need to find those companies, especially those plans that cover all the expenses related to behavioral therapies. Some companies would charge you extra to include such a plan in the policy, which may be costly.

Congenital or Hereditary Conditions

Congenital conditions are abnormalities that the pet is born with and can cause severe damage to them in the future in the form of complications. Hereditary conditions are related to the genes which their parents gave the animal. Hereditary conditions can only be passed down and cannot be given through infection or disease. If your pet suffers from either of them, you can apply for a policy covering the cost except that you were unaware of it, and the reports said nothing about it.

Pet insurance companies have covered the expense of such conditions as hip dysplasia or patellar luxation. If your pet suffers from such conditions but has not yet displayed any symptoms, then the pet insurance providers will grant you the policy to cover any costs you might incur for your pet in the future. Some plans may allow you the coverage, but it will be limited to a set proportion.

Let us discuss those factors, costs, and procedures the insurance companies do not entertain to be part of the insurance policies.

What Is Not Covered by Pet Insurance?

The previous section looked at the main expenses and plans covered under most pet insurance policies. We also looked at other non-basic plans that companies include under pet insurance. Here, we will look at those occasions where the insurance company will not cover the cost of specific procedures and treatments. They include the following

Pre-existing Conditions

As the name suggests, if your pet is diagnosed with an illness or has shown signs of a condition, then the insurance provider is at liberty to reject your application for pet insurance. However, under particular circumstances where the vet considers the condition curable, the insurance providers offer limited coverage.

The limited coverage will cover an appropriate percentage of the cost incurred for the treatment. If the cost of the treatment exceeds a certain percentage, then the person would have to bear that amount. For example, Embrace Pet Insurance has terms and conditions. Those terms state that if the pet has a curable condition and has shown no illustration of the condition in the past year as per the medical records issued by the vet, then the insurance will be granted.

Preventive or Elective Procedures

Most pet insurance companies do not cover the cost of preventive procedures, but some companies have introduced policies catering to some percentage of it. If there are any cosmetic surgeries you would like your pet to have, they will also not be covered by the insurance companies. The pet insurance providers ensure that they do not cover any expenses related to routine costs and procedures. These may include nail trimming, ear cropping, declawing, or tail docking unless the vet considers them a medical emergency.

Exam Fees

Although some pet insurance companies include exam fees to a set amount covered under coverage, companies exclude exam fees. The exclusion does not consider the factor if it's a medical emergency, an accident, or an illness-related visit to the vet. People have to pay the fee to the vet because it is the fee that the vet will take for looking at your pet. The fee is non-refundable and will not be reimbursed by some pet insurance companies, while others may reimburse you to some amount.

Grooming

Although it is necessary to groom your pet for a better physical appearance catering to their hygiene, the insurance providers do not cover that. People pamper their pets by taking them for spa, shampooing, etc., but it is not deemed necessary from the pet insurance provider's perspective.

Routine and Wellness Care

Routine and wellness care consist of vaccinations, spaying, neutering, and teeth cleaning, which the pet insurance companies do not cover under any plan. Still, they can be added on by paying an extra premium. These are considered optional insurance riders if the person wants to add it to their policy coverage by paying a little extra for it.

Breeding Costs

The insurance providers do not cover any costs related to breeding. All expenses linked to pregnancy and breeding are another exclusion that is not part of the policy, and no company includes this under any coverage but is given an option to add it at the cost of paying extra. However, if you feel it necessary to add it, it can be included as insurance riders.

Let us look at the way pet health insurance operates and what things to look at when signing a policy with the pet insurance company.

How Does Pet Health Insurance Work?

Once a person has obtained a pet insurance plan, they will have a deductible amount to pay to the vet for the bills for their pet. The person will keep on paying the bills until the coverage is initiated. Even after the coverage starts, the person will pay the bills to the vet and get a receipt back which will be sent to the insurance company to check. After the check-up, the company will transfer the said amount to your account as reimbursement.

The pet insurance company will keep doing that until the insurance limit has been reached. For instance, if the insurance limit was set at $5000 a year after this amount is maxed out, the insurance company will not be liable to send out any reimbursement. However, some pet insurance companies do not have a limit and consist of unlimited payouts. Still, it is specific to an insurance company and the policy the person has opted for.

There are certain limitations covered in the insurance plan document, which include the following

Exclusions

The policy you sign up for will have specific exclusions written in it that will show under which situation the company shall not cover the cost for the procedure. The previous section covered some standard exclusions that you can see in the insurance policy document. They may include grooming, breeding costs, certain pre-existing conditions, etc.

Waiting Periods

As the name suggests, the waiting period is when the insurance company won't reimburse you for any costs incurred during that interval. Typically waiting period initiates when the person purchases the policy. The waiting period for most companies is two weeks, after which the company is liable to pay you whatever legit expenses you carried out on your pet due to illness.

Veterinarian Restrictions

Although vet restrictions do not restrict pet insurance, the company would reimburse you back from any licensed vet. However, some companies would only reimburse you if you took your pet to specific vets in the city. Some pet insurance providers provide limited coverage to those vets that they are not familiar with, but the client took their pet. Under veterinarian restrictions, people also need to cater to geographical restrictions. The pet insurance company would not reimburse you if you took the pet to a vet that lives in Canada, Australia, etc.

Let us discuss the best pet insurance plans in the market.

Best Pet Insurance Plans

This section will cover some of the best pet insurance plans in the industry based on customer experience and satisfaction scores. Let's get started!

Embrace

Embrace pet insurance is considered best for superior benefits. People in the market specifically looking to buy insurance for their pets to enjoy such perks can surely benefit from its products and services. Moreover, people are attracted to Embrace because of the diverse options of coverage, reimbursements, and deductibles, which will help people buy the insurance they need within their prescribed budget plan.

The company offers the following features to its customers

  • Maximum Annual Coverage: Minimum of $5000 to a maximum of $30,000
  • Reimbursement Choices: 70% to 90% depending on the plan the person chooses
  • Deductible Choices: Minimum of $200 to a maximum of $1000

Pros

  • The company offers a diverse set range of options for annual coverage, reimbursement and deductibles from which the person can choose for their pet insurance plan
  • The company also offers a diminishing deductible which reduces the cost of deductibles by a set amount of $50 every year, and the person does not need to make any claim for it
  • The company covers the cost of the veterinarian's office visit fee if the pet is ill or it has met an accident and requires immediate care
  • Embrace offers a relatively shorter waiting period of two days for accident coverage insurance plans which means the company will cover the costs incurred after two days
  • People have a choice of including a wellness plan in their existing policy, allowing the person to modify their insurance
  • People can reach the pet health line of the company at any time as it operates around the clock and is meant to answer the queries of its clients and prospective customers

Cons

  • Embrace offers a relatively long waiting period of six months for coverage of orthopaedic conditions, which means the company will not be able to cover the costs incurred before that time has passed

Pets Best

Pets Best Insurance is considered excellent for choices of deductibles, and people have highly rated them for their customer services and their product offerings, which have satisfied them. The company is known for combining the great coverage it offers at a reasonable price which is affordable at the customer's end. Moreover, the company has a wide variety of deductibles from which a  person can choose and raise a claim, thus bringing about a great pet insurance plan.

The company offers the following features to its customers

  • Maximum Annual Coverage: Minimum of $5000 to a maximum of unlimited coverage
  • Reimbursement Choices: 70% to 90% depending on the plan the person chooses
  • Deductible Choices: Minimum of $50 to a maximum of $1000

Pros

  • The company offers a wide variety of deductible choices that the person can choose from and make an insurance plan that they see fits their budget
  • The company offers a relatively shorter waiting period of three days for accident coverage insurance plans which means the company will cover the costs incurred after three days
  • Pets Best agrees to pay your vet directly if the vet agrees to it, ensuring that you do not need to pay him and issue a claim for reimbursement, which smoothens the process
  • The company offers a 5% discount per pet to those clients who have bought insurance for multiple pets
  • The company has included the routine wellness plan in the insurance policy because of the rising demand of the clients, so you don't need to add any insurance rider for the wellness plan
  • People can reach the pet health line of the company at any time as it operates around the clock and is meant to answer the queries of its clients and prospective customers

Cons

  • Pets Best offers a relatively long waiting period of six months for coverage of cruciate ligament issues, which means the company will not be able to cover the costs incurred before that time has passed

ManyPets

ManyPets Insurance is considered best for the lowest out-of-pocket claims costs, which is something its customers have reviewed about them. The company is a new entrant in the pet insurance market and has promptly captured the people's attention by offering some unique and valuable coverage features. The company also offers competitive pricing on its products and services, which keeps the competition alive in the market. Moreover, people get to choose quality products from a variety of options.

The company offers the following features to its customers

  • Maximum Annual Coverage: Unlimited coverage
  • Reimbursement Choices: 80% to 100%, depending on the plan the person chooses
  • Deductible Choices: Minimum of $100 to a maximum of $500

Pros

  • The company offers a relatively shorter waiting period of one day for accident and illness coverage insurance plans if you are transferring from another insurer which means the company will cover the costs incurred after one day
  • There are some states where the residents can apply for 100% reimbursement and $0 deductibles, meaning no out-of-pocket costs for a claim
  • ManyPets agrees to cover all the costs for vet exams for occasions related to illness and accidents, ensuring that you do not need to pay him and issue a claim for reimbursement, which smoothens the process

Cons

  • The company's operations are only available in specific states, so residents of those states can apply for pet insurance plans
  • People cannot reach the pet health line of the company as they do not operate that service around the clock, and so the company cannot answer the queries of its clients and prospective customers 24/7
  • ManyPets do not cover pet behavioral therapy relative to other pet insurance companies, and the plans they offer

Figo

Figo pet insurance is considered excellent for a short waiting period for accident coverage. People who value a short waiting period and know their pet might meet an accident for which they would require the coverage from the company apply for Figo. The company is known to provide competitive pricing to ensure competition stays in the market. Moreover, the company help pet owners socialize with other pet-minded individuals, which is suitable for the pet and their owners as it helps them in specific ways.

The company offers the following features to its customers

  • Maximum Annual Coverage: Minimum of $5000, $10000 to a maximum of unlimited coverage
  • Reimbursement Choices: 70% to 100% depending on the plan the person chooses
  • Deductible Choices: Varies by pet age

Pros

  • The company offers a 100% reimbursement option which means if you spend any amount which is linked to a pet insurance plan, that will be returned to you after you file a claim for it
  • The company offers a relatively shorter waiting period of one day for accident coverage insurance plans which means the company will cover the costs incurred after one day
  • The company has included the routine wellness plan in the insurance policy because of the rising demand of the clients, so you don't need to add any insurance rider for the wellness plan
  • Figo also offers certain upgrades to the client's existing insurance policy to cover particular circumstances, including advertising and rewards for lost pets, vacation cancellation due to a pet emergency, and loss of a pet due to theft or straying
  • The company has also invested in technology where the Figo Pet Cloud can be used as an App to locate pet-friendly places, and you can also get connected with other pet owners and let your pet have certain activities like play-dates

Cons

  • If you need the company to cover for vet exam fee for incidents and illness coverage, then you have to pay above the premium costs to initiate the coverage plan, which is an added cost
  • Figo offers a relatively long waiting period of six months for coverage of knee injuries, which means the company will not be able to cover the costs incurred before that time has passed
  • Figo does not cover dental illnesses as part of the insurance policies that it offers, and to include them would mean extra expense at the customer's end
  • The company offers different deductible choices  which depend on pet age, and if your pet is of higher age, then you cannot be approved for lower deductibles
  • The company does cover the cost of food that was prescribed to treat bladder stones or crystals only, so all the other food costs will have to be paid by the pet owner

Conclusion

Through this guide, you will be able to understand the fundamentals of pet insurance. We have covered different segments that will give you the necessary knowledge if you wish to know about pet insurance. This article has listed different categories of animals on whom people can purchase pet insurance policies, safeguarding them and protecting them financially.

The article will provide you with the required knowledge of what is covered under pet insurance and what is not covered in pet insurance. A person needs to look at the companies offering such insurance policies, particularly if they are looking to insure their exotic animals. The insurance policies document everything covered and enlists those costs that the company will not cover.

The guide also covers some of the best pet insurance companies for which anyone could sign up. But we have covered the pet insurance companies according to the categories to make it easier to understand. So if you are in the market looking to get pet insurance specializing in a particular category, check out the segment that covers that portion. Knowing your needs and preferences is essential and then shortlist the best companies.

Before signing the pet insurance, it is crucial to read out the document that will discuss the policy you are buying and the premium you will have to pay for it. That will give you some insight into what you could expect from the company when the time comes that you need their assistance. The insurance policies will also note that the person has an option to include insurance riders if they feel it is necessary to include them as part of their policy.

Article written by Robert Ferry

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