Pet Health Insurance Buying Guide

Unexpected veterinary treatment can cost hundreds and even thousands of dollars. It’s no wonder that  when illness or injury strikes, many pet owners struggle with how to pay for their pet’s medical care.

Because pets are legally considered to be the property of their owners, pet insurance is similar to car or homeowners insurance. It falls under the Property and Casualty insurance classification and functions as indemnity insurance.

In North America, the scope of coverage is slightly different than in other parts of the world. Here, it is commonly referred to as Pet Health Insurance (PHI).

What Is Pet Health Insurance?

Pet health insurance is a useful financial tool that:

  • Protects you and your finances against unforeseen veterinary costs
  • Allows veterinarians to provide your pet with optimal care and practice the most advanced veterinary medical treatments
  • Prevents vets from having to perform “economic euthanasia” when pet parents make the difficult choice to put down a dog or cat because they can’t afford care
  • Means you avoid the need to set a financial limit on the value of your pet’s life
  • Gives you confidence: you don’t have to hesitate before taking your pet for veterinary treatment, or wait to see if a medical condition worsens before consulting a vet
  • Provides you with peace of mind, knowing that no matter what happens (loss of job, other financial emergencies) you have financial resources should your pet become ill, or be injured
  • Helps your pet live a longer, healthier life

What Does Pet Health Insurance Cover?

Pet health insurance is a unique, specialized coverage designed to reimburse pet owners for unforeseen veterinary fees and related expenses. There are three main types of pet health insurance coverage:

  1. Accident: Coverage for veterinary treatment for unexpected injuries.
  2. Illness: Coverage to treat sickness, disease and any changes to your pet’s normal healthy state.
  3. Wellness: (also called Routine or Preventive Care) which may include vaccinations, tests, and dental work. This is also sometimes called “Routine” or “Preventative” care.

Additional Benefits

Benefits can vary from plan to plan and from one insurance provider to another. Some pet insurance plans may include special coverage such as:

  • The cost of emergency veterinary treatment for the insured pet when traveling out of the country of origin
  • Third party liability coverage if your dog injures someone or damages someone else’s property
  • The cost of advertising a reward for the return of a lost or stolen pet, and the cost of the reward itself, if the pet is found and recovered, (up to a pre-set amount)
  • The cost of looking after a pet if the policy-holder is hospitalized or requires emergency medical treatment
  • The cost of a holiday if it is cancelled because the policy-holder’s pet needs emergency surgery

What to Consider When Choosing Coverage?

Your Pet’s Species

Dogs and cats are the most commonly covered pets worldwide. Of all pet health insurance policies currently in force in North America, 85% are for dogs, while the remaining 15% are for cats. In other parts of the world, small pets such as birds, reptiles, rabbits and ferrets may be covered, but NAPHIA member companies currently cover only dogs and cats.

Your Pet’s Breed

Some breeds are predisposed (more likely) to develop certain medical conditions. Its important to know the risks associated with your breed before you choose the level of coverage you require. For example, some types of dogs are more likely to develop diabetes or cruciate ligament injuries.

Cost of Treatment

Ask your veterinary professional about the costs associated with treating some of the most common conditions for your breed. This will help you determine the level of coverage “limits” you require. You may be surprised at the fees associated with certain conditions—all the more reason to have pet health insurance in place.

What Is Not Covered?

Certain items are excluded from pet insurance policies. The most common ones are listed below. However, this is not an exhaustive list and you should check your policy.

  • Anything that relates in any way to your pet’s medical history before the policy started. This is known as a pre-existing medical condition. This also applies if you change your insurance provider, whether or not a claim was ever made.
  • Anything related to pregnancy and/or birth
  • Any routine, preventative or planned treatments, such as flea, worm and tick treatments, vaccinations, grooming, claw clipping, dental maintenance, spaying and castration
  • The purchase price of your pet if your pet dies after a certain age, typically nine years, is likely to be excluded

Waiting Period

Most policies have a medical exclusion period from the start of the policy, often called a “waiting period,” which ranges from 10 to 30 days. Claims can only be made for illnesses that begin to show symptoms after this date.

What Else Should You Know?

There When You Need It

Pet insurance is coverage that’s designed to be used. Unlike home and auto insurance—where you may go years without ever having to claim—it is very likely that over the course of its lifetime, your pet will become ill or injured and need medical care.

You Get What You Pay For

With pet health insurance you really do get what you pay for. The more comprehensive the coverage, and higher the benefits, the higher your associated premium will be.

Changing Your Coverage

When choosing a policy, it is important to check the type of product and the level of veterinary fees covered to ensure it will continue to meet your financial needs, now and in the future.

Like with human health insurance, if you decide you want to change your insurance after a medical condition has occurred, that condition will likely be excluded under any new insurance whether or not a claim was ever made. Remember, your pet’s medical history may be requested and your vet will be obliged to disclose your pet’s full medical records.

Coverage For Chronic Conditions

Chronic conditions are those illnesses or problems that are ongoing, such as diabetes or cancer. The type of insurance for chronic conditions varies among pet insurance plans, so be sure to ask your provider about policy terms or limits that may apply.  If your pet has this type of illness—or develops it—you’ll be glad you know what to expect.

Co-Pay or Co-Insurance

“Co-Pay” and “Co-Insurance” are terms that refer to a sum that the policyholder must pay towards the cost of their insurance claim. This amount can vary between plans and providers, so refer to your policy terms and conditions.

The most commonly offered (and selected) co-pay amount is 80%. This means that you are reimbursed for up to 80% of the amount you claim for. In North America, 90% and 100% co-pay levels are also common.

Premiums – the Cost of Your Coverage

The cost of pet insurance can vary according to a number of factors, including where you live, the breed of cat or dog, its gender and age. Veterinary charges influence the premiums you are charged. Generally in urban centers, the cost of veterinary treatment and overhead is higher than in rural areas, so premiums will reflect this.

Breeds

A purebred or pedigree dog or cat is normally more expensive to cover than mixed breeds. This is because mixed breeds are less likely to be predisposed to inherited medical conditions.

Minimum Age

Most policies will not cover pets less than eight weeks of age. When a pet gets older, pet insurance may become more difficult to secure as some companies will not offer new insurance to pets above a certain age. If you take out a policy when your pet is younger it can usually be continued with the same provider for the lifetime of your pet.

Effects of Aging on Coverage

As your pet ages, the premiums, deductibles and policy co-pays may also increase because, like humans, the risk of illness increases. However, the impact of your pet’s age on the cost of coverage varies across pet insurance providers and plans, so it is important to consider this before choosing your coverage.

Remember…

  • Shop around for the policy that best meets your needs.
  • Get a free, no-obligation quote from a few reputable providers and compare types and levels of coverage.
  • Always read your policy and insurance documents for details of the benefits and significant exclusions of the policy. Today most companies offer their policy document in plain English, rather than “legalese”. You can even review them in advance of enrollment.
  • Always answer the insurer’s questions honestly. Failing to do so is considered fraud and the insurer may refuse to pay your claim.
  • Your veterinarian is an ethical professional who may be able to help you understand the benefits of pet insurance coverage, and the costs of veterinary medical care today.