Unexpected veterinary treatment can cost hundreds, and sometimes 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 falls under the Property and Casualty insurance classification and functions as indemnity insurance. Home and auto insurance are examples of this type of coverage.
In North America, the scope of pet insurance 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 proactive and useful financial tool that:
- Protects you and your finances against unforeseen veterinary costs
- Allows veterinarians to provide your pet with optimal care, employing the most advanced veterinary medical treatments
- Helps pet parents avoid economic euthanasia – when pet parents have to make the difficult choice to put down a treatable dog or cat – mainly because they can’t afford the pet’s required medical care
- Helps owners avoid the need to set ‘financial limits’ on the value of a pet’s life
- Provides pet owners with confidence: not having to hesitate before taking a pet for veterinary treatment, or waiting it out to see if their medical condition worsens before consulting a vet
- Provides pet parents with peace of mind, knowing that no matter what happens (loss of job, other financial crises) the financial resources are in place should a beloved pet become ill, or be injured
- Helps pet owners avoid going deep into debt by using other financial means to pay for pet medical expenses – such as high-interest credit or loans
- Ultimately helps pets to live longer, healthier lives
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:
- Accident & Illness (sometimes with embedded wellness coverage): This is more comprehensive coverage for veterinary treatment for unexpected injuries, sickness, disease and any changes to your pet’s normal healthy state.
- Accident Only: Coverage to treat accident-related medical care.
- Wellness: Coverage which may include vaccinations, tests, and dental work. This type of protection is also sometimes called “Routine” or “Preventative” care. Some Accident & IlIness plans my incorporate some form of Wellness coverage, such as dental benefits.
On top of Accident, Illness and Wellness coverage, some pet insurance products offer additional Benefits. These of course vary from plan to plan and from one insurance provider to another.
Today, some pet insurance plans may include special and innovative 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
- Membership for the pet-owner in an online community
- And more.
Choosing Coverage
There are a number of things you should consider before selecting coverage:
Your Pet’s Species
Dogs and cats are the most commonly covered companion animals around the world. In North America, 85% of all of the policies currently in force cover dogs, while the remaining 15% cover cats. In other countries – and in less than a percent of U.S. policies – ‘exotic’ pets such as birds, reptiles, rabbits and ferrets are also covered.
Your Pet’s Breed
Some breeds are naturally predisposed (more likely) to develop certain medical conditions. It is important to know and consider 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 pet’s breed. This information will help you to determine the level of coverage “limits” (or benefits) that you will require. You may be surprised at the fees associated with certain conditions – which is all the more reason to ensure you have pet health insurance in place.
What Is Not Covered?
Certain items are excluded from the most typical type of pet insurance coverage, or Accident and Illness policies. The most common ones are listed below. However, this is not an exhaustive list and will vary from one company to another. You should always be familiar with the terms of 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 exclusion also applies if you change your insurance provider, whether or not a claim was ever made. Your pet insurance policy will list any exclusions that your pet will not be covered for.
- Anything related to pregnancy and/or birth
- The purchase price of your pet if your pet dies after a certain age, typically nine years, is likely to be excluded
- Most Wellness coverage (routine, preventive or planned treatments, such as flea, worm and tick treatments, vaccinations, grooming, claw clipping, dental maintenance, spaying and neutering) – unless your plan has incorporated some wellness benefits
Waiting Period
All policies have a medical exclusion period from the start of the policy that is referred to as a “waiting period,” which can range from about 10 to 30 days. This means that coverage isn’t in effect until the waiting period ends, and that Claims against the coverage can only be made for conditions or that begin to show symptoms or accidents that occur 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
As with all types of insurance, you really do get what you pay for. As a rule of thumb, the more comprehensive the coverage, and higher the benefits, the higher your associated premium will be.
Where You Live Affects Your Options
The laws and regulations that govern pet insurance vary from one jurisdiction or another. So, where you live actually defines the type of coverage you can buy and the terms and conditions that apply to it.
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. Keep in mind that many companies will allow you to ‘downgrade’ your coverage, but upgrading is not usually allowed for.
As with human health insurance, if you decide you want to change your insurance after a medical condition has occurred, that condition will 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(s) will be professionally 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 amount and type of insurance available for chronic conditions varies among pet insurance plans, so be sure to ask your provider about any policy terms or limits that may apply. If your pet has a chronic illness—or develops one —you’ll know in advance 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 sometimes available.
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. For example, in urban markets, the cost of veterinary treatment and the costs associating with running a veterinary practice (overheads) are typically higher than in rural areas, so expect your premiums to 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. Some breeds are also pre-disposed to more conditions that others. This is why we recommend that you ask your veterinarian about some of the conditions your pet may develop in their lifetime. It helps you to understand the veterinary expenses you could incur and the type of coverage you may need to fully protect your pet.
Impact of Age on Coverability
Most policies will not cover pets less than eight weeks of age. However, as your pet ages, pet insurance will likely become more expensive, or even 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 can typically continue on 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 will also increase because, like in humans, their risk of illness increases. However, the impact of your pet’s age on the cost of coverage can vary quite a bit across pet insurance providers and plans, so it is important to consider this before choosing your coverage.
Remember…
- Make a list of what’s most important to you and rate these considerations in order of priority
- 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.
- Talk to these providers in person (or via email) and be sure to have all your questions answered. Their level of service and care may be an important consideration in choosing the best ‘fit’ for you and your pet.
- 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.
Stay informed. You’ll receive updated policy documents, emails and important notices from your provider. Being familiar with your coverage terms and conditions (or T’s & C’s) will empower you to make better decisions when your pet does become ill or injured. Reading about them when you’re also dealing with the emotional stress of a sick pet is never ideal.