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    How Does Pet Insurance Work? [Complete Guide]

    6 mins

    Pets are true friends that leave paw prints on your heart. After all, a house is never lonely when a loving pet awaits you! When your pet means the world to you, you want to preserve their precious health for as long as possible. 

    Costs associated with injury or illness for your pets can be thousands of dollars. As much as you love them, that price tag can make the decision to give your pet the care it needs really difficult. 

    Pet insurance can make a huge difference in how you approach healthcare for your furry friend. It allows you to select treatments for your pets based on what they actually need, rather than simply what you can afford at the moment.

    What Is Pet Insurance?

    Just like human health insurance, pet insurance policies help you to cover medical costs for your animals. Depending on the terms of your coverage, you may be able to visit the veterinarian of your choice to get care for your pet. 

    The Different Types of Pet Insurance

    Pet insurance is not a one-size-fits-all type of insurance plan. So how exactly does pet insurance work? There are different options to choose from, depending on your budget, and your pet’s specific needs. 

    Three common policy options include:

    1. Accident-Only Pet Insurance

    Accident-only pet insurance covers your pet for any accident-related injuries. For example, if your pet ingests a foreign object or toxin, gets hit by a car, or suffers from a torn ligament, most accident-only insurance plans will cover some or all of their medical care. 

    Treatment costs for toxin ingestion can easily reach up to $4,000 without coverage. If you’re hesitant about whether to get pet insurance or not, accident-only coverage may be a good option to start with. If anything happens to your pet unexpectedly, you won’t have to worry about spending thousands of dollars for their care.

    Typically, pre-existing conditions such as illnesses, congenital conditions, or chronic conditions are not covered by accident-only pet insurance. 

    2. Accident and Illness Pet Insurance

    Accident and illness pet insurance offers more comprehensive coverage for your pet so you can worry less about costly veterinary bills and focus more on the well-being of your animal. 

    Some conditions that are typically covered by accident and illness pet insurance include hypothyroidism, allergies, cancer, broken bones, and more. 

    Diagnostic testing such as X-rays, ultrasounds, lab tests, and CT scans are also typically covered under accident and illness plans. Without coverage, these types of tests for your pet can cost you thousands of dollars.

    3. Preventive Care and Other Add-Ons

    If you just got a new pup or kitten, you may want to sign them up for a preventive pet insurance plan to keep up with yearly check-ups, vaccines, and lab tests. If you start at a young age, coverage is fairly affordable and can help to set your pet up for a lifetime of health.

    Preventive pet care includes things like regular wellness visits to identify any health concerns early on, parasite screening, and more. Other proactive treatments included with preventive care are vaccination, flea and tick medication, heartworm prevention, and dental care.

    This type of plan encourages you to consistently get check-ups for your pets. With affordable monthly costs and fairly comprehensive coverage, it can be a great solution for pet owners who have younger, healthier animals.

    A cat laying down on a table at home next to a cup of tea

    How Does Pet Insurance Work?

    How does pet insurance work? Do all vets take pet insurance? Pet insurance works a little bit differently than regular health insurance. 

    When your pet gets care at the veterinary clinic, you must pay 100% of the bill upfront. You are then required to submit a claim to your insurance provider, either online or by fax or email, with the details of the visit. 

    Once your claim is approved, the insurance company reimburses you for any covered costs. Because costs are generally reimbursed, you should be able to use your pet insurance for any care provider.

    How Much Will You Be Reimbursed for Care?

    Your reimbursement will depend on several different factors. For instance, not all policies cover things like exam fees. Some policies require you to confirm that your pet has received certain vaccines and preventive treatments before they will cover the animal for certain illnesses or accidents.

    You should also take a look at the deductible that comes with your plan. 

    What is an annual deductible for pet insurance? It’s a predetermined amount you’ll need to pay for care costs before you are eligible to receive reimbursements from your insurance provider. 

    Some policies have a deductible for every accident, while others have a yearly deductible you’ll need to meet before reimbursements kick in. 

    The percentage of reimbursement you get after meeting your deductible depends on your plan, but it will typically range from 70% to 90% of your care costs. 


    If you sign up for a plan with a $150 annual deductible and 80% reimbursement for the cost of care:

    • Your veterinary bill amounts to $700 for covered care

    • You must pay $700 upfront directly to your vet

    • You must file a claim with your insurance provider

    • You will get back 80% of the total cost of covered care, minus the $150 deductible

    In this example, you would receive 80% of $550, which is $440 back out of the initial $700 bill.

    How Much Does Pet Insurance Cost?

    At this point, you might be wondering, “How much is pet insurance a month?” It’s pretty simple; the higher the reimbursement percentage is, the higher the monthly premium will likely be. 

    What does “premium” mean in pet insurance? It’s simply a fancy term to describe your monthly payment for pet insurance.

    Costs may also vary based on the age of your pet and any pre-existing conditions that they suffer from. In general, comprehensive policies will also cost more than accident-only plans.

    A small dog sitting on a couch

    How to Choose Pet Insurance 

    When you get a new pet, you may want to do some research on the genetics of their breed and how often they typically require care. Some breeds are known to have higher medical costs than others. 

    For example, golden retrievers are known to be susceptible to several orthopedic issues, while rottweilers may be at increased risk for epilepsy and bone disease. 

    The age of your pet is also a factor to take into account. Costs for care increase with age. If you’re working with a limited budget, you may want to have more thorough illness and accident coverage for an older pet.

    For young pets, preventive health insurance is an affordable option. It will cover the costs of their checkups and vaccines, and your vet will be able to track their overall health as they grow to become adults!

    Next Steps to Get Your Pet Covered

    If you’re looking to have your pet covered with pet health insurance, you can reach out to a specialized insurance agent licensed in your state. They will assess your pet’s needs based on their age and breed and help you choose the best plan for them.

    Kristina Dinabourgski
    Kristina Dinabourgski
    Has a passion for demystifying benefits 🎉
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