Pet Insurance or Pet Health Insurance helps cover the cost of medical expenses should your pet become ill or have an accident.
Some pet insurance companies also offer routine and wellness coverage which includes vaccinations, annual wellness examinations, speying/ neutering and heartworm testing/ medications for an additional fee.
What is the best way to use Pet Insurance?
Pet insurance is best used for unexpected, catastrophic medical events which are difficult to budget for.
Routine and wellness procedures are not always best handled with pet insurance. Sometimes the annual cost of adding routine and wellness care to your plan ends up being more than it would cost if you paid for these procedures out of your own pocket… so make sure you do the math before you buy.
It is possible you will pay more in premiums than you get back if your pet stay relatively healthy therefore pet insurance should be used as a risk management tool not as a way to save money.
How to select a Pet Insurance Plan
Selecting a pet insurance plan is an individual choice because each person has different needs depending on the pet’s breed, owner’s geographical location and the owner’s budget.
When choosing a pet insurance policy, make sure the pet insurance company you choose has the following attributes:
1. Has good medical coverage. To get the most comprehensive, you want to purchase a plan that covers accidents/injuries and illnesses.
2. The illness part of the coverage must include
a) Coverage for chronic disease. Chronic diseases are illnesses that have long duration and generally show slow progression. Examples include cancer, heart disease, chronic kidney disease and chronic liver disease.
b) Continual coverage for chronic disease. If you do not get this coverage, the chronic disease will only be covered in the policy year it was diagnosed, after that, you will have to pay for any continuing medications or diagnostic monitoring yourself. Treatment for most chronic disease will last beyond the first year of diagnosis.
c) Coverage for Hereditary and Congenital Diseases.
d) Coverage for Diseases that are common top your pet’s breed.
3. Has a good reputation. Research a pet insurance company’s reputation using:
4. Has a strong underwriter. The underwriter is the company that is financially responsible for paying your claim.
5. Has a maximum payout limit that will cover the ‘worst case scenario costs’ for your geographical location. The maximum payout limit is the maximum amount of money the insurance company will reimburse you. This payout limit can be annually, lifetime, per incident, per body system or based on a predetermined benefit schedule. You want to pick a maximum payout structure that will cover the ‘worst case scenario costs’ that could happen for you.
6. Has an affordable premium.
7. Pays claims in a timely fashion.
8. Does not have unreasonable exclusions and requirements. Exclusions are medical conditions that are not covered by the plan. Requirements are things you must do to remain insured (e.g. annual exams, animal must reside a place of residence listed on policy, submission of medical records, and adherence to the vaccination recommendations.) Exclusions and Requirements are written in the pet insurance company’s terms and conditions. It is important that you read this document before and after you buy so that there are no surprises.
What about Accident Only Policies?
As the name implies, ‘Accident Only’ policies cover accidents only. They do not cover medical costs caused by illnesses. ‘Accident Only’ policies tend to be much cheaper than comprehensive accident and illness policies because they do not cover costly illnesses. Also, as pet ages, the number of accident related injuries decreases in comparison to the number of illness related conditions.
In addition, what a pet owner considers to be an accident is not necessarily what a pet insurance company considers to be an accident. For example, some companies will not cover conditions like foreign body ingestion or cruciate injuries in their ‘Accident Only’ policies.
If you intend to buy an ‘Accident Only’ policy, make sure you know what you are getting for your money.
How does Pet Insurance Work?
Pet insurance is similar to human health insurance in that it:
Pet insurance differs from human insurance in that it is a reimbursement program. This means you pay the vet bill, and then you file the claim with the pet insurance company for reimbursement. It is very different from human medical insurance where the doctor files the claim and receives the payment directly from the insurance company. This means you will have to have some means to pay the veterinary bill while you wait for reimbursement from the pet insurance company.