How Does Pet Insurance Work?

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Contributor, Benzinga
December 10, 2021

Pet insurance can help ease the costs of taking care of your furry friend's health, but might be asking yourself, "how does pet insurance work?". A comprehensive pet insurance plan can help you cover the costs of any emergency veterinary care your furry friend might need. The search for the right pet insurance begins by understanding what pet insurance typically covers and how it works. The average cost of an emergency veterinary visit is between $800 and $1,500, and if your pet needs emergency surgery, you could end up paying upwards of $2,000 for a trip to the veterinarian.

Use our guide to protect yourself from unexpected expenses and keep your best friend happy, healthy and safe.

Key Points: How Does Pet Insurance Work?


  • In short, pet insurance is coverage for your pet’s health care expenses that provides you a financial cushion against pet health care costs. Typically, getting and using pet insurance follows this basic process:
  • Get coverage from your chosen provider (many offer customizable policies or tiered coverage).
  • When you pet has a vet visit, you usually pay your vet up front and submit proof of purchase via your provider’s claim processor.
  • From there, your pet insurer will reimburse you for covered services.

Different insurers offer different types of coverage. Some provide policies for emergencies, accidents and illnesses, while others cover preventative care and wellness. Some providers have ages limits and annual maximums; others do not. And some offer comprehensive coverage that even includes holistic and alternative therapies.

What is Pet Insurance?

If you have another type of insurance besides health insurance, you’re probably already familiar with the basic process of how pet insurance works. When you enroll in a pet insurance policy, your insurance provider will offer you a contract that goes over everything that your policy covers. Some plans only cover emergency care needs, while others extend coverage to routine care and preventative treatments. Do not assume that your policy will cover every type of care your pet might need — read your policy and fully understand what types of pet health needs are and aren’t covered.

Pet insurance works similarly to homeowner’s insurance or auto insurance. When your pet has an emergency health need, you’ll take your pet to your veterinarian. At the veterinarian, your pet will receive treatment, and you will pay upfront for any type of services rendered. Be sure to receive a receipt from your veterinarian that details the types of services you and your pet received.

After getting a receipt for the services, you’ll send bills to your pet insurance company. Your pet insurance company will compare the services your veterinarian provided with the services that are covered under your policy and reimburse you for a portion of your care.

Most pet insurance plans also include portions of care that you’ll be responsible for paying. Before you sign onto coverage, be sure to look for these 3 common payment requirements and exclusions from benefits.

Common Pet Insurance Plans

Similar to our own health insurance, pet insurance provides different types of plans, each with its own benefits. First, let's go over the definitions and terms that will help you under the various parts of your pet insurance plan.

  • securely through Chewy Care Plus's website
    securely through Chewy Care Plus's website
    Best For:
    Annual Check Ups
  • securely through Wagmo's website
    securely through Wagmo's website
    Best For:
  • securely through Pumpkin Pet Insurance's website
    securely through Pumpkin Pet Insurance's website
    Best For:
    Families with multiple pets
    Read Review

    Limitations apply. For terms and conditions, visit Pumpkin Insurance Services Inc. (NPN#19084749) (“Pumpkin”) is a licensed insurance agency, not an insurer. Insurance plans underwritten by United States Fire Insurance Company. Preventive Essentials is not an insurance policy, and is not available in all states.

  • securely through Spot Pet Insurance's website
    securely through Spot Pet Insurance's website
    Best For:
    Prescription food and supplements
    Read Review
  • securely through Pets Best's website
    securely through Pets Best's website
    Best For:
    Prompt Claim Payments
    Read Review

Try Chewy Care Plus

Chewy Care Plus is a robust and comprehensive wellness and insurance plan for cats and dogs. Wellness coverage includes preventative care, routine vet visits, vaccines and assorted medications.

Accident and illness coverage helps your pets when they are sick and need to go to the vet on an emergency basis. This might include sickness, injuries and orthopedic issues. Additionally, your pets might need care for age-related conditions, chronic conditions, digestive issues and more. 

Best for regular checkups, you can get 24/7 customer care and unlimited access to licensed veterinarians. 

  • securely through Chewy Care Plus's website
    securely through Chewy Care Plus's website
    Best For:
    Annual Check Ups

Parts of a Pet Insurance Plan

  • Premium: Your premium is the amount of money that you pay each month in order to maintain your coverage. Your premium is due every month, even if you don’t go to the veterinarian in a specific month. Missing premium payments may allow your insurance company to terminate your coverage so be sure that you can cover your payments before you sign onto your policy of choice.
  • Deductible: Your deductible is the amount of money you’ll need to pay toward your vet bills before your insurance kicks in and begins paying a portion of your bills. When you sign onto your policy, you might have the option to choose a higher deductible in exchange for a lower monthly premium. Be sure that you can cover any deductible that’s included in your policy, as you never know when you might need to use your coverage.
  • Reimbursement percentage: After you meet your deductible, your insurance will cover the reimbursement percentage included on your policy. For example, if your insurance covers 80% reimbursements on major reconstructive surgical procedures and you receive $1,000 worth of vet bills after your deductible is paid, your insurance will cover $800 out of this $1,000. You’ll be responsible for the remaining $200 of the bill. Common reimbursement levels range from 50% to 100% depending on the insurance company and the type of policy you choose.

In addition, your insurance will also likely include limitations on the total dollar amount of benefits you can claim on your plan. This is referred to as your “annual maximum.” Once you reach your annual maximum, your insurance will not extend any more benefits to you until the policy is renewed. 

What Does Pet Insurance Cover?

There are 4 major types of pet insurance plans. The plan you choose will determine what’s included on each plan.

Accident-only pet insurance plans

Accident-only plans are self-explanatory, offering coverage for injuries from accidents, such as a broken bone. These plans don’t offer coverage for illnesses or wellness visits.

Accident-only plans cover circumstances when your pet needs emergency care after a traumatic injury. For example, if your pet is hit by a car and has a broken leg, an accident plan would cover things like your X-ray and any surgery your pet needs to get healthy again. Some other examples of accident policy inclusions may range from medications to hospitalization expenses resulting after an accident.

Illness-only pet insurance plans

Illness-only plans cover reimbursements for illnesses developed over time. For example, if your pet develops a urinary tract infection, an illness-only plan will help you pay for the cost of diagnosis and medication to correct the disease. Conditions like hypothyroidism, ear infections and digestive problems are also common inclusions. Cancer may or may not be covered depending on your policy.

Comprehensive pet insurance plans

If you’re looking for the most comprehensive coverage for your pet, you’ll want to choose a combination accident and illness plan. This type of plan covers everything found on both the accident and illness plans. These types of plans may also offer other types of coverage as well, including preventative care and wellness needs

Wellness pet insurance plans:

Some pet insurance companies also offer a wellness plan that covers regular, non-emergency veterinary needs. Examples of treatments included on this type of plan can be routine annual wellness visits and prescription supplements. Wellness plans aren’t available from every type of pet insurance provider.

Time-limited pet insurance policies

Time-limited policies only offer coverage for a certain period of time. However, these policies can be renewed after the time limit has been reached. These policies also come with financial limits. 

Maximum-benefit pet insurance policies

A maximum-benefit policy has a cap to the coverage, meaning it will only cover a certain amount of expenses. Once the maximum amount is reached, you must pay any remaining costs out-of-pocket. 

Lifetime pet insurance policies

Lifetime policies usually provide coverage for most issues that come with a pet. Assuming you renew your pet insurance policy each year, a lifetime policy will offer coverage for the pet’s entire life.

Pre Existing Conditions and Pet Insurance: What Isn't Covered

No pet insurance plan will cover everything. Some common examples of exclusions you’re likely to find on your policy include:

  • Pre existing conditions
  • Dental conditions
  • Heredity conditions
  • Hip dysplasia
  • Behavioral issues
  • Grooming needs
  • Any nonessential surgery (for example, declawing or ear cutting)

Evaluation for Preexisting Conditions

Pet insurance companies consider pre-existing conditions to be an illness or injury that emerged prior to coverage beginning. Insurance companies consider a pre-existing condition to be either curable or incurable. Some companies will not consider a condition to be pre-existing if it is curable, and will therefore provide coverage for it. This is very dependent on the company and the plan you get for your pet.

Some examples of pre-existing conditions that are considered to be curable are ear infections and vomiting. Some examples of pre-existing conditions that are considered incurable are diabetes and allergies. If a condition requires ongoing medication and veterinarian visits, it will most likely not be covered by your insurance provider. 

Pet Insurance Costs

The cost of pet insurance is dependent on a variety of factors. These factors include species, breed, age, where you live, and the insurance plan you choose for your furry family member. Older and larger animals tend to have higher insurance rates.

Though the specific price that you’ll pay for your insurance coverage will vary by breed and insurance provider, you can expect basic dog insurance to begin at about $25 per month. For cat insurance, the monthly premium can begin at $10 per month with most major pet insurance providers. The best way to learn specifically what you’ll pay for your pet insurance is to collect a quote from a few competing pet insurance providers. The national average cost for dog insurance is $585.40, while cat owners may expect to pay around $350 annually. 

Veterinary Care Costs

One of the biggest reasons why pet owners may need to purchase a pet insurance policy is because they vastly underestimate just how much emergency veterinary care can cost. The average cost for unexpected veterinary care begins at $800 and may cost up to $7,000 if your pet requires major surgery. Considering the fact that almost 70% of Americans have less than $1,000 in savings, this means that a comprehensive insurance plan can literally be a lifesaver if your pet gets into an accident.

Even the best dog insurance or cat insurance won’t cover everything. Educating yourself on some of the average expenses and frequent medical issues for the age and breed of pet you’re adopting can help you prepare yourself financially for your new friend — and can help you decide if you’d be saving money by investing in a pet insurance policy. 

How Does Pet Insurance Payment Work?

When you receive treatment, you’ll pay for the care you receive directly at the veterinarian during your visit. You’ll keep your receipt and then submit the receipt to your insurance company for reimbursement. Some veterinarians require that you pay for services at the time that you receive them while others will bill you later. Know your vet’s process, and be sure you can pay for your services.

If you cannot afford to pay for treatments up front, you may want to try to arrange a payment plan with your veterinarian. Tell your vet that you have insurance and show proof of your coverage. Then, tell your vet you need a payment arrangement while you wait for reimbursement. Many veterinarians will be happy to work with you once they know you have coverage. 

How Does the Claims Process and Reimbursement Work?

After you send in your receipt for a claims, your insurance company will compare your coverage against the treatments you’ve received. If the insurance company determines that you qualify for a reimbursement, it usually will issue you your refund in the form of an electronic deposit or through a check in the mail.

An important point to remember — your pet insurance doesn’t work in the same way as your health insurance. Your veterinarian won’t bill your insurance company on your behalf. You’ll need to be prepared to do a bit of legwork and keep your important documentation safe until you’re reimbursed by your insurance provider. 

Is Pet Insurance Worth it?

If you have a cat or dog living in your household, you already know that your furry friend isn’t just another possession — he or she is an important member of your family. Although homeowners insurance policies won’t cover your pet’s health, you can purchase an independent pet insurance policy to protect yourself against high medical care costs. But are these policies worth the price? Let's take a deeper look.

Pet Insurance by Age and Activities

Your pet's age and lifestyle can help determine whether or not pet insurance is worth it for you.

Keeping Your Pet Healthy is Worth the Cost at Any Age

Even the most careful pet owner can end up with an injured pet on their hands. Pet insurance helps you cover some of the costs associated with taking your pet to the veterinarian after an accident or injury. Pet insurance works in much the same way as auto insurance. First, you’ll take your pet to receive medical care and then file a claim with your insurance company. Your insurance company will then reimburse you if your treatments or services are covered by your plan. 

Your pet’s current health and age play a major role in how much worth you can get out of your insurance plan. Let’s take a look at a few of the reasons why you should consider age, health and activities when you select an insurance policy. 

Pet insurance for young pets

Proper veterinary care for your young pet should be high on your list of obligatory expenses when first adopting a furry friend. For example, puppies almost always come with a hefty list of health and routine care needs, even if they are completely healthy and have no preexisting conditions. The cost of vaccinations that are needed, along with spaying or neutering, can quickly add up if you don’t budget for these expenses beforehand. 

Due to the need for frequent veterinary visits for young pets, your pet’s youth is a great time to buy pet insurance. Rates for pet insurance are based on the type of pet, age, breed and location. Therefore, younger pets will often have a lower rate than older animals of their same breed. 

Pet insurance can also ensure that any underlying conditions or issues that arise in the future won’t break the bank. Getting insurance for a young pet will make sure that the new family member will always get the care they need.  

Healthy pets

Getting pet insurance while your pet is still healthy is a smart precaution. Your healthy pet could have a medical emergency at any moment, which can mean expensive vet bills. 

Don’t assume that you’ll be able to wait until your pet is injured before you sign up for a pet insurance policy. Most pet insurance plans include a waiting period that controls when your benefits begin. 

Purchasing an insurance plan after your pet is injured or becomes ill won’t save you money because you’ll need to pass through your waiting period before you can use your plan. Getting pet insurance for healthy pets will keep you from incurring the full expense of veterinary bills in the future if an accident occurs.

Older pets

It’s no surprise that as your pet gets older the chance of serious issues emerging begins to rise. Your pet can get sick just like you can. When this happens, veterinary visits can begin to pile up. Most people end up getting pet insurance too late in their life for it to be useful.

Some companies that offer insurance even have age limits, meaning they won’t offer insurance to your older pet once they reach a certain age. This can be disheartening if your older pet starts developing a condition that starts costing you a lot of money and there’s no insurance available. Getting pet insurance earlier in your pet’s life will prevent this unfortunate situation from occurring. 

Protecting Your Furry Friend

If you don’t have hundreds of dollars in savings, a single pet health emergency can potentially put you into debt. And now that you know the answer to "how does pet insurance work", it's time to make your choice.

Though pet insurance can help you pay for emergency accidents and long-term illnesses, you should never wait until your pet is sick to sign up for an insurance policy. Most pet insurance policies include a waiting period before they’ll pay benefits through your insurance, which prevents you from signing up for a policy once your pet already needs emergency attention. Begin comparing your pet insurance options now to ensure you can use your coverage when you need it. Take care of your pet today.

Frequently Asked Questions


Is it worth it to get pet insurance?


If you don’t have an emergency savings fund, investing in a pet insurance plan can be worth the money. However, you’ll need to double check your policy details and ensure that everything you need covered on your plan is included before you start paying your premiums.


Does pet insurance pay the vet directly?


In most cases, no. You’ll pay for your care at the vet’s office, file your claim and then wait for the provider to reimburse you. In some rare instances, an insurance provider might offer you a spending account option that you can use to pay for your care at the time of service.