What Is Pet Insurance? A Complete Guide

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Contributor, Benzinga
Updated: January 10, 2022

Did you know many of our readers end up choosing Lemonade Pet Insurance for their pet insurance coverage?

From health insurance that protects your body to motorcycle insurance that keeps you on the road legally, there are an endless number of insurance coverages that can give you peace of mind. If you own a furry or fluffy friend, you might be considering investing in pet insurance. But what is pet insurance, and is it worth the cost? Read on to learn more.

BZ

Key Points: Pet Insurance

 

  • Pet insurance helps you recoup medical costs for your pet
  • Usually, you’ll pay your vet up front, make a claim and your provider with reimburse you
  • Plans typically range from basic emergency coverage to more comprehensive preventative and wellness care
  • Common exclusions include preexisting conditions, cosmetic procedures and breeding costs
  • Plans are often affordable compared to the cost of a medical emergency

What Is Pet Insurance and How Does it Work?

Pet insurance is a bit different than human health insurance -- let's review:

What is it?

Pet insurance is a type of coverage that helps you cover the cost of veterinary bills you incur if your pet becomes ill or is injured. Some pet insurance policies will also include coverage for routine wellness visits and routine care.

How does it work?

So, how does pet insurance work? When you purchase a pet insurance policy, you’ll first review the terms of your coverage, including what is and isn’t covered as well as coverage limitations. If your pet is injured or becomes ill, you’ll immediately take them to receive the care that they need. You’ll usually pay your veterinary bill at the time you receive service.

After you pay your bill, you’ll submit a claim with your insurance provider indicating how much you spent on care costs. Your insurance provider will review your bill and your coverage to determine whether you are entitled to use your benefits. If your claim falls within the bounds of your insurance, your insurance company will reimburse you according to the terms of your policy.

Usually, pet insurance has no network restrictions, meaning you can use it at any provider and get reimbursed by the pet insurance company. This is especially great if you travel with your pet and need to get care when you're out of state.

Traveling internationally? You may need a International Health Certificate (and your pet insurance can help save on expenses getting your pets vaccines and records up to date, too.) Check out this checklist from the U.S. Department of Agriculture's Animal and Plant Health Inspection Service to be sure you're prepared.

What Does Pet Insurance Cover?

Multiple types of pet insurance are available, and the type of policy you choose will determine when you can use your insurance benefits. You'll have the option to purchase the following types of coverage with most insurers offering pet insurance options.

  • Accident coverage: Accident coverage helps you cover the costs of veterinary care costs associated with a traumatic injury. Some examples of conditions that are covered under accident protection include toxin ingestion, eye injuries and bite wounds. Accident coverage usually also extends to testing required to diagnose and treat traumatic injuries, like X-rays and ultrasounds.
  • Illness coverage: Illness coverage extends your pet insurance to include coverage for naturally occurring illnesses. Some examples of conditions that are covered under illness coverage include cancer, arthritis, hypothyroidism, ear infections, digestive problems and urinary tract infections. In most cases, illness coverage will provide you with coverage for any diagnostic tests needed to determine the best course of treatment for your pet.
  • Prescription medications: If your pet takes regular medication, you may need to add a prescription drug plan to your pet insurance coverage. This extends your insurance to include medications your pet needs for health maintenance.
  • Preventive care: Most pet insurance providers also offer the option to add preventive coverage to your list of protections. Some examples of preventive care that might be covered under a preventive care plan can include wellness exams, vaccines, flea and tick medication, heartworm prevention medications and screenings. 

Every individual pet insurance provider gets to decide which specific injuries and illnesses will be covered under each plan option. For example, while some pet insurance providers will offer coverage for common genetics-related health issues (like eye disorders and hip dysplasia) others will exclude these conditions from coverage. This is why it’s important to review your plan and know which types of illness are common among the breed of pet you have before you sign up for coverage. 

What Doesn’t Pet Insurance Cover?

Like any type of insurance, there are some things that no pet insurance provider is likely to provide coverage for. Some of the most common exclusions include the following:

  • Preexisting conditions: A preexisting condition is any type of injury or illness your pet already has when you enroll them in coverage. Most pet insurance providers will offer no coverage for preexisting conditions.
  • Cosmetic procedures: You cannot use your pet insurance policy to cover the cost of elective procedures like ear docking or declawing for cats.
  • Breeding costs: Most pet insurance providers will not cover procedures and costs associated with breeding or pregnancy. 

Important Pet Insurance Terms To Know:

Like most types of insurance, pet insurance providers use a variety of industry-specific terms to refer to and explain your policy options. The following are a few of the most common terms you’re likely to see when exploring pet insurance choices. 

What is a premium?

Your pet insurance premium is a set amount of money you’ll pay to your pet insurance provider to keep your coverage current. Your premium is due each month, so you’ll need to choose a policy with a premium that you know you can consistently afford. 

What is a deductible?

A deductible is the amount of money that you must spend on your pet’s care after an accident or illness before your insurance kicks in and starts covering a percentage of your veterinary bills. Choosing a plan with a deductible that you know you can afford is essential, as your insurance won’t reimburse you before you’ve met your deductible. 

What is an annual maximum?

An annual maximum is the total dollar amount of benefits you can claim from your insurance provider for your pet’s care in a given year. Once you reach your annual maximum, you will be responsible for all of your veterinary bills incurred past this point. 

What is reimbursement?

A reimbursement is a check or money transfer from your insurance provider after you receive care for your pet. In most cases, your pet insurance provider will require you to submit proof of your expenses before it will offer a reimbursement. The percentage of care costs that you will be reimbursed depends on the unique terms of your policy. 

What is a claim?

A claim is a formal request to use your insurance coverage benefits. For example, if you purchase a pet insurance policy and you incur a $200 veterinary bill after a covered accident, you’d need to submit a claim to your insurance provider before you’ll receive your reimbursement for care costs. 

What is a waiting period?

A waiting period is a set amount of time that your insurance policy must be active before you can begin using your benefits. For example, if you’re signing up for a pet insurance policy that has a 30-day waiting period, it means that you cannot make a claim for the first 30 days you have coverage. 

Not every insurance provider requires a waiting period for all services. For example, pet insurance providers that offer coverage for wellness visits and routine treatments may allow you to begin using these benefits immediately. Waiting periods are designed to prevent you from signing onto a policy when your pet is already ill or injured. This makes it important to begin shopping for a policy before you need to use it. 

What is a preexisting condition?

A preexisting condition is a condition that your pet already has when you sign onto your insurance policy. Pet insurance providers will not provide any type of benefits or reimbursement for preexisting conditions in the vast majority of cases. 

What is a breed restriction?

A breed restriction is a clause in a pet insurance policy that excludes coverage for a specific set of breeds. Pit bulls, Doberman Pinschers and Rottweilers are common breeds that you might see in an insurance provider’s list of prohibited breeds. If your pet is a prohibited breed, you cannot purchase a pet insurance policy from the insurance company that has restricted it. 

What is an age restriction?

As your pet gets older, health and injury risks increase. An age restriction is a limitation on the ages of pets that an insurance company will provide coverage for. In most cases, this means that a pet cannot be over a certain age in order to get coverage. The most common age limit for enrollment is 10 to 12 years. 

Types of Pet Insurance Coverage

There are multiple types of pet insurance, and the type of pet insurance you choose will determine the benefits you receive and when you can use your insurance. Though each individual insurance provider will refer to coverage levels by its own classification, the following are some of the most common plan options you’ll see. 

Accidents and Injuries Coverage

Accident and injury coverage (sometimes referred to as accident-only coverage) is a type of pet insurance that only provides coverage for traumatic accidents that hurt your pet. For example, an accident and injury policy will help you pay for bills you receive after your dog is injured by a car — but it will not cover bills associated with cancer care. 

What it covers: 

There are many situations that constitute an accident or injury. Some examples of common coverages found on accident and injury plans include:

  • Bloat
  • Foreign-body ingestion
  • Getting hit by a car
  • Torn cruciate ligament
  • Poisoning
  • Cuts and lacerations
  • Broken bones

Specific inclusions will vary between plan providers. 

What it doesn’t cover:

  • Preexisting conditions your pet has when you sign onto your policy
  • Illnesses 
  • Breed-specific and genetic conditions
  • Congenital conditions
  • Chronic conditions
  • Cancer
  • Dental illness
  • Preventive care
  • Routine wellness visits
  • Most prescription drugs

Preventative Care and Wellness Coverage

Preventive care and wellness plans help you cover the costs associated with routine care you know your pet will need. 

What it covers: 

Some common coverages on preventive care plans include: 

  • Wellness exam fees
  • Vaccinations
  • Spaying or neutering
  • Microchip implants
  • Parasite prevention
  • Routine lab work
  • Dental cleaning

What it doesn’t cover:

  • Any type of treatments related to an accident or injury that is not considered routine care

Prescription drug coverage

Many pet insurance plans do not cover routine prescription medications for your pet. However, you can add prescription drug coverage to most pet insurance plans, which will extend your coverage to take-home prescriptions. 

What it covers: 

Some examples of commonly covered drug classes include: 

  • Antibiotics
  • Allergy medication
  • Insulin and supplies
  • Eye and ear drops
  • Steroids
  • Pain relievers
  • Anxiety medication

What it doesn’t cover:

  • Any percentage of veterinary care costs after an accident or injury
  • Flea, tick and heartworm preventatives
  • Supplements and wellness products that are not prescribed by a veterinarian (for example, diet dog food for an overweight pet)

Exotic Pet Coverage

If you have a dog or a cat, you’ll be able to purchase insurance with any pet insurance provider. However, few insurance providers offer coverage for other pets. If you own a bird, turtle or other pet beyond a dog or a cat, you’ll need to invest in exotic pet coverage with a company that extends coverage to these animals.  

What it covers: 

  • Accident and illness protections for animals like birds, guinea pigs, lizards and other exotic animals

What it doesn’t cover:

  • Animal-specific exclusions laid out in your policy

How To Choose the Right Pet Insurance Coverage

Taking time to choose the right pet insurance coverage is important when it comes to finding an affordable plan that includes the benefits you need. Be sure to consider the following features before you sign onto a pet insurance policy.

  • Premiums: Your premium is due every month, and your insurance provider may cancel your coverage if you begin missing monthly payments. Take a look at your budget and determine what you can afford to pay in monthly premiums.
  • Inclusions and limitations: Each pet insurance policy chooses its own exclusions and limitations on coverage. Review these exclusions and inclusions so you know exactly what is and isn’t included in your policy. It can be helpful to know which genetic conditions are common in your pet’s breed so you can select a policy that covers them.
  • Per-condition and annual maximums: When you reach your policy’s maximum benefits, your insurance company will not provide additional assistance with care bills. This effectively renders your policy useless, so be sure you select a policy with reasonably high maximums.

Collecting multiple quotes and leaving yourself with plenty of time to compare all of your options can make choosing a policy easier.

Compare Pet Insurance Plans

  • Lemonade Pet Insurance
    More Details
    Best For
    Top-rated pet insurance
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    Read Review
    securely through Lemonade Pet Insurance's website
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    Lemonade is currently available in the following states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, District Of Columbia, Georgia, Illinois, Indiana, Iowa, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin,

  • Spot Pet Insurance
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    Prescription food and supplements
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    securely through Spot Pet Insurance's website
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  • Pumpkin Pet Insurance
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    Best For
    Families with multiple pets
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    Read Review
    securely through Pumpkin Pet Insurance's website
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    Limitations apply. For terms and conditions, visit pumpkin.care. 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.

  • Trupanion
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    securely through Trupanion's website
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Protect Your Pet with the Right Coverage

When you purchased your health insurance plan, you probably spent a fair amount of time comparing all of your coverage options. Why not do the same for your 4-legged friend? Pet insurance companies have made it easier than ever before to get a quote, which allows you to compare your coverage options in less time. Don’t wait — begin your search with quotes from a few recommended providers today.

Frequently Asked Questions

Questions & Answers

Q
What is an annual deductible for pet insurance?
A

An annual deductible for pet insurance is a set dollar amount that you’ll need to spend on your pet’s care before your insurance helps you pay your bills. For example, if your policy has a $500 deductible, you must pay off $500 worth of covered veterinary bills before your insurance will provide coverage. Routine wellness costs and costs associated with bills outside of your covered services usually do not count toward your deductible.

 

Q
What is a lifetime pet insurance policy?
A

A lifetime pet insurance policy protects your pet for the entire length of their life. No matter how old your pet gets, your insurance will provide you with the option to renew coverage annually. Lifetime pet insurance policies are the most comprehensive policy options, but it is also the most expensive type of coverage you can purchase. 

 

Q
What is a per-condition pet insurance deductible?
A

A per-incident deductible is a deductible that you must pay each time your pet is seen for a new illness or injury. These policies may provide you with fewer benefits, especially if your pet needs to go to the veterinarian for multiple health concerns.