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Katie OrmsbyPet Insurance Expert

Katie enjoys helping readers make sense of Pet Insurance options. She's previously written business and shopping features for The Seattle Times and Seattle Met magazine. She has a degree in journalism and political science from the University of Washington.

How Pet Insurance Works

We protect ourselves, our homes, our cars, and our possessions with insurance. So, it only makes sense that we’d want to cover the four-legged members of our families, too. That’s where pet insurance comes in: it’s designed to give you a little security while giving your pets the safety net they deserve. And fortunately, pet insurance policies are affordable.

You never know when a sudden illness or an accident will happen, but you’re probably all too familiar with the rising costs of veterinarian bills. Basic treatment can easily reach a price tag over $1,000, and more intensive care can cost as much as a house down payment. A good pet insurance policy allows you to rest easy knowing that you won’t be stuck making a difficult choice simply because treatment is too expensive.

What Is Pet Insurance?

Pet insurance works in a similar way as renters insurance or auto insurance. Once you decide on the best coverage for your best friend, you can purchase a policy that covers illnesses or accidents, or both. Then if an unfortunate situation arises, you’ll be reimbursed for the cost of care at a certain percentage and after you pay the deductible.

It can be a little tricky to make sense of pet insurance options, so prepare yourself with this guide before you pick a plan.

Pros and Cons of Pet Insurance

Pros
Cons
Peace of mind that doesn’t break the bank
Pay upfront before reimbursement
Customize coverage to your pet's needs and your wallet
Pre-existing conditions may not be covered
Often can keep your regular vet
Routine care may not be covered

How Do Pet Insurance Plans Work?

Should you ever need to file a claim with your pet’s insurance company, you’ll first need to meet your annual deductible. Then, you’ll be reimbursed at the percentage you’ve chosen up to your annual limit.

Much like other types of insurances, pet insurance plans have several options for coverage. With levels that vary from accident-only or illness plans to policies that include general pet wellness, the cost of your premium is determined by the coverage level you choose.

Although highly customizable, the cost will also vary based on your deductible amount and your annual coverage limit. While policies that have higher deductibles tend to have lower premiums, policies with higher annual limits and reimbursement levels tend to be a little more expensive.

What Types of Pet Insurance Plans Are There?

There are three common types of pet insurance plans to consider: accidents-only, accidents & illness, and comprehensive coverage that includes wellness. Each plan provides different coverage:

Plan
Accidents-Only
Accidents & Illness
Comprehensive + Wellness
Price
$
$$
$$$
Details
Basic level of coverage for accidents
Comprehensive coverage for accidents and illnesses
Comprehensive coverage, plus routine and preventive care
Examples
Broken bones and lacerations
Poisoning and hip dysplasia
Physical exams and vaccinations

How Much Does Pet Insurance Cost?

Several factors determine the cost of a pet insurance plan, including:

Annual Deductibles Explained

Your annual deductible is the out-of-pocket amount you’ll need to pay per year before you’re eligible to be reimbursed for veterinary services and treatments. Many of the best pet insurance companies allow you to choose your deductible amount, but it does affect the cost of your monthly premium. Higher annual deductibles tend to carry lower premiums.

As a hypothetical example, the table below generally illustrates how deductibles affect monthly premiums:

Annual Deductible
Monthly Premium
$50
$29.59
$500
$16.89
$1000
$8.93

Reimbursement Levels Explained

It’s important to remember that your animal insurance works on a reimbursement basis. Once you’ve reached your deductible amount, the insurance company will pay back the costs at the percentage determined by your policy. Generally speaking, reimbursement levels fall between 70 and 90 percent. For example, a policy with 90% reimbursement would pay $900 of a $1,000 bill, while a policy with 70% reimbursement would pay $700 of a $1,000 bill.

The higher your level of reimbursement, the higher your monthly premium will be. So, let’s use a policy with a $500 deductible to look at how reimbursement levels affect the cost. The table below continues our hypothetical example to show the relationship between reimbursement levels and monthly premiums:

Reimbursement Level
Monthly Premium
70%
$16.01
80%
$18.03
90%
$22.91

Annual Limits Explained

Vet insurance policies usually allow you to choose annual limits — these limits are the very maximum amount your policy will pay. For example, if you carry a $5,000 annual limit and a surgical procedure reaches a price tag of $10,000, you’ll be responsible for the remaining $5,000.

Like deductibles and reimbursement levels, annual limits also affect the price of your premium. Policies that have unlimited limits carry a higher out-of-pocket rate than those with lower-level limits. To continue the hypothetical example, the table below shows how annual limits affect monthly premiums:

Annual Limit
Monthly Premium
$5,000
$13.96
$20,000
$15.47
Unlimited
$18.21

Some insurance companies offer a greater degree of customization than others, but generally, you have a certain amount of control over how much you pay for a monthly premium. As you can see, the annual deductible, reimbursement level, and annual limit all play a role in determining the cost of a pet insurance policy.

Does Pet Insurance Cost the Same for Dogs and Cats?

Pet insurance plans for both cats and dogs are typically quite affordable, but dog insurance costs are higher than the same coverage for cats. Comparatively speaking, cats require less veterinary care than dogs and treatments are less expensive. However, the price of either policy will fluctuate depending on the level of coverage, your pet’s age and breed, and several other factors that decide your policy’s premium.

Average Pet Insurance Premiums for Dogs and Cats

 
Accident-Only Plans
Accident & Illness Plans
Dogs
$18.17 per month
$49.51 per month
Cats
$11.13 per month
$28.48 per month

Source: North American Pet Health Insurance Association

How to Get Cheap Pet Insurance

In addition to your deductible, reimbursement level, and annual limit, several other factors can affect the cost of your pet insurance premium. Your pet’s age and breed, as well as your location, can also influence the price. Thankfully, there are several steps you can take to save money without sacrificing your pet’s wellbeing.

1. Get pet insurance early.

One of the easiest ways to make sure you’re getting the cheapest pet insurance is to begin coverage when your pets are young. Young animals generally have the lowest premiums, and pre-existing conditions aren’t as big of a concern. But try not to worry too much if your pet is older, there are plenty of plans that’ll cover them too.

2. Keep up with your pet’s health.

While routine wellness care typically isn’t covered under basic policies, a wellness plan can be added. Having such a plan in place can keep long-term, health-related costs down. Plus, keeping your pet healthy and up to date on vaccinations can help prevent the need for expensive treatments later.

3. Shop around for rates.

Once you identify the type of coverage you need, don’t be afraid to shop around for the best rates. Comparing pet insurance policies is easy, and unless you check, you’ll never know which company carries the most budget-friendly option.

4. Look for hidden deals and discounts.

Often, pet insurance companies will offer discounts or deals that may not be obvious. As you’re shopping around, make sure to ask about any hidden discounts that you may qualify to receive. You may even be able to bundle your pet’s coverage with other insurance policies, which can often result in significant savings.

5. Consider raising your deductible.

When you raise your deductible, your monthly premium will decrease. Keep in mind that you’re responsible for the deductible before your insurance company begins reimbursing you. So, you’ll want to choose a deductible you feel comfortable covering.

Frequently Asked Questions

Is pet insurance worth it?

Having puppy insurance or cat insurance can give you a lot of comfort, and it can also save you money. Paying a premium of a few hundred dollars a year can prevent you from having to bear the costs of a major illness or injury alone.

Does pet insurance cover routine care?

Most pet insurance plans only cover illnesses and accidents, but a provision called an “add-on” can be used to expand your policy. Wellness plans allow the expenses of routine care to also be covered.

Are pre-existing conditions typically covered?

Unfortunately, most pet policies don’t cover pre-existing conditions. Policies can often be purchased for pets with pre-existing conditions, but coverage will exclude that specific illness. So, pre-existing conditions are a reason it can be a good idea to get pet insurance as early as possible.

Does pet insurance cover medications?

Many pet insurance policies cover the costs of prescribed medications. However, medications that can be purchased over the counter, like those used for flea and tick prevention, are usually excluded.

Do pet insurance plans have waiting periods?

Yes, most pet insurance carriers have a waiting period before coverage kicks in. So, you need to wait a specified amount of time, often 14 days, before you can use the coverage and file an insurance claim.

Too Long, Didn’t Read?

Since you never know when an unfortunate accident or illness will arise, the best pet insurance can provide the extra financial security you’ll need. Affordable pet insurance policies are easy to find, but there are a lot of components to them. Now that you know how the right policy can help protect your pet while saving you money, you’re all set to choose the best pet insurance company for every furry member of your family.