Pet Insurance Explained: The Importance of Insuring Your Pet
Guest post by Consumers Advocate
When you bring a pet into your home, there are many decisions to make. You want to make sure that your pets have the proper food, a nice place to sleep and plenty of toys.
In order to keep our pets in the best possible health, we make sure they get their daily exercise and take them every year for their annual vet check-ups.
But, what happens if your dog, cat or even rabbit ends up getting sick and needs emergency vet care? You, of course, would want your pet to have the best care possible, but this could leave you with a very expensive medical bill.
This is the type of scenario when pet owners are very glad that they have pet insurance. They have the financial ability to pay for this or any unexpected medical bills.
What is Pet Insurance?
This is a medical policy that will cover any illness, injury or accident that might occur with your cat, dog, or even bird.
It is a system, similar to our human health insurance, that if your pet gets a sudden illness or even a simple paw injury, the provider would pay a big portion of your medical bill.
If your pet gets seriously ill or hurt, your policy helps to pay for the best care possible for your pet without breaking the bank.
Most pet insurance plans will pay up to 90% of the vet bill and this can be a huge financial relief since the cost of veterinary care is consistently rising. It really isn’t uncommon for a vet bill to be $10,000, even for a minor incident.
The policy will not only pay for the treatment but the lab work and testing that goes with it.
Keep in mind that some pet insurance will not cover any pre-existing illness or condition which is why it’s best to purchase it when your pet is young and before any conditions develop.
The Best Pet Insurance Companies
The good news is that there are many good, solid companies that offer great coverage.
One of the best providers is Healthy Paws. Healthy Paws is not only well-liked by their policyholders, but offer unlimited benefits in all of their different plans.
Most companies only offer unlimited benefits in their most expensive plans.
Embrace Pet Insurance is also a top company that has a range of premium options so you can really budget accordingly. They don’t offer unlimited benefits but also give pet owners a stipend of $650 for dental work.
Petplan is another top company that offers comprehensive coverage at fair rates. They do offer unlimited benefits but only in their most expensive plans.
There are many other top companies to choose from and ConsumersAdvocate.org researched a comprehensive list of the best pet insurance companies of 2019. It provides not only a list of the top companies but also some very good information.
How Does Pet Insurance Work?
There is a lot to know before signing up for a coverage plan. There are many factors that not only affect the coverage you have but can also affect the price.
What Does Pet Insurance Cover?
There are three different kinds of coverage:
Comprehensive insurance is the best, most all-inclusive of the plans and is always recommended.
Comprehensive plans include coverage for all accidents, injuries, diabetes, cancer, chronic allergies, and almost all other incidents or illnesses that your pet might encounter.
This type of insurance allows you to be covered for virtually every issue that might happen to your pet which is why you enrolled in pet insurance in the first place.
If your dog or cat suddenly develops diabetes, a comprehensive plan will allow you to get treatment for your dog’s illness for the rest of his or her life.
Comprehensive plans will also help you pay for the vet visits and the treatment necessary to maintain their diabetes.
2. Accident Only
Accident only, as the name implies, covers only accidents. It will also cover swallowed objects and anything accident-related. It will not cover any illness which is why this type of insurance can be limiting.
This coverage type is for routine and preventative care visits and procedures.
While this seems like a good addition, most of these procedures are not very expensive and can be easily paid out of your own pocket. Further, it is not a stand-alone policy but can only be added to any comprehensive or accident plan.
Therefore, if you want to keep your premiums down, you can definitely skip wellness pet insurance.
Now that you know the kind of coverage that is available, there are some other considerations when signing up for it.
Benefit limits are the amount that each pet insurance company will payout in the policy calendar year. This can be very important because you want to know how much you can be reimbursed for any of your medical bills and don’t want to reach a cap.
There are some providers that offer unlimited benefits, which is always the best and most comforting because you don’t have to worry about ever reaching a limit if your pet has a big vet bill.
The four types of benefit limits are the following:
1. Unlimited Lifetime Benefits
Unlimited lifetime benefits are when there is no cap or limit that the pet insurance company pays you back throughout your pet’s life. You can see how this would be the most preferable especially if your pet has a serious illness and needs treatment for the rest of his life.
2. Annual Maximum Benefits
Annual Maximum is when there is an annual cap each year that the company will pay. It can range from $10,000 to $20,000 or more.
But, this cap can be limiting if your pet gets very sick or hurt.
3. Annual Per-Incident Benefits
Annual per incident means that the company will only pay a set amount each calendar year for an illness or condition.
If the limits are low, you can easily be paying out of pocket the balance
4. Lifetime Maximum Benefits
The lifetime maximum benefit structure is the most the pet insurance will pay you for the rest of your pet’s life for a certain condition.
Again, if your pet is seriously ill, you can hit that limit quickly.
A deductible is an amount you first pay on each medical bill before the company reimburses you.
There is usually a range of deductible options that you can choose from and if you want a lower premium, a higher deductible is the better choice.
There are two types of deductibles:
1. Annual Deductible
The annual deductible is paid only one time per year on your first vet bill. Once you have reached your deductible (that can range from $100 to $1,000), you don’t have to pay it again that policy year.
The annual deductible is preferable because you know exactly what you are paying each year.
This deductible resets each year.
2. Per-Condition Lifetime Deductible
The per-condition lifetime deductible lists the amount of deductible you need to pay for each different condition or illness for the lifetime of your pet.
the deductible is met, the pet insurance company will pay for the condition for the rest of your pets’ life.
This can be a good option if your pet has a serious illness; however, you still have to pay a deductible for each illness.
3. Per-Condition Annual Deductible
The per-condition annual deductible will specify certain deductibles per each condition. This type of deductible will reset each policy year.
When signing up for a plan, you also need to choose what type of reimbursement type you would like.
There are typically 3 different reimbursement choices:
1. Actual Cost
The actual cost reimbursements pay you back on your actual vet bill after you meet your deductible.
Most pet insurance plans allow you to choose from a 65% to 90% reimbursement rate and if you choose the lower range, you will be reimbursed less and the higher end will reimburse more of the bill.
This is the best of the plans because you know exactly what you will be reimbursed.
2. Benefit Schedules
The benefit schedule reimbursement model is not as preferable because they spell out the maximum amount you can be reimbursed for each specific occurrence.
If your dog injures his paw two times in the same year, you will probably hit the limit quickly.
3. Usual and Customary
Usual and customary, while not as common in most pet insurance plans, will only reimburse you the amount that they think is usual or customary for that condition. This is too random and arbitrary.
Pet Insurance Cost
Now that you can see the different coverage options, the price of your policy depends on many different factors:
- the plan you choose
- the type of pet you have (dogs are more expensive than cats to insure)
- the city in which you live (expect to pay more in a city versus a rural community)
- the age of your pet
Based on insurance sites and other reviews, you’ll see prices from $20 to $90 a month, and possibly as high as $250. Again, it all depends on what you choose. Keep those variables in mind as you shop around.
What Type of Pets Can Be Covered?
The different types of pets that can be covered include:
There are very few types of pets that aren’t eligible for coverage.
When Is Pet Insurance Necessary?
While some cats, dogs, or even birds might not need insurance, there are certain breeds that are pre-disposed to specific hereditary conditions. And most of these conditions are expensive to treat.
For example, Labradors tend to have hip and elbow issues and hip surgery can be very expensive.
This is when pet insurance can be very valuable and a necessity.
Your vet is always a good resource to find out what conditions or illness that might occur with your specific pet and breed.
Pet insurance is very valuable to have if your pet has a serious accident or injury.
There might be some years where your dog, cat or even bird is healthy all year long and you are paying for something that you might not need.
However, with the monthly costs of most policies being very reasonable it can certainly be worth having.
You will know that you can always pay for whatever happens to your pet tomorrow or in the future.
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