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What Is Pet Insurance and How Does It Work?

What Is Pet Insurance and How Does It Work?

You only need to take a glance to notice the abundance of people with pets. A study by the American Pet Products Association confirms the impression: pets live in over 67% of U.S. households. We know their owners probably have home and health insurance already, so why shouldn’t their pets be covered too?

Pet insurance can help pay veterinary bills, either fully or in part, when Fluffy or Fido goes in for a check-up, is injured, or needs medication. The furry members of your family deserve the best, and pet insurance is the easiest way to lighten the burden on your wallet. Keep reading to learn from our insurance experts how pet insurance works, what it does and doesn’t cover, how much it costs, and whether it’s really worth it.

What Is Pet Health Insurance?

Caring for a canine or feline child is quite expensive, and the costs of veterinary care are on the rise. Expensive emergency care or costly exam fees could wreak havoc on your finances. We don’t want to scare you, but pet health insurance could spell the difference between affording pet care and losing your pet.

A pet health insurance policy reimburses you for specified costs of routine veterinary care and unexpected injury or illness. Some insurance companies and policies may also offer coverage for preventive and elective procedures. Most pet insurers provide coverage for cats and dogs, but you can also buy specialized plans for pets that are considered exotic animals. Like your own health insurance policy, pet health insurance itemizes covered treatments, annual premiums, deductibles, and per-illness or lifetime maximums.

5 Best Pet Insurance Providers

We’ve looked at reimbursement policies, coverage, and providers’ commitment to the animals under their coverage to help pet parents coast-to-coast make informed decisions about pet insurance.

Editor's Choice
Lemonade Pet Insurance

Sign up in seconds. Get paid in minutes. Award-winning service.

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Lemonade is a public benefit corporation. It takes a flat fee up front before paying claims. Then, they donate what’s left to meaningful causes their customers choose—including animal welfare organizations.

Enroll in a Pet Assure plan today!

America’s Top-Rated veterinary discount plan.

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Since Pet Assure isn’t insurance, there are no exclusions, no forms to fill out and no deductibles to meet before your coverage kicks in. This also means that you won’t be denied any claim for any reason. Just visit a participating vet and receive your savings at checkout.

Healthy Paws Pet Insurance

Top-rated pet insurance plans.

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Steve Siadek and Rob Jackson created Healthy Paws Pet Insurance to help pet parents deal with the financial impact of giving their pets quality veterinary treatments and to also help animal rescue organizations care for the many sick pets in their care.

SPOT Pet Insurance

Committed to helping pets lead longer, healthier lives.

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SPOT Pet Insurance believe that pets are part of the family. They strive to help your pets lead longer, healthier lives and reduce pet parent worry with their insurance plans and strong customer service.

Pets Best Pet Health Insurance

The best pet Insurance for a lifetime of care.

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Pets Best was founded in 2005 by Dr Jack Stephens, the “father” of the pet insurance industry in North America. The team at Pets Best is comprised of pet owners and pet lovers, many of whom have veterinary backgrounds and are involved with animal rescue.

How Does Pet Insurance Work?

Pet health insurance follows a reimbursement model. In this model, you take your pet to the vet for an illness or an injury, pay the vet bill incurred at that time, and later submit a claim to the insurance company for reimbursement of your covered costs. This works in favor of the pet parent, as it lets you visit any licensed veterinarian, specialist, or emergency clinic.

On a month-to-month or annual basis, you pay a premium to your insurer for coverage. Your policy will itemize which expenses/conditions are covered as well as your reimbursement rate, maximum payout, and deductible. Your pet insurance carrier may require paperwork or a medical history review from your vet to process your insurance claim, so you need to keep copies of all receipts and documentation from your vet clinic visit.

Like human health insurance, most pet insurance plans have waiting periods, reimbursement percentages or copays, limits, and deductibles. Here’s how they apply to pet insurance.

  • Waiting period. A waiting period refers to the time that must elapse before your pet insurer will reimburse you for your pet’s conditions. Waiting periods protect insurers from pet owners who would buy a policy to cover a single procedure and then let the policy lapse. Once your pet insurance takes effect, three waiting periods will apply when you file a claim:
    • Two days or 48 hours for accidents
    • Fourteen days for illnesses
    • Six months for orthopedic conditions
  • Waiting periods take effect on your policy’s commencement date, and your provider can reimburse you for a claim only after the applicable waiting period ends. Thus, you should purchase insurance long before you need it.
  • Reimbursement percentage or copay. A copay is the percentage of the total cost for which your insurance carrier does not reimburse you for a claim for covered costs. This ranges from 10% to 30% for most carriers, depending on the plan options at enrollment. For instance, if your copay is 10%, your pet insurance plan will reimburse you 90% of the veterinary bill.
  • Limits. Pet insurance plans cap the maximum payout you can receive for a covered claim. Per-incident limits place a threshold on how much the insurance company will reimburse you for a single accident or illness, while annual limits determine how much you can be reimbursed within a 12-month period. Once you reach the yearly reimbursement limit, you have to pay for 100% of your medical expenses until the policy year resets. Some insurers may also place lifetime caps on your pet insurance plan.
  • Deductible. A deductible is the portion of veterinary costs you must pay before your insurer starts reimbursing you for the cost of vet care. Pet insurance plans have either a per-incident deductible or an annual deductible. A per-incident deductible applies every time you visit the vet clinic for a new condition, while an annual deductible applies only once per year. Plans with a per-incident deductible may reimburse you less for a claim, especially if you frequently take in your pet for various medical issues.

What Does Pet Insurance Cover?

Typical pet insurance plans provide adequate coverage for most of your pet’s diagnostics and health treatments. Depending on the carrier, however, your pet insurance plan may or may not cover every one of your pet’s expenses. There are four main types of pet insurance plan.

  • Accident only. An accident-only plan provides coverage when your pet requires emergency care after a traumatic injury. Commonly covered accidents include cuts, lacerations, ingestions, broken legs, and swallowed objects. This plan also covers expenses such as X-rays and surgeries needed to restore your pet’s health.
  • Illness only. Illness-only plans reimburse you for the treatment of conditions such as allergies, arthritis, and diabetes. Such plans also pay for the cost of diagnosing and treating your pet’s urinary tract infections, ear infections, and digestive problems. Cancer may or may not be covered, depending on the policy.
  • Accident and illness. Accident and illness plans offer the most comprehensive coverage for your pet. These plans combine the benefits of both accident and illness plans.
  • Wellness plan. Some insurers offer wellness plans that cover regular, non-emergency veterinary needs, such as routine annual wellness visits and prescription supplements. Coverage may also extend to preventive procedures, such as annual exams, vaccinations, blood work, and dental cleanings.

Some pet care plans may also cover care and consultation for behavioral issues, such as aggression, chewing, excessive licking, and separation anxiety. Other plans provide this coverage as an add-on. Alternative therapies, such as acupuncture or chiropractic care, may also be covered.

What Doesn’t Pet Insurance Cover?

You should carefully assess what pet insurance plans don’t cover as you weigh your policy options. Pet insurance often excludes coverage for some conditions.

  • Pregnancy. Most pet insurance plans do not cover costs associated with breeding and pregnancy.
  • Experimental treatments. Your pet insurance policy is unlikely to cover experimental treatments, such as kitty sound baths or CBD oils.
  • Cosmetic procedures. Most pet plans do not cover procedures such as claw removal and ear cropping.
  • Hereditary or congenital conditions. Some insurers classify genetic conditions as pre-existing conditions and thus exclude them from coverage.

Does Pet Insurance Cover Pre-existing Conditions?

Congenital or hereditary conditions as well as certain medical conditions may be considered pre-existing. Pet insurance companies don’t cover such conditions, but your pet’s pre-existing condition will not prevent you from securing pet coverage. You need to determine whether a condition is deemed curable or incurable (terminal). Pre-existing conditions that are deemed curable may be subject to a mandatory waiting period before coverage commences, while terminal pre-existing conditions may be excluded or covered only on a limited basis.

Insurers use your pet’s medical record to determine whether it has a pre-existing condition. Consequently, any sign or diagnosis of an illness that shows up before the end of your policy’s waiting period will be considered a pre-existing condition.

Some pet breeds are prone to specific illnesses. If you know that your furry companion is likely to develop a hereditary condition, however, you shouldn’t always assume it will be considered a pre-existing condition. Your pet probably won’t show signs of such a condition at birth or in the first few years of life, but, if you wait until symptoms develop before getting insurance, your pet plan will probably not cover the condition.

How Much Does Pet Insurance Cost?

Pet insurance plans are generally affordable, with prices starting as low as $10 per month. Cats are usually less expensive to insure than dogs, but this may vary depending on the type of plan you purchase. Other factors may also impact the cost of pet insurance.

  • Age. You can expect to pay higher premiums (and higher vet costs) for an older cat or dog, as the chances of your pet’s becoming ill increase with age.
  • Breed. Some pet breeds are predisposed to specific conditions and illnesses because of their size or genetic factors. For instance, the Abyssinian cat breed is prone to retinal atrophy and periodontal disease, so your Abyssinian kitty may be more expensive to insure. You will also pay more for larger dog breeds, which are vulnerable to hip and heart conditions.
  • Your location. Veterinary care costs are higher in some parts of the country than in others. For instance, a pet parent living in New York City will pay more for pet insurance than someone living in rural Wyoming.
  • Deductible and reimbursement level. A higher deductible lowers the cost of your insurance plan but increases your out-of-pocket bill at the vet clinic. A lower deductible, by contrast, increases your premium. Your policy’s reimbursement level will also affect the plan’s cost. A plan with a 90% reimbursement rate will cost more than a plan that provides only 70% reimbursement.
  • Insurance provider. Pet insurance pricing varies from carrier to carrier.

Is Pet Insurance Worth It?

Pet insurance is worth the expense for those who want the comfort, satisfaction, and peace of mind that comes with knowing that they are protected against exorbitant costs arising from unexpected injury or illness to their pets. Sure, some health problems won’t cost more than a few hundred dollars to treat, but the anxiety connected with a major health scare is only made worse when you get a bill for thousands of dollars. Accidents and illnesses are unpredictable, but pet insurance can provide a safety net against the worst that could happen to your pet.


You probably fell in love with your pet within minutes of first snuggling them, and it’s equally easy to sign up for a pet health insurance policy. Still, choosing the right pet insurance plan is a significant decision. You must consider elements such as premiums, deductibles, benefit limits, age limitations, waiting periods, and exclusions.

Once your policy is active, you can take your sick or injured pet to any vet clinic, get treatment, and submit a claim to your insurer for reimbursement. It’s that easy!

Frequently Asked Questions

Will pet insurance cover spaying?

Most pet insurance policies do not cover spaying, but some carriers may offer wellness plans that do.

Will pet insurance cover neutering?

As with spaying, most pet insurance policies do not cover neutering surgeries. However, some insurance companies may offer wellness plans that reimburse you for routine and preventive care, such as neutering.

Does pet insurance cover dental?

Dental accidents and illnesses are typically covered under most insurance policies, but routine dental care services, such as teeth cleaning, are not covered.

Does pet insurance cover vaccines?

Pet insurance does not pay for vaccinations, but you can lower your premiums by keeping your pet’s vaccinations up to date.

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