How Does Pet Insurance Work? An In-Depth Guide on What You Need to Know

 

Having pets at home can be likened to that of having children. When you really love your pet, you’re always going to want the best for them, at all times. From their food, and even to minuscule matters like their toys, you wouldn’t want to take your chances. When they get sick, you’ll also want to give them the best care possible. With this, however, comes the costs associated with it. There’s no denying the fact “best care possible” can be synonymous with high expenses. Yes, when your pet gets sick, often the bill can be just as costly as with that of when your children get sick, too.

The good news is that today, insurance companies have also expanded their services. Apart from the usual insurance per se for human beings, now they also provide more options with their services: namely, pet insurance.

Learn more about pet insurance and how it works, by reading through below.

Are you unsure if you should invest in insurance for your new pet? Click here for an in-depth answer to the question, “How does pet insurance work?”

There are about 400 million pets in the US. Of these, only a small percentage is covered by pet insurance.

Most pet owners in America are still unsure about getting pet insurance. This is partially due to the lack of clarity on how it works and the myths surrounding this type of insurance.

This article will provide an in-depth answer to the question “How does pet insurance work?” You will get an understanding of what it is and what it covers.

What Is Pet Insurance?

Pet insurance is an insurance policy bought by a pet owner to help lessen the general costs of veterinary bills. This coverage is similar to health cover for humans. Pet insurance fully or partially covers the often expensive vet bills.

On average, your pet, particularly that of dogs, is going to stay with you for at least ten to fifteen years. During this time, you never know how sickly your dog is going to be. Will they meet health problems? Untoward accidents? Then, when these happen, you’re going to have to shell out money from your own account, to pay for this expense. Truth be told, without pet insurance, this can burn a hole in your pocket.

How Does Pet Insurance Work: Elements of Pet Insurance

Pet insurance has some shared features with human health insurance. Here are some of them.

Deductible

A deductible is a set amount of money you pay out of pocket before your insurer kicks in. There are two types of deductibles. The first one is per incident deductible, which is the amount you must pay for each new injury or illness. The second one is the annual deductible which you must pay each year.

Co-pay

The co-pay is the amount you are required to pay after the deductible is met. Once you pay this, the remaining expense is covered by the insurer. If your co-pay is 20%, then the insurance company pays 80% of covered expenses.

Maximum payouts

A maximum payout is the ceiling figure your pet insurance company will reimburse you. There are five types of maximum payouts:

Maximum Payout per Incident

This is the maximum amount of money your insurer will pay for each new illness or injury. Once you reach the limit, your insurer will no longer pay for that specific treatment.

Maximum Lifetime Payout

This is the maximum amount your insurer will reimburse for the lifetime of your pet. Once you exhaust this amount, your pet is no longer insured.

Maximum Annual Payout

This is the maximum amount you can reimburse for each policy year. Once exhausted, you have to pay out of pocket, until you renew the policy for the following policy year.

Maximum Payout per Body System

This is the maximum amount you can claim on every one body system.  This can be your pet’s digestive system, nervous system, musculoskeletal system and so on. Upon reaching a limit on a body system, you will not receive any further reimbursement.

Maximum Payout Based on a Pre-Determined Benefit Schedule

Some pet insurance policies provide you with a pre-determined list structure. This shows you the amounts payable on any claim. Pet insurers use either one maximum payout structure or a combination of several structures.

Premiums

Premiums refer to the amount of money you pay, monthly or annually, for your pet’s policy. This is determined by among other things, the kind of pet you have, the medical coverage you want on its policy, the co-pay and deductible you select among others.

Waiting Period

This is the period of time you must wait after buying insurance before you can make a claim. If an injury or illness happens, during this period, your pet is essentially not covered, and so you cannot make a claim. Also, there can be different waiting periods for certain medical conditions. There can also be one waiting period for illnesses and another for injuries.

Pre-existing Conditions

Pet insurance does not cover pre-existing conditions. These are any medical conditions that might have been present during the waiting period or at the time of the policy application.

What Does Pet Insurance Cover?

Each company has different internal policies regarding its scope of coverage. It’s therefore imperative to do an extensive pet insurance comparison before settling on an insurer. Some of the more common things pet insurance covers include:

• Injuries and accidents
  • Vet exam fees
  • Imaging services; MRI, cat-scan and ultrasound
  • Diagnostic treatments
  • Prescription medications
  • Cancer treatments
  • non-routine dental treatments
  • Surgery and rehabilitation

Some premium pet insurance companies cover behavioral therapies and loss and death resulting from illness.

Exclusions

One of the main areas to focus on when taking out a pet insurance is the exclusions. Here are some of the more common exclusions:

• Pre-existing and hereditary conditions
  • Grooming services and wellness care
  • Routine check-ups
  • Preventative care
  • Hip dysplasia
  • Cosmetic procedures

Calculations of Pet Insurance Premiums

A lot of factors go into the final figure of your premiums. Here are some of the consideration taken into account when calculating pet insurance premium.

Age

Premiums for older pets are naturally higher because older pets are more susceptible to diseases. When you insure a relatively younger pet, expect the premiums to gradually increase as they age.

Breed

Different dog breeds have different levels of risk. Insurers draw from historical and medical data to see which breeds cost the most to insure. This information is then reflected on the premiums.

Species

Larger animals tend to cost more to insure because they tend to have more health concerns and shorter lifespans. You will, therefore, for example, pay more to insure a horse than a parrot.

Location

You pay higher premiums if you live in a city with a high population density. This is perceived to increase the risk of illness and injury.

Deductible and base rates

A higher deductible results in lower premiums and vice versa. On the other hand, a base rate is an internally determined figure of how much individual policies should cost. This amount is set before adding animal specific considerations.

All these factors considered, the most prudent advice that you can also have is to ask for pet insurance quotes from multiple providers. In so doing, you’re better assured that the one you have is the best possible quotation, for the inclusions that it has.

How to Find the Best Pet Insurance Company

Now that we have answered the question “how does pet insurance work?”, here’s how to find the best insurer. Ask around for referrals for an insurer that your family and friends have used with no issues. With a few of these in mind, do more online research to see what the general public feels about the company. You want to look at its reviews to get a general idea. This should hopefully narrow your list down a bit more. At this point, you can contact the companies for quotes. From these quotes, look at what each company offers and at what cost and see which ones fit your budget. If you are like most pet owners, you probably want to know as much about your pet as you possibly can. Do you wonder what your pets sleeping position means? Check out this blog to find out.

Final Word

With this article, you should now be better equipped with everything that you need to know about pet insurance. Hence, you’ve got power on your hands, with the knowledge that you’ve gained. If you’ve long been thinking of how you can also protect your pets, and if you’ve got the money for it, then why not. Pet insurance may work to be a worthwhile investment for you. Just be sure that you get hold of nothing less than the best providers, such as those that you can trust.