Pet Insurance: How it Works & What it Usually Covers

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The thought of a life-saving treatment for your kitty or pup costing more than you can afford is heartbreaking. Could pet insurance be the answer? Learn about the most common types of pet insurance, the benefits of pet insurance, plus alternatives to help you finance your pet's medical care.

How Pet Insurance Works

Gray, black striped kitten lying on tile floor.While you probably consider your pet to be part of the family, legally speaking, pets are considered personal property. Pet health insurance is a form of property insurance that works more like auto or homeowners insurance than human health insurance, says the North American Pet Health Insurance Association (NAPHIA).

Here's how it works: When your pet needs a procedure that's covered by your policy, you pay for the treatment up front, then submit a claim to your insurance provider who will reimburse you for the cost of treatment. In addition to monthly premiums, your policy may also have a co-pay or co-insurance requirement, meaning you would pay a certain percentage out-of-pocket and the provider would reimburse you for the remaining cost.

Types of Pet Insurance

You can typically choose only one type of coverage, but depending on the insurance provider you may be able to combine different types. The more comprehensive your pet's coverage, the more you should expect to pay in premiums.

There are three main types of pet insurance in North America:

  • Accident insurance: Covers treatment for injuries that occur accidentally or unexpectedly
  • Illness insurance: Covers treatment for sickness, disease and other health challenges
  • Wellness insurance: Also sometimes called Routine or Preventive Care, this covers routine procedures including vaccines, dental care and certain tests.

Depending on the provider, additional types of coverage may also be available, says NAPHIA. These include:

  • Coverage for emergency veterinary care while traveling outside of the country
  • Liability coverage if your pet injures someone or damages property
  • Coverage for the cost of pet care if you're hospitalized or incapacitated
  • Coverage for the cost of a vacation if it's canceled due to your pet needing emergency surgery
  • Coverage for reward money and advertising if your pet goes missing

What Pet Insurance Doesn't Cover

Woman holds brown French bulldog in arms as dog cox head backwards sticking out tongue.Pet insurance doesn't cover preexisting conditions, says NAPHIA, and there's usually a waiting period of up to 30 days after purchase before your policy kicks in — any illnesses or injuries sustained during that time won't be covered.

The benefits of pet insurance don't typically include spaying, neutering or any costs associated with pregnancy and delivery.

Choosing a Pet Insurance Plan

Your pet's breed, age, weight and current health are all factors that will impact your policy and premiums.

While shopping for pet insurance, you should consider any predispositions your pet's breed may have toward chronic illnesses, such as epilepsy, diabetes, arthritis, cancer or heart disease.

You'll also want to ask your vet about the cost of common tests and treatments to help you determine the type and amount of coverage you need.

Alternatives to Pet Insurance

If your pet is healthy and rarely needs more than routine care, paying monthly premiums might feel like a waste of money. Or, maybe your financial position limits the type of coverage you can afford. If either of these is the case, you might consider alternatives to insurance, such as:

  • Placing the money you would have spent on premiums into a savings fund dedicated to pet health emergencies
  • Opening a line of credit with a company that offers periods of interest-free financing for veterinary care
  • Shopping around for a vet who offers a wellness plan, which The Spruce Pets says would allow you to make a down payment and then pay out the cost of routine and preventive care over time — just keep in mind that such a plan wouldn't cover illnesses or injuries.

Pet insurance may help you save money over your pet's lifetime, and provide the peace of mind that comes with knowing you'll be able to meet all of your companion's health needs. But it's not for everyone. It's important to consider all of the costs and benefits of pet insurance to decide if it would be a worthwhile investment for you and your furry friend.

Contributor Bio

Jean Marie Bauhaus

Jean Marie Bauhaus

Jean Marie Bauhaus is a pet parent, pet blogger and novelist from Tulsa, Oklahoma, where she usually writes under the supervision of a lapful of furbabies.