How Does Pet Insurance Work? Get an Overview Here

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How Does Pet Insurance Work?

If your pet gets seriously sick or injured and you’re presented with a huge bill. Can you pay it? Do you need pet insurance?

Imagine this….

You are outside watching your pup playing in the yard with his brother on a Sunday afternoon; chasing each other around and jumping around as dogs do.

All of a sudden you hear a yelp, you look over and one of your fur babies is limping his way over to you. You immediately go into panic mode. You check his leg but nothing seems to be broken, but he is whining and licking his leg. Ok, maybe he just pulled something. You decide to give it a little time and see if it gets better. It does not.

Since it’s a Sunday, you have no choice but to go to the Emergency Vet, but you dread it because you know it’s going to be expensive just to walk through the door.

Once there, they do x-rays and find out that your doggie has torn his ACL. You feel awful and know how much pain he must be in. You’re told that he needs to go to an orthopedic specialist in order to have surgery to repair it.

Obviously, this is a no-brainer and it needs to be done, but then you’re told how much it’s going to cost. Just for the surgery alone it will run $3,500.00 to $4,500.00, and that does not include the cost of the post-op recovery and rehabilitation.

One minute you’re watching your pups playing in the yard and the next minute you’re trying to figure out how you are going to come up with that much money to help your dog and still put food on the table for your family.

That is the reality of pet ownership.

Like with humans, dogs can get hurt or become ill at the drop of a hat. There is no way to know it is coming or when.

Just like health insurance for people, there is health insurance for pets. But what is it, how does it work and is it worth it? Let’s dive a little deeper into this and find out how pet insurance works.

golden retriever dog having his ear examined with text that states how does pet insurance work

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What is Pet Insurance?

Basically, pet insurance is a premium that you pay in order to help offset the cost of unexpected veterinarian costs that may arise. There are different tiers of coverage that you can purchase to cover everything from vaccines to major surgery to cancer treatment. As with insurance for humans, there are deductibles, co-pays and different levels of coverage depending on the plan that you pick.

How Does Pet Insurance Work?

Think of it as health insurance for pets. Your pet gets treatment, you pay the bill, then file a claim with the insurance company and you get reimbursed all or a percentage of the bill. That’s VERY generally put.

However, it is much more involved than that. But let’s stick to the basics for now.

Every month you pay a premium, just like with most other types of insurance. You then submit your bill to the insurance company for a partial or full reimbursement, depending on your plan.

Typically you will need to pay an annual deductible before the insurance company will begin to cover any costs. So, for example, if you have a $1,000.00 deductible. That amount must be paid out-of-pocket before that insurance kicks in.

Once you’ve met that deductible, then you will have co-insurance. Co-insurance is typically when your insurance provider and you are both responsible for paying a portion of your vet’s pet bill.

Typically, the insurance will pay 80% of the bill and you are responsible for that additional 20%. Each insurance company will vary, but it usually takes approximately one to two months to receive reimbursement for the treatment.

little black and brown dog at the vet with text that says pet insurance get an overview here

3 Tiers of Coverage

There are typically three (3) tiers of coverage and within each tier many insurers will offer different levels of options coverage.

  • Accident only (basic) coverage
  • Accident and illness (comprehensive) coverage
  • Wellness (preventative) coverage

Is There a Waiting Period?

Every provider will have a waiting period, but how long and under what conditions are exclusive to each one. This is something that you will want to check on with any potential insurance companies that you are looking into.

Common waiting periods are:

  • 24-48 hours for accident coverage.
  • 10-30 days for illness coverage.

What Does Pet Insurance Typically Cover?

Remember I had said that there were basically three tiers of coverage, the Wellness Coverage, the Accident Coverage and the Accident and Illness Coverage.

So let’s get into more specifics as to what pet insurance will typically cover.

Please keep in mind that every insurance company is different so this is just a general guide. You will need to check with any insurance provider that you are looking into to see what are covered treatments and procedures, as they will vary by policy type and policy cost.

Here is a list of typical procedures that pet insurance will cover:

Wellness Coverage:

  • Spaying/neutering
  • Annual checkups
  • Vaccinations
  • Flea and tick control
  • Heartworm prevention
  • Certain tests
  • Teeth cleaning

Accident Coverage:

  • Bloat
  • Foreign body ingestion
  • Hit by a car
  • Torn cruciate ligament
  • Poisoning
  • Cuts and lacerations
  • Prescription drugs (for a covered event)
  • Insect/snake bites
  • Eye injuries
  • Sprains
  • Broken bones

Accident and Illness Coverage:

  • Breed-specific conditions
  • Cancer treatment
  • Chronic conditions
  • Diagnostic testing and imaging
  • ER and specialist care
  • Surgery hospitalization, nursing care
  • Prescription drugs (for a covered event)
  • Dental illness

What Does Pet Insurance Not Cover?

Please use this only as a guide. Always check with your provider for a full and complete list of exclusions.

  • Pre-existing conditions (always discuss this in length with the provider so that you are clear on what is considered pre-existing).
  • Typically, pregnancy or birth.
  • Death or theft of a pet.
  • Some vet exams, prescriptions or certain tests.
  • Some dental can be limited or excluded.
  • Bi-lateral conditions (ie. ligament issues, cataracts, hip dysplasia). Insurance companies will typically only cover one side – not both.
  • Preventable diseases due to not being vaccinated.
  • Events that are typical of a specific breed due to being predisposed (ie. diabetes or ligament injuries).
  • Age. Typically insurance providers will not write new policies for pets younger than 8-weeks old or older than 14 years old. If coverage is provided for older pets, the premiums will be much higher.
  • Elective procedures. Tail docking, ear cropping, declawing, or dewclaw removal.
  • Non-vet services (food, nutritional supplements, boarding, transportation, grooming).
  • Treatment that was covered in prior insurance terms may no longer be covered when a policy is renewed.
  • Some rehabilitative treatments or therapy may be excluded.

How Much Does Pet Insurance Cost?

The following factors are taken into consideration when deciding on premiums for your pet. Remember that each company sets its own pricing:

  • Coverage can increase based on your pet’s breed. Purebreds cost more to insure because they are prone to more hereditary conditions than a mixed breed.
  • Plans can cost more as your pet gets older. You should get pet insurance for your dog as soon as possible as the younger they are, the less likely they are to have pre-existing conditions, and the more affordable the insurance will be.
  • Where you live.
  • Price can depend on your annual limit, deductible, and the reimbursement percentage when you sign up for coverage.

That being said, here are some cost averages for pet insurance:

Again, please keep in mind that each company and tier will be different based on your needs and circumstances.

Wellness coverage – $20-$25 per month.

Accident-only coverage – $11-$16 per month.

Comprehensive (accident and illness) coverage – $49.00 per month.

Is Pet Insurance Worth It?


  • Able to choose the vet of your choice (most insurance companies allow this)
  • The policies are simple.
  • The premiums are very affordable.
  • Can bring peace of mind knowing that your pet will be taken care of in the event of an emergency.


  • Does not cover pre-existing conditions.
  • There is a waiting period before coverage begins.
  • There is a maximum payout limit.
  • Must pay out-of-pocket upfront.
  • There is always the possibility that you may never need it so the premiums paid will never pay off.
  • It’s possible that you may pay more out-of-pocket than the insurance pays for any given event.
  • If your pet has not seen a veterinarian in over a year, they may be required to have an exam before being issued a policy.
  • Exclusions will out-number covered conditions.
  • As there is a waiting period between the time that you sign up for pet insurance and it is activated (ie. the waiting period), if your pet gets sick between that time period, it will be considered pre-existing and any subsequent treatment will not be covered.

Some Questions to Ask When Looking at Insurance Companies for Your Pet’s Insurance.

  1. What are the exclusions to the policy? This is very important because as I mentioned before, it seems like the exclusion list is much longer than the covered list.
  2. What is the waiting period?
  3. What is the deductible? Is it set on a per-incident basis or annual?
  4. What is my share of co-insurance?
  5. Is there a cap on insurance payouts?
  6. What is the maximum payout limit?
  7. Can I see any veterinarian that I want?
  8. What are the monthly/yearly premiums?
  9. Will rates change in the future? Rates may increase if your pet makes a claim in a given year.
  10. Is there an age cut off?

Here is a list of the most popular Pet Insurance Companies

Where Should You Start?

Most insurance company’s websites have the option of submitting your information to receive free quotes, so take advantage of this. This will give you a starting point. Remember, the cheapest or most expensive options may not give you what your pet needs, so be sure to do your research before making your decision.

Final Thoughts

Whether pet insurance is right for you is a personal decision based on emotional and financial factors. Personally, I have had some pretty hefty vet bills and wished I had pet insurance.

On the other hand, I’ve had pets that lived long, uneventful lives, and it would have been a waste of money to pay monthly premiums as I never would have received the benefit of it.

But how do you know? You don’t….

One alternative to getting pet insurance is to open up a savings account that is to be used strictly as a vet fund.

The downside of doing this is that it would be very easy to tap into that account if you run into financial difficulty in another part of your life. You also run the risk of your pet needing treatment for an injury or illness before you’ve saved enough to cover the costs.

You can also ask your vet for their thoughts and recommendations.

Let me know what you think. Is pet insurance something that you have or would think of getting? If you have it, what do you think about it? Has it been beneficial to you? What pet insurance do you recommend and why?

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