5 Big Questions You Have About Pet Insurance, Answered

Benjamin Stern's three-year-old French bull dog Jones spent his puppy years in and out of animal hospitals. Jones, Stern says, is prone to vomiting and aspirating. Like many French bull dogs, Jones suffers from breathing problems, which required him to be placed on ventilators at least five times in his short life. "Without pet insurance, we would've had to made the hard choice of what to do about affording the constant health care Jones needs," Stern says. "The first ER procedure had been $10,000, and he takes four medications three times a day. We [Stern and his wife] love Jones and are very thankful to have had insurance for him soon after we'd brought him home as a puppy." Overall, caring for Jones has cost Stern $150,000 in vet bills, but pet health insurance has helped to cover 90 percent of the cost, relieving much of the financial worry. "We've been able to focus on keeping our Jones as healthy as possible so that he can live a long life."

Like human health insurance, pet insurance can help to cover some or most of the expenses that a pet owner can incur when caring for the lifetime of their pet. But knowing which type of insurance to get and how to navigate the pet insurance market can be confusing. We talked to two pet health insurance companies and referred to the North American Pet Health Insurance Association (NAPHIA) to get the best information on finding the right pet insurance for you and your pet.

1. What types of health insurance are available for pets?

Different insurance companies offer different products. According to NAPHIA, the main types of insurance products offered are, as follows: accident only, accident and illness, insurance with embedded wellness and endorsements (or riders, such as wellness or cancer endorsements). "We offer accident-only coverage, which includes covering injuries from playing or from ingesting something," says Liz Watson, the chief marketing officer at Hartville Pet Insurance Group in Hartville, OH. "And we have a complete coverage option that includes the accident coverage but also covers illnesses, chronic and hereditary conditions and more."

Wellness riders, which cover the costs of exams and vaccines, can also be added to most pet health insurance plans. According to the NAPHIA State of the Industry report, 1.6 million pets were insured by the end of 2015 with 97 percent of pets in the United States covered by an Accident and Illness (complete coverage) plan. Always make sure to check what the plans cover and the level of coverage the plan will provide.

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2. How much are the premiums and what determines the cost of the premium?

The premium rate is based on the species of the animal, breed, age and zip code. Typically, there is a slight difference in cost whether you're insuring a dog or cat but that has to do with any differences in the kinds of veterinary services that each animal will require. "In general, you'll get the same coverage but the premium will vary," says Watson. "You'll also want to look at the deductible options because a higher deductible will mean a lower monthly premium, but you'll have to cover more services out-of-pocket first before the insurance starts paying." When looking at the options for the deductible, make sure to choose one that has an annual deductible versus an incident deductible. "With an annual deductible, once you meet it, that's it. The insurance will kick in for the rest of the year. But if you choose a deductible by incident, you'll have to meet the deductible each time you take your pet to the vet or clinic, which can really add up," Watson says.

In addition to the deductible, it's important to look at the annual limits on what your insurance will pay out for the year. Some insurance companies offer an annual limit of $5,000-$10,000, while others will have no caps on what they'll pay for after you've met the deductible. In most cases, you will be able to customize your plans according to your budget by changing the deductible amounts or the annual limit caps. Factor in how much you would be likely to spend in vet bills versus how much the premiums cost. A higher premium with a lower deductible could save you a lot of money in the long term if you have a pet known to have health problems, like a French bull dog. Some insurance companies also offer a multi-pet discount, so make sure to check with the companies to determine if the plan is right for you and the needs of your pets.

3. How does pet health insurance work?

In most cases, you will take your cat or dog to the vet and pay for the costs of care upfront. "Next, you'll submit an invoice to the insurance company for reimbursement," says Watson. "In many cases, this can be done online and can include a direct deposit option." It can take up to 14 days to receive reimbursement if you file a claim online. Other pet insurance companies might even pay the vet directly, as is the case for Trupanion. Insurance companies will typically cover a percentage of the cost of the covered service, and many companies also cover a portion of the cost of prescription medications and food. Check to see what options your pet insurance company offers when it comes to filing a claim.

4. What isn't covered by pet health insurance?

Pet health insurance plans will not cover preexisting conditions. "A preexisting condition is a condition that your pet is being treated for right now or within the past 18 months," explains Dr. Sarah Nold, on-staff veterinarian for Trupanion, a pet insurance company. "This also means any conditions that have been diagnosed and treated during the waiting periods." Because of this reason, insuring your pet as soon as possible tends to be highly recommended. If your pet has gone 18 months or longer without being treated for a specific condition, then that condition could be classified as not preexisting and would be covered under a pet health insurance plan, as long as your pet doesn't need treatment for the condition again during the waiting periods. How the insurance company determines what counts as a preexisting condition will vary by company, so make sure to read the fine print on what they mean by "preexisting condition" before you sign up for a plan.

Other health costs that might not be covered by a pet health insurance plan include preventive costs, such as annual exams, parasite control or spaying and neutering. If you're looking for a health insurance plan that does cover these things, look for one that offers a wellness or preventative care option. What they'll cover in wellness will also depend on the company.

5. Can you see any veterinarian you want?

In most cases, you will be able to visit any veterinarian you would like to see. "We don't require a network of veterinarians," says Dr. Nold. "You can choose your vet, including specialists and even holistic vets." Some insurance companies might have a preferred network, however, so definitely make it a point to ask the insurance company if there are restrictions on where your pet can receive care.

Still have questions? Check out the NAPHIA Pet Insurance Buying Guide.