How Does Pet Insurance Work? Types of Pet Insurance

Pinterest LinkedIn Tumblr
Advertiser Disclosure

This blog post may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.

Pet Insurance and How It Works

We all know how much joy our pets can bring us, and studies have shown that people with pets tend to live longer than those without. Pets will need medical attention at some point in their lives, and if they develop an ongoing condition, the cost of having your vet treat it effectively can quickly mount up. Pet owners used to have to give up their beloved pets if they couldn’t afford to pay for their medical care, and this was a sad reality for many. However, this isn’t always the case anymore. In recent years, pet insurance has become a lot more popular than it was in the past, and there are many types of pet insurance. Learn more about the different types of pet insurance here.

Your pet’s health is just as important to you as it is to them, and just like with human insurance, pet insurance will reimburse you for certain medical expenses in the event that your pet is ill or injured. However, pet insurance does not always cover the same things that your own insurance would, and you may find yourself required to pay a deductible or a percentage of the bill if you opt for this type of coverage. Preexisting conditions and common illnesses are often excluded from pet insurance policies, just like in human policies. Many pet owners, however, believe that a $45-a-month premium is well worth it in order to avoid the difficult decision of whether or not to treat their pet or allow them to die of illness.

How Does it Work?

Most providers of pet healthcare insurance will require that your pet be examined by a veterinarian for a report on their overall health, along with a waiting period before the activation of coverage, which can result in being declined coverage if you are the owner of a breed that comes with known chronic conditions. In the event of an accident, however, this waiting period might be short, perhaps only a few days. For example, if you get a policy for a dog that is prone to hip dysplasia like a German Shepherd, coverage might take a week to begin. However, if your cat breaks a leg jumping out of a tree, coverage might only need a few days to gain approval.

Your pet’s medical bills will be paid in full at the veterinarian, and then you will submit a claim to the insurance company, which will evaluate the situation and reimburse you if it falls within the policy’s approved directives. This differs from the way health insurance works for you, where you show your insurance card to the doctor and then receive a bill for your portion of the payment. Insuring your pet’s well-being typically includes the following features:

  • A deductible is a certain amount that you are required to pay before the insurance will begin covering the cost of medical expenses. It is usually a certain amount per year and can be up to $1000.
  • Reimbursement percentage, which is a certain percentage of the bill that will be paid by the insurance company after the deductible is paid, which can be anywhere between 50% and 100%.
  • Your pet’s annual maximum, which will be the maximum amount your insurance will pay for your pet’s medical bills each year. Anything over that, you will be required to pay.

What to Expect

Most pet insurance policies will not cover a few conditions, such as dental disease, hereditary conditions, routine check-ups or preventative care, grooming or behavioral issues, or in some breeds, hip dysplasia. Most insurance policies will cover accidents or illnesses, and some will cover pre-existing conditions, though not all. Some pre-existing conditions are covered if they are curable.

Your pet’s species will determine how much you have to pay for insurance, as dogs usually cost more than cats to insure, and male animals also usually incur higher premiums. Larger breeds are usually more costly to ensure as they tend to have shorter lifespans, and younger pets will always be cheaper to ensure than older ones, usually due to having fewer health conditions that can be brought on by age.

Additionally, many types of pet insurance policies allow you to customize your coverage by adding on optional extras, but this usually results in an increase in your monthly premium. Add-ons may include exam fees, prescription food, or routine medical exams. These are only a few examples.


You should weigh your options before deciding whether or not to purchase pet health insurance. If your pet is never ill or injured, purchasing pet health insurance may not be more cost effective than not purchasing it at all. In addition, the level of protection you need can vary depending on the specific needs of your pet. For those who own a breed known for having health issues later in life, the cost of avoiding the difficult choice of saving money and aiding their pet in a treatable medical condition outweighs the risk of losing them to an otherwise treatable condition.


Should I get an annual deductible or a pay-per-incident deductible?

Depending on your circumstances, one really doesn’t have an advantage over the other. It should mostly depend on what you would be comfortable paying in the future, should the need arise. An annual deductible would be better if your pet has a chronic condition that will require several vet visits in the coming year. But if your pet is young and relatively healthy, a pay-per-incidence deductible will be better. Keep in mind that lower deductibles will usually come with higher premiums.

What is a “cap” on benefits?

This is the amount that an insurance policy will cover before it will no longer cover anything else. It might be a limit on the number of claims per year or the amount of accumulated costs per year. There might also be a maximum payout for a lifetime, meaning that if your pet incurs this amount halfway through its life, insurance will no longer cover anything for as long as it lives. Be wary of such policies as these.

What are hereditary, congenital, and pre-existing conditions?

Hereditary conditions are those that are inherited from the parents, which can include diabetes and hip dysplasia. Congenital conditions are not inherited, but instead happen when the organism is still unborn and developing, such as heart defects or cleft palates. Pre-existing conditions are any conditions documented on a health record that existed before the pet got insurance.

Become an Insider

budget planner template printable

Subscribe to get a free daily budget planner printable to help get your money on track!

Make passive money the right way. No spam.

Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned and has not been endorsed by any of these entities. Opinions expressed here are author's alone

The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.

Write for Us

FangWallet was created to make financial knowledge easy-to-read and accessible to the masses. Personal finance. Understood.

Write A Comment

Pin It