According to the North American Pet Health Insurance Association (NAPHIA), the number of pets insured in the United States grew to 5.36 million in 2022, up from 4.4 million in 2021. Of those insured pets, 80.1% were dogs and 19.9% were cats. Most owners chose comprehensive insurance plans, with 92.8% of pets being covered by accident and illness plans or embedded wellness plans.
While still a relatively young industry, pet insurance can benefit families by absorbing some of the veterinary costs associated with pet ownership. But what does pet insurance cover? And how does pet insurance work? Find out more about pet health insurance below to determine if it’s worth it for your furry family members.
Pet insurance is a health plan the owner pays into on a monthly or annual basis in exchange for reimbursement of eligible veterinary expenses. When a pet is seen by a veterinarian for a covered condition, the owner pays the vet in full and then submits a claim to their insurance company for reimbursement, which is dictated by the terms of the policy. Most pet insurance plans are for dogs and cats, but a few pet insurers offer coverage for other animals. Nationwide offers policies for birds, reptiles, and other exotic pets, while ASPCA Pet Health Insurance has plans that cover horses.
There are typically three types of pet insurance plans to choose from.
An accident-only plan will reimburse for eligible veterinarian bills related to accidents such as broken bones or swallowing foreign objects.
An accident and illness plan includes both types of veterinary care, giving the owner more broad protection but at a higher cost. Illnesses may include infections, cancer, arthritis, diabetes, and allergies.
Routine wellness or preventative care plans, offered by some carriers as an optional add-on or separate plan, provide reimbursement for things like immunizations, flea treatments, and spay/neuter.
Deductibles, coverage limits, premiums, and the like can vary by insurer. Learn more about various pet insurance plans and companies in our Best Pet Insurance Companies ratings.
Pet insurance works mostly on a reimbursement basis. This simply means that you pay the vet up front and then file a claim for the reimbursement of eligible expenses. Some companies, like Trupanion, partner with certain veterinarians, paying them directly so you’re only responsible for paying ineligible costs out of pocket.
When purchasing a pet insurance policy, you choose a deductible, a reimbursement percentage, and an annual limit, which all impact your premium and the maximum amount you can recover.
Deductibles
Your pet insurance deductible is the amount you pay out-of-pocket for veterinary care before your insurance kicks in. Pet insurance is similar to other types of insurance in that your deductible can affect how much you pay in monthly premiums. As a general rule, the higher the deductible amount, the lower the premium.
Deductibles for pet insurance typically come in two forms – annual or per incident. Per incident means you will have a new deductible to meet each time your pet develops a new condition. An annual deductible works similarly to human insurance – once you’ve met the deductible in a given year, insurance will pay out the rest (less your reimbursement rate).
Reimbursement rates
After you’ve met your deductible, the reimbursement rate is the percentage of your vet bills that your insurance company will cover. These usually range between 70% and 90% of the cost of care, with some providers offering as low as 50% and others offering as much as 100%. The higher the percentage you select, the more you will be reimbursed for your pet’s care. Remember that a higher reimbursement rate can lead to higher premium payments.
Annual limits
Pet insurance policies typically have an annual coverage limit, or the maximum amount you will be reimbursed over 12 months. These limits vary widely between insurers, ranging from around $2500 to unlimited coverage (although those with unlimited annual coverage may set a lifetime limit).
Similar to the reimbursement rate, the higher your annual limit, the higher your premium. Annual limits do not roll over, so if you didn’t meet your limit in a given year, it doesn’t carry over to the next.
Claims process
Although claims filing and reimbursement processes can vary, it generally works like this:
Schedule a vet appointment.
Take your pet to see the veterinarian.
Pay for the veterinarian bills in full.
File a claim online or through the pet insurer’s mobile app and include a copy of the bill.
Once the pet insurance company approves the claim, receive your allowable reimbursement via direct deposit or paper check in the mail.
The review and approval process can take a few days, a couple of weeks, or even a month, depending on the company, the policy, and the scope of the accident or illness.
Most pet insurance plans work on a reimbursement basis, so you can use your coverage with any licensed veterinarian, specialist, or emergency clinic of your choosing. Unlike human health insurance, pet health insurance doesn’t have provider networks. However, some companies may have certain requirements to meet in order for veterinarian bills to be eligible for reimbursement.
What pet insurance covers depends on the plan you choose:
Accident only: Covers veterinarian costs for accidents, such as swallowing objects, getting bitten by another animal, broken bones, and lacerations.
Comprehensive plan: Covers accidents and illnesses, potentially including allergies, cancer, hereditary conditions, surgery, hospitalization, breed-specific conditions, and arthritis.
Routine care: Covers preventative costs, like dental cleaning, vaccines, annual checkup exam fees, blood work, and spaying or neutering, and is also called a pet wellness plan.
No matter which pet insurance plan you choose, pre-existing conditions are typically excluded from coverage. However, some companies have a waiting period for some pre-existing conditions and will provide coverage if your pet is symptom-free for a set amount of time, such as six or 12 months. Other companies will not provide any coverage.
Pet insurance plans typically have a waiting period for accidents and illnesses. The waiting period is the time between the policy being activated and the coverage taking effect. For example, if a policy has a 14-day waiting period for illnesses and your policy takes effect on the first of the month, illness visits aren’t eligible for reimbursement until the 15th.
Waiting periods for accidents and illnesses are relatively short compared to those for pre-existing conditions. Although you can’t bypass the waiting periods, the earlier you get your pet covered, the less likely you’ll have a claim denied due to the waiting period and the sooner you may have coverage for pre-existing conditions.
Most pet insurance companies only cover cats and dogs, but there are some companies that cover other types of pets as well. Nationwide has avian and exotic pet insurance, which covers small mammals, birds, reptiles, and amphibians. ASPCA offers pet health insurance for horses.
The main veterinarian costs not covered by pet insurance are pre-existing conditions, non-vet related costs, and regular care, unless you have purchased a routine or wellness plan. Specific examples include:
Cosmetic procedures such as ear cropping, removing dew claws, and tail docking
DNA testing
Accidents or illnesses caused by fighting, racing, cruelty, or neglect
Elective procedures
Preventative procedures
Experimental treatments
Everyday costs of owning a pet are also not covered, like pet food, toys, vitamins, grooming, and boarding fees. However, some carriers, like Embrace, will cover prescription food if you have a wellness plan. There are also some carriers, like Fetch, who may cover boarding fees if the policyholder has to be in the hospital for an extended period of time, typically four or more days.
Preexisting conditions
Pet insurance companies generally do not cover pre-existing conditions. These include conditions your pet was diagnosed and treated for, and those that your pet simply showed symptoms of.
A few pet insurance providers will look at preexisting conditions and discern between those that are curable and incurable. If a condition is deemed curable, providers may cover it in the future, provided there’s been no recurrence of the condition in a set period. For example, Embrace will cover curable conditions if recurrence is at least 12 months from the last episode.
You can still get pet insurance coverage if your pet has a preexisting condition – just plan that your pet won’t be covered for that particular illness or injury.
Waiting periods
A waiting period is the time frame between opening a new policy and when coverage officially begins for accidents and illnesses. Waiting periods for accidents and illnesses usually differ, and the amount of time will vary between pet insurers. Most waiting periods range between 24 hours and two weeks. Some insurers also have waiting periods of up to 12 months for cruciate ligament and other orthopedic conditions.
In 2021, the average premiums for accident and illness policies for dogs and cats were approximately $49 per month and $29 per month, respectively, as reported by the North American Pet Health Insurance Association (NAPHIA). However, you may find a pet insurance plan that fits your needs for much less.
According to our Best Pet Insurance Companies rating, Lemonade offers the cheapest insurance for dogs with a sample monthly cost of $19.44 and for cats with a monthly cost of $11.00. The most expensive companies, on the other hand, are Nationwide for dogs at $56.74 per month and Trupanion for cats at $30.88 per month.
Factors that impact pet insurance premiums
There are several factors that impact how much pet insurance costs, including:
Your ZIP code. The cost of veterinary care in your area can affect your annual premiums.
The type of pet you have. The species you insure will have unique risk factors that insurers take into account. Commonly, cats are much cheaper to insure than dogs.
Your pet’s age. Older pets are considered to be at higher risk for accidents and illness, which can affect your rates.
Your pet’s breed. Some pet breeds are predisposed to certain health conditions, which can increase the cost of insuring them. For example, French Bulldogs are prone to respiratory issues and, therefore, have a higher risk of needing veterinary care and of their owner filing a claim.
Your pet’s size. Your pet’s weight can affect your premiums. In general, larger animals are more costly to cover.
Deductible. A higher deductible may lower your monthly premiums, but you’ll need to pay more out-of-pocket before your insurer will begin covering your veterinary costs.
Reimbursement rate. The reimbursement rate is the percentage at which your pet insurance provider will reimburse your veterinary costs, typically ranging between 70% and 90%. Lower reimbursement rates often result in lower premiums.
Coverage. The type of plan you select can impact your costs. Accident-only plans tend to be the most affordable, but the least comprehensive.
Annual limit. Some insurers allow you to customize the annual limit for your pet. Lowering your annual limit can reduce your premiums.
Add-ons. Any optional coverages you purchase to supplement your standard policy, such as a wellness plan or vet exam coverage, will increase the cost of your policy.
Your pet insurance provider. Some insurers are more expensive than others, so it can be helpful to shop around until you find the best price for your needs and budget.
Whether you need pet insurance is up to you. When considering the cost of vet care versus average pet insurance premiums, pet insurance may be worth it for your pet, family, and financial situation.
For example, you could pay $3,000 or more if your pet is hospitalized. If you are paying $30 a month, or $360 per year, for pet insurance, then you may be coming out ahead. In this scenario, you would have to pay your pet insurance premium for just over eight years to make a $3,000 hospitalization claim not worth it.
Additionally, having a breed that is more susceptible to certain health conditions, such as hip dysplasia, can result in more vet or specialist visits and, thus, more expenses that may be reimbursed by a pet insurance plan.
If you already have a vet that you work with and trust, it may be worth taking the time to ask about expected costs for certain procedures for accidents or illnesses. Compare those costs to various quotes and reimbursement percentages from pet insurers to help you decide if you need pet insurance.
Is pet insurance worth it?
While you can budget and save for routine pet care, it can get expensive. Throw in a medical emergency that requires surgery or hospitalization, and you can quickly blow through your savings, ending up in massive debt.
Paying for these vet bills can add stress to an already difficult time. Without pet insurance, you may have to decide if you can afford certain treatments that could save your pet’s life, which can be heartbreaking.
Pet insurance can not only prepare you financially for emergency and standard care costs, it can also give you valuable peace of mind during a stressful time. Knowing your pet is insured may help you get your pet additional treatments that you couldn’t otherwise afford, and it allows you to focus on your pet’s health, rather than worrying about how you’re going to pay the bills.
Can my pet be denied coverage?
Yes, your pet can be denied coverage by an insurer. Some pet insurance companies have a cut-off age, beyond which they won’t insure a pet, while others don’t have an age limit. Similarly, some insurers may not cover every breed of pet, or may limit the number of pets that can be insured.
Pet insurance companies also typically do not cover preexisting conditions, and most companies’ standard plans don’t cover preventive care, though optional wellness add-ons can be purchased to help with vaccinations, dental cleanings and other services.
Does pet insurance cover medications?
Some pet insurance companies offer optional coverage, as an add-on to a standard policy, that can cover a range of medications for pets. This could include medicines used to treat conditions such as allergies, diabetes, cancer, arthritis, or anxiety and other behavioral issues.
Some standard plans that cover accidents may cover medications if they are part of treatment for a covered accident. Many insurance companies provide add-ons that help with the costs of preventive care, which can include vaccinations, testing, and other services aimed at keeping pets from becoming ill.
Do vets require insurance?
No. You do not need pet insurance in order to take your dog or cat to the veterinarian or to pay for veterinary care. If you have pet insurance, you can take your animal to any vet you like; there are no in- and out-of-network providers to worry about as with human health insurance.
Most pet insurance companies require policyholders to pay for care, then file claims to be reimbursed. The reimbursement amount depends on the terms of the policy, which include its deductible, reimbursement rate, and coverage limits. It is important, however, for policyholders to use a licensed veterinarian, and to be sure other requirements of their policy are being met.
Does pet insurance cover dental?
Dental care is typically considered routine and, therefore, is excluded from coverage under most pet insurance plans. However, some may cover dental extractions or surgery if resulting from a covered accident, such as your dog breaking a tooth while catching a toy and needing it surgically removed. Additionally, some companies with pet wellness plans cover dental cleanings.
Key Takeaways
5.36 million pets were insured in the United States in 2022, and most pet owners chose accident and illness plans for comprehensive coverage.
Most pet insurance plans will reimburse you after you pay the vet bills, but some plans, like Trupanion, partner with veterinarians and will pay your vet directly.
Depending on your pet insurance coverage, your policy may cover routine care, accidents, breed-specific conditions, and illnesses like allergies, cancer, and arthritis.
