Exploring Different Types of Pet Insurance

It’s not the only factor, but the type of pet insurance you buy will impact your happiness with the coverage.

So let’s look at pet insurance policy types to make sure you’re making the right choice for your furry (or feathered) companions.

Three Primary Types of Pet Insurance

You can tinker with the nuts and bolts of any pet insurance plan, decreasing deductibles or increasing coverage caps.

But an accident only plan will not pay for your pet’s routine wellness visits any more than a dachshund will purr like a kitten.

How you plan to use your insurance should help you choose a type of pet insurance policy:

#1 Comprehensive Pet Insurance

This most complete kind of pet insurance should cover accidents and illnesses.

• Accident Coverage: Should help if your pet swallows a foreign object, such as a weather-beaten tennis ball, or if your pet breaks a bone.
• Illness Coverage: Should help if your pet develops an illness such as diabetes, cancer, an infection, or a variety of other conditions. Don’t expect your pet insurance to pay if your pet already has the illness before you buy the coverage. In insurance lingo, this is called a pre-existing condition.

Because it covers a wider variety of situations, comprehensive pet insurance usually costs more.

#2 Accident Only Pet Insurance

You can save money with accident-only insurance which would pay for treatment resulting from an accident.

If your cat gets bitten by another animal or if your dog breaks a leg falling off the bed, your accident-only pet insurance could help reimburse you for the cost of treatment.

Most accident-only pet insurance policies also help pay after an accidental poisoning.

If your dog finds a few grapes or gets into the chocolate pudding you accidentally left on the coffee table, your accident only coverage could help insulate you from the huge vet bill.

#3 Wellness Pet Insurance

Wellness pet insurance can help you pay for routine visits to the vet for annual exams, vaccinations, dental work, prevention of parasites, fleas, and ticks, and some diagnostic tests such as fecal analyses.

Wellness coverage — also known as preventive care coverage — does not protect you from unexpected pet care expenses such as a newly diagnosed illness or treatment after an accident.

Unless you anticipate spending more on preventive care than the annual premium for your pet’s wellness policy, this kind of coverage isn’t a good value.

Also, because you know you’ll be spending money on preventive care, you could simply budget and save for this expense rather than paying insurance premiums.

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Choosing Your Type of Pet Insurance

It’s possible, of course, to combine types of pet insurance. If you go all out on preventive care and would like some help paying for it, you could buy a wellness policy along with a comprehensive or accident-only plan.

But the point of any insurance, including pet coverage, is to protect your wallet from unexpected expenses. To get the most out of your pet insurance plan, consider your pet’s specific needs:

• Very Young Pets: Puppies, kittens, and other baby pets may do just fine with an accident the only plan. Chances are better your young and energetic animal will get into mischief that could lead to an accident. Likewise, young pets are less likely to develop chronic illnesses which a more expensive comprehensive plan would cover. Many companies require your pet to reach a certain age — 6 to 8 weeks, for example — before approving coverage.
• Pets in Their Prime: As your pets enter adulthood, you’ll likely get more value out of a comprehensive plan in case they develop an expensive-to-treat illness. Remember, you can’t get coverage for illness after symptoms appear.
• Geriatric Pets: As they reach their later years, pets are more likely to develop expensive health conditions. Having illness coverage in place through a comprehensive pet insurance policy could save you thousands of dollars or prevent you from having to let finances decide whether you should treat or put down your companion.

Know Your Breed: Some kinds of dogs are genetically disposed to developing certain illnesses such as diabetes or osteoporosis by certain ages. You can save money by anticipating this diagnosis and having comprehensive coverage already in place.

Read more: Best Pet Insurance Rates for 3 Year Old, 4 Year Old, And 5 Year Old Dogs

Ways to Customize Pet Insurance

After picking the best pet insurance type for your companion, you’re ready to customize the details of your plan and choose an insurer that meets your needs.

For most consumers, I recommend looking at Healthy Paws insurance for the most comprehensive care and lifetime coverage. If you need niche coverage, another leading insurer may meet your needs. (For more information, read our “[CASE STUDY] Why I Bought Pet Insurance from Healthy Paws“).

As you compare insurers, make sure you’re addressing these questions:

Deductibles

Just like with human health insurance (and auto and homeowners coverage) you can save money on your pet insurance by opting for a higher deductible.

Just remember: You’re responsible for paying for all your pet’s care up until you reach the amount of the deductible. Setting a too-high deductible can prevent you from using your insurance.

Spending Caps

On the other end of the spending spectrum from deductibles, many pet insurers cap annual or lifetime payouts. Lower spending caps lead to lower premiums. These limits usually come in four different types:

• Lifetime Limits: Caps lifetime spending of any type on your pet.
• Annual Limits: Caps spending of any type per year on your pet.
• Per-Incident Limit: Caps spending per diagnosis or per accident on your pet.

A policy like Healthy Paws, which does not limit lifetime spending, offers the most value. A policy with lifetime limits would be rendered useless after you reach the limit.

Reimbursement Levels

Pet insurance pays a percentage of covered expenses, usually ranging from 60 percent to 90 percent.

You can save on premiums by opting for a lower reimbursement level. But you’d be responsible for more out of pocket.

As usual, find a balance you can live with.

Exclusions

Your policy won’t cover every accident or medical condition your pet develops. Likewise, your plan won’t cover every treatment option you choose. For example, few policies will cover acupuncture or alternative medicine. Some won’t cover hospitalizations.

Insurance doesn’t usually cover pet dental issues unless you opt for a rider that will increase your monthly premiums. (Many insurers will cover dental expenses if they result from a covered accident, however.)

If you’re worried your pet will develop a specific condition, make sure that condition isn’t excluded from coverage before activating the policy.

Waiting Periods

The majority of pet insurance companies require new policyholders to complete a waiting period before filing a claim.

The best coverage requires only a 24-hour waiting period for accidents. Expect longer waiting periods for illness coverage.

These waiting periods can vary from state to state. Again, read your policy carefully to make sure you’re getting the coverage you need.

Enrollment Age Requirements

As I said above, most companies require your pet to reach a certain age — usually measured in weeks — before extending coverage.

Likewise, insurers won’t approve coverage for pets after they’ve reached a certain age which varies from pet to pet and from state to state.

If you’re thinking about getting pet insurance and your pet is advancing in years, you may need to take action sooner to get covered before your pet reaches the maximum age.

How Pet Insurance Pays

Since human health insurance usually pays your doctor or hospital directly, many pet insurance shoppers expect the same of their pet coverage.

Unfortunately, it doesn’t usually work that way. Instead, you’ll need to pay for your pet’s care upfront and then file a claim for reimbursement from your insurance company.

The insurance company should pay based on the reimbursement level specified in your policy. For example, if your policy pays 80 percent, here’s a possible scenario:

1. Your pet runs up a $5,000 bill for an unexpected surgery to remove a swallowed sock.
2. You file a claim on your comprehensive or accident-only pet insurance.
3. Based on an 80 percent reimbursement rate, you’ll be eligible for $4,000 from the insurance company. The best policies pay within 5 to 7 days.
4. Your deductible will be taken out of the reimbursement. If you have a $500 deductible, you’ll receive $3,500 and be responsible for the remaining $1,500.

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Is Pet Insurance a Good Value?

Even the best pet insurance won’t completely insulate you from all unexpected costs associated with your pet.

But avoiding some of the costs from an expensive and unexpected veterinary procedure can still make a huge difference to your monthly budget.

And when you consider you can have this coverage for $40 to $60 a month, you can see why pet insurance has been growing in popularity for the past couple of decades.

As you compare policies, make sure the plan you’re considering fits your pet’s age and breed. Avoid paying for coverage you don’t need, and take the time to read the fine print: Your policy’s details hold the key to its value for your pet.

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