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Health Care & Insurance

6 Things You Must Know About Pet Insurance

Premiums aren't cheap, but coverage can help defray the cost of big-ticket vet bills.

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1. Pet health care is pricey.

Veterinary care accounted for $14 billion of the nearly $56 billion Americans spent last year on their pets. One reason: Vets are recommending many of the same advanced medical treatments available to humans. To cover the escalating cost, pet owners are turning to
insurance. Pet insurance works a lot like human health insurance when you go out of network: You may take your pet to any vet, but you pay directly, then submit your claim. Policies cover illness and accidents, and many insurers now offer wellness riders to cover routine care, such as checkups, vaccinations, and spaying and neutering.

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2. But he’s your best friend.

Pet insurance probably isn’t a good deal if all your pet needs is routine care. What a policy buys you is peace of mind in case your pet has a serious illness or accident. And if you buy a policy when your pet is young, you minimize the chances of an illness being deemed a preexisting condition that won’t be covered. Older pets, especially those 7 to 10 years old, may not qualify for coverage.

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3. What to look for.

The average policy costs about $30 to $35 a month. The more expensive the policy, the more it will cover—for example, you can get accident-only coverage (say, if Fluffy takes a spill and breaks her leg) for $10 a month, but a comprehensive policy (including preventive care) with a $100 deductible and $15,000 annual payout limit could run $100 a month. There are about a dozen insurers to choose from, and it can be difficult to compare policies. Go to www.petinsurancereview.com for a rundown on each company.

4. What you’ll get back.

Only one company, VPI, uses a benefits schedule; for each diagnosis, there’s a ceiling on how much the company will pay. The upside is that premiums tend to be less expensive, and you know exactly what you will receive. The downside is that in more-expensive areas of the country, the schedule may not reflect what you’ll be charged. Most companies pay a percentage of the vet bill—typically 80% to 90%.

5. Know the ins and outs.

Preexisting conditions are never covered, which adds an incentive to purchase a policy before your pet has health issues. Hereditary disorders may not be covered, either. Read the fine print, or ask a company rep if you own a breed with known problems, such as hip dysplasia in golden retrievers. Pay attention to deductibles and maximums. Deductibles may be annual, per visit or per incident (you may have several vet visits for one illness). And a company may impose an annual maximum, a maximum per incident or a maximum over your pet’s lifetime.

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6. Discounts for members.

You may be able to cut costs with a membership plan. For example, Banfield Hospitals (a national chain associated with PetSmart) offers coverage for routine care starting at about $20 per month, with discounts of up to 20% on other serv­ices. Pet Assure offers a discount program at participating vet practices; $99 a year for dogs and $79 for cats gets you a 25% discount on all medical services, and family plans are available for those with multiple pets. If you don’t want to prepay, you could use a CareCredit health card at participating practices; it offers special financing options.