What’s the deal with pet insurance?

If you have a pet in your life, then you know how much joy and laughter pets can bring to our day to day. It’s not surprising that many people want to ensure that their pets live the longest and healthiest lives possible. To help achieve that goal, more Americans are starting to purchase pet insurance policies. The idea is that these policies will help cover potentially expensive veterinary costs, like if a pet has an accident and is seriously injured.  

There are many companies that provide pet insurance policies and the policies they offer can be different in a variety of ways. But the policies can be confusing and leave many consumers wondering if pet insurance worth the cost. And if it is worth the cost, how do you pick the policy and company that is right for you and your pet? So, today I want to help answer some of those questions.

Image by Helena for rawpixel.com

First, is pet insurance worth the cost?

Like many things in life, the answer is that it depends. If you have an older pet, a pet that has been ill previously, or certain breeds of pet you might find that insurance is not as worth the cost. This is mainly because of the way premiums are calculated and the coverage limits. A premium is the amount you pay (usually monthly) to be covered by the insurance policy. Premiums can vary based on many factors, so let’s consider age as an example. Since pets typically need more care as they age, older pets tend to have higher veterinary costs. To account for the increase in costs, insurance companies usually increase the premium as the pet gets older. So, if you have an older pet you might end up paying significantly more for insurance.

Coverage limits refer to situations where the insurance will not pay or has a limit to the amount they will pay. Often pet insurance will not cover breed specific conditions or pre-existing conditions. Remember, pet insurance uses similar terms to human health insurance but it is set up differently. For human health insurance, insurance companies cannot deny you coverage or charge you more just because of your pre-existing conditions. But pet insurance is actually a type of property insurance, so it does consider these factors. If you have a breed of dog that commonly has certain types of cancer or joint issues, pet insurance may not cover these conditions. Similarly, if you have a pet that has a history of a certain illness, it may be considered a pre-existing condition and anything related to it may not be covered.

The key here is to make sure you are looking at cost estimates and coverage that are specific to your pet, and not just generic estimates. These estimates can change depending on your pet and your situation. Shop around and get estimates from several companies before you decide!

When you shop around, you’ll want to compare more than just cost. You can contact companies to ask for a quote, but you’ll want to make sure that quote includes information about what the plan in the quote would cover. Some questions you can ask about the plan include:

  • What type of coverage is provided? The options are usually Accident Only or Accident and Illness, although you may also be able to add Wellness coverage for an additional cost.
  • Are there waiting periods? The plan might require you to wait a certain amount of time before it will cover any costs.
  • Are there any pre-existing conditions or other exempt conditions that this plan would not cover?
  • How does reimbursement work?

Don’t feel bad about asking questions! You want to make sure you understand exactly how the plan will work and what it will cover before you sign up. Keep in mind that you could also create a savings account that is specifically for pet expenses. Moving a set amount of money there every month can help you build an account you can use to cover unexpected expenses. Regardless of whether or not you decide to get pet insurance, planning for future pet costs is a great thing to include in your budget and financial planning!

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