Pet health insurance helps cover the cost of veterinary care if your pet becomes ill or injured. Some pet insurance plans also provide reimbursement for wellness procedures such as vaccinations, heartworm testing and spaying/neutering.
Pet insurance is similar to human health insurance in that it has:
- Maximum payouts
- Waiting periods
- No coverage for preexisting conditions
- Coverage lasts for a single policy year
Understanding Pet Insurance
The premium is the amount of money you are expected to pay to the insurance company in order to maintain insurance coverage. Most pet insurance companies will give this amount as a monthly charge, but will often give a small discount if you pay your premiums in a yearly lump sum.
A deductible is the amount of money you are expected to pay for veterinary care before any additional expenses are eligible for reimbursement. For the amount you spent at the vet to count toward your deductible you must still file the claim with your insurance company.
Important: Expenses only count toward your deductible if they are for services that are covered by your policy. For example, if you have a policy that does not include wellness exams, submitting a claim for a wellness exam will not count toward your yearly deductible.
Co-pays are the amount you are expected to pay toward covered services. For example, if your policy has 70% reimbursement then your copay is 30%. If your policy has 90% reimbursement then your copay is 10%.
It is important to note that you are responsible for 100% of the cost of care until your deductible is met. Then, you are still responsible for paying 100% of the cost to your veterinarian at the time of service. The insurance company will reimburse you those expenses, except for your copay, when your submitted claims are approved.
At the start of every new policy year you will have a period of time where new illnesses and some injuries are not covered. This period of time is typically 30 days, but some policies have smaller waiting periods. Accidents and most injuries are usually covered immediately unless specifically stated otherwise by the insurance policy itself.
Important: If your cat develops a new, chronic illness during this waiting period the illness will be considered a “preexisting condition” and will not be covered even after the waiting period ends.
One thing that is never explained well in policy documents is that for most insurance companies there is a new waiting period for every new policy year. If your cat develops a new illness during the waiting period of any new policy year that illness will be considered a “preexisting condition.”
A preexisting condition is any disease or illness that your cat had at the time the policy began, or any disease or illness that developed during the initial waiting period. Certain types of injuries can also be considered preexisting conditions, but those are typically things that would develop as part of a chronic condition. For example, a knee injury due to arthritis might be excluded from coverage, but a knee injury from a falling accident would be covered. Preexisting conditions are never covered by insurance.
Some conditions, such as diabetes, could be covered in later policy years if your cat goes into remission and stays in remission long enough for the diabetes to be considered “cured.” Be sure to check the policy carefully to understand how long a disease must be “cured” before it is no longer considered preexisting.
Important: Having a preexisting condition does not affect reimbursement for other injuries or illnesses. For example, if you have a cat with chronic kidney disease as a preexisting condition, they can still receive reimbursement for treatment of Acute Kidney Injury if they happen to develop a kidney infection.
Important: Some policies have exclusions so that something diagnosed in one policy year will be excluded from coverage in future policy years. If your policy has this kind of exclusion and your cat is diagnosed with a chronic condition or cancer you may not receive any benefits after your current policy year ends.
Some insurance policies will exclude coverage for specific illnesses or injuries based on the breed of your cat. These exclusions occur for things that are commonly associated with a single breed. When you are reviewing the insurance policy be sure to look for breed-specific exclusions in the policy language which may apply to your cat. If possible, it’s best to avoid a policy that has breed exclusions if your cat is a pure breed. If they are a mixed breed you may want to contact the insurance company to find out if the exclusion would apply to your cat.
Some common exclusions are:
|American Short Hair|
British Short Hair
Persistent atrial standstill
Many insurance policies have a maximum payout amount, that is, the most money you can receive back for services. Maximum payouts typically come in different categories.
Important: The maximum limits are usually disease/condition specific. If you have a cat who has reached their lifetime maximum for treatment of cancer, but then breaks a leg, the broken leg will still be covered. However, there are some policies where the maximum payout is “per cat” so that once you reach that payout limit you will never receive another reimbursement again.
Important: When evaluating and comparing policy options, pay attention to the fine print on what they reimburse for. Some policies will exclude taxes, waste handling, or shipping fees from reimbursement, while other policies will also reimburse for them. These fees can really add up if your cat has a chronic condition, so choosing a policy that includes your expenses on these in their reimbursement plan will put more money back into your pocket.
A lifetime maximum is the total amount an insurance company will pay for the care of a particular pet and condition. Once you reach that maximum the insurance company will stop sending reimbursement for your claims. Lifetime maximums are typically disease/condition specific. A cat who hits their lifetime maximum for cancer should still be able to receive reimbursement for treatment related to diabetes.
An incident maximum is the total amount an insurance company will pay for a specific health problem. An “incident” may or may not be a single event. An incident can refer to a one-time injury, like a broken leg, or it can refer to a chronic illness like cancer.
Important: Pay very close attention to Incident Maximums! This is the policy language that could prevent you from receiving reimbursement in future years if your cat is diagnosed with a chronic illness such as cancer or diabetes. Chronic illnesses are often considered a single incident to insurance companies.
A yearly maximum is the total amount the insurance company will pay out in a policy year. Some companies have a set amount for their yearly maximums and some companies let you set your own yearly maximum.
A policy year is the the time frame when the insurance policy is effective. Pet insurance can be purchased at any time, and your policy year will begin when your policy is approved. A policy year is not usually the same as a calendar year (January 1 to December 31). Your policy year begins on the Effective Date (usually the day you purchased the policy).
Enrollment Age Limits
Some insurance plans will restrict enrollment based on your cat’s age. This simply means that your cat will not be able to be enrolled for coverage with that company. Most companies do not restrict enrollment based on the age of your cat, so if you find a company that does, just ignore them and move on.
Is Pet Insurance Right for You?
The biggest determinant for whether pet insurance is right for you is cost. With pet insurance you are still required to pay 100% of the cost of your veterinary care at the time of service, and you will have the additional cost of the yearly insurance premium amount. Here are some questions to think about.
- Can I afford the total cost of all my vet visits right now?
- Can I afford to add the monthly insurance premium to my budget?
- Can I afford to wait for up to 8 weeks for the insurance company to pay me back after I submit a claim?
- Can I afford the cost of the insurance policy and the cost of my cat’s care if the insurance company denies my claim for reimbursement?
- Can I afford to pay for an emergency hospitalization if my cat suddenly becomes ill or injured?
If you answered yes to all those questions, then pet insurance may be a good choice for you.
If you answered yes to all but the last question, then pet insurance may still be a good choice for you. I would encourage you to take some time and research your options for emergency funding or financial assistance in case you need it. The best time to do that research is before you need it.
Evaluating and Comparing Options can help you review insurance options and see if there is a policy that will work for you.
If you answered no to most or all of those questions then pet insurance is not a good choice for you. You might want to see if you qualify for any financial assistance options that can help you when unexpected vet bills arise.