Pet Health Insurance 101 – Preparing for Unexpected Health Expenses

Pet Health Insurance 101 – A quick guide to purchasing pet insurance. Includes explanation on what to look for and coverage types.

Unexpected illnesses or injuries can and do happen – quite frequently.  As a pet owner, this can be costly.

Sure, you can have a few thousand dollars saved up… in case your dog tears his ACL or CCL (approximately $5,000 surgery per knee to repair), you can just cough up the cash. What if there is an accident? Hospitalization can cost around $2,000 per overnight stay at the vet’s. And the recovery/physical therapy after treatment during the recovery period? The reality is most of us aren’t rolling in cash, and a $10,000 vet bill will do a lot of damage.

So how is a responsible pet parent going to prepare for unexpected injuries or illnesses?  The answer is pet insurance, Care Credit, or both.

Care Credit

What is care credit? This isn’t insurance. Its basically a line of credit that certain vet offices will accept as payment. There is an interest rate, and there is a repayment plan, which all vary depending on the office and treatment.

If your pet health insurance does not cover 100% of the medical costs for your pet (most don’t), you probably should have Care Credit as a back-up to cover the amount that insurance doesn’t cover.

Its also important to have because health insurance doesn’t pay the vet bills; most reimburse vet bills that you already paid. What does that mean? You have to pay the bills first.  Pay it with Care Credit (or from your pocket if you can), and get reimbursement later.

Pet Health Insurance

Now we are getting into pet health insurance.  There are tons of health insurance companies out there.  To the best of my experience, your premium will vary from region to region.  For example, insuring a dog whose address of residence is in the Inland Empire will result in a lower premium than a dog whose address of residence is in Los Angeles.

You’ll have to find an insurance company that works for you.  Some of the factors to consider are what the insurance covers, and how the insurance coverage works.

What Is Covered By The Pet Health Insurance?

Consider the following (not an inclusive list; there are many other factors), as not all are covered by every insurance company:

  • Accidents and/or illnesses – some insurance plans will cover both accidents and illnesses, others will only cover accidents (these usually have lower premiums)
  • Senior dogs – some insurance companies will not insure senior dogs if the coverage starts when the dog is already a senior; others will.
  • Pre-existing conditions – if the health condition/issue existed and is known before the coverage starts, some insurance will not cover illnesses related to those pre-existing issues.
  • Congenital conditions – this is a weird one, but some insurance will not cover congenital conditions even if it is discovered after coverage started and not before.
  • Dental – some insurance companies/plans do not cover dental at all; others only cover trauma but not periodontal diseases; some cover both.
  • Wellness – wellness is usually not included in a normal pet health insurance plan; its always an add-on.
  • Diagnostic – some insurance companies/plans does not include diagnostic (blood test, x-rays, etc.) of an injury or illness, but will cover the treatment (medication, etc.)
  • Rehabilitation – some insurance companies/plans cover physical therapy, acupuncture, etc.; others do not.

How Pet Health Insurance Works

Most pet health insurance requires you to pay the vet bill in advance, and will reimburse you later for the part of the claim that is covered. I think there is one pet health insurance company that actually pays the bill at the office for you, but I am willing to bet that premium is high.

So how is it structured?  Two most common types:

Benefit Schedule

Nationwide is the only insurance company I am aware of (there could be more that I am not aware of?) that offers this Benefit Schedule model.  Quoted from Nationwide’s website, the Benefit Schedule is where “[r]eimbursement is capped at a set amount for each condition, regardless of the actual treatment cost.”  Basically, if your dog throws out its back and it costs you $13,000 to fix, but the plan benefit schedule caps it at $5,o00, you’re only getting $5,000 back.  Simple, and in my opinion, kind of shitty. What if your dog throws out both knees? Well, you’re capped at a certain level with one knee; you’re on your own with the other one.

Deductible, %, and Maximum Allowable

Most other insurance companies offer the deductible, %, and Maximum Allowable coverage.  Most of the time these numbers are flexible, and as they change your premium will change.

The deductible is how much you pay before your insurance kicks in (only qualifying claims will count towards your deductible).

The percentage of coverage is how many % the insurance company will pay once the deductible is satisfied and the insurance kicks in.  This is usually between 70-100%.  Example: if your deductible is $1,000, and your total vet bill is $2,000 and your coverage % is 80%.  You pay the $2,000 in advance, and the insurance company gives you back $800 ($1,o00 is the deductible that you pay all of, and the insurance is paying 80% of the remaining amount).  Sure, sounds like a rip-off at such a small amount, but if your vet bill is $10,000, it makes a big difference.

Lastly, the maximum allowable coverage.  This is the MAXIMUM amount the insurance will pay out (usually per 12 month period; some insurance has a maximum for the life of the insured). It can be set as low as $7,000, or sometimes unlimited.

In a nutshell.

That is it in a nutshell. Its not mean to give you all the answers – you’ll have to do a lot of the research yourself. It is just meant to explain the basics and give you an idea of what to look for.

Wishing you and your pets health and happiness.


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