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General pet insurance questions

  • What are congenital and hereditary conditions?

    You'll probably see these terms referred to when you're shopping for pet insurance. What do they mean?

    • A hereditary condition is one that is linked to genetics – meaning it was passed down from your pet’s parents. Example hereditary conditions include diabetes, cherry eye and hip dysplasia.
    • A congenital condition is not linked to genetics. It’s related to things that happened while your pet was still developing in utero. Examples of congenital conditions include heart defects, cleft palate, and defects in other organs or limbs.

    Some conditions might be both congenital and hereditary. The tricky thing about congenital and hereditary conditions is that they may not appear for years. So you wouldn't know your otherwise healthy pet has one until it shows up – and treatment is often expensive. For this reason, we encourage pet insurance buyers to consider only policies that cover congenital and hereditary conditions. But wait – you might think that you don't need this coverage if your pet's breed isn't prone to these types of conditions. It's true that certain breeds have higher risks for these conditions; however, that doesn't mean that your pet, if not one of these breeds, is risk-free. Also, policies that exclude coverage for congenital and hereditary conditions give the insurance company more “wiggle room” – it gives them the ability to determine that a certain health condition, where the cause is unknown and difficult to determine, is congenital or hereditary. That means your claim would be denied. To avoid these situations, and to make sure your pet is covered, we recommend getting a policy that covers congenital and hereditary conditions, without limit.

  • What is a pre-existing condition?

    These are any health conditions that first occurred before the pet insurance policy's start date (aka effective date). Anything that is documented on your pet's medical health record before you get pet insurance will likely be considered a pre-existing condition and will be excluded from coverage (meaning any claim you make on that condition will be denied). Because pre-existing conditions are always excluded, you should get pet insurance as soon as possible for your pet! The longer you wait, the greater the chance your pet experiences a health issue that would be excluded from coverage.

  • Should I get a pet insurance policy that covers cancer and chronic diseases?

    The short answer is: yes, get a plan that covers cancer and chronic diseases.Sadly, cancer is common in dogs and cats. It's the leading cause of death in dogs over the age of 10. However, the good news is that half of all cancers are curable if caught early. Make sure your policy covers cancer and doesn't place a limit on the amount you can be reimbursed for cancer treatment expenses (cancer would likely be treated as a single incident on a policy that has a per-incident limit). Also, make sure your policy covers chronic diseases (which are long-term and usually not curable) on a continual basis (meaning, coverage continues for that disease after the year it was first diagnosed).

  • Should I get a pet insurance policy that covers congenital and hereditary conditions?

    The short answer is: yes, you want a pet insurance plan that includes this coverage.The tricky thing about congenital and hereditary conditions is that they may not appear for years. So you wouldn't know your otherwise healthy pet has one until it shows up – and treatment is often expensive. For this reason, we encourage pet insurance buyers to consider only policies that cover congenital and hereditary conditions. But wait – you might think that you don't need this coverage if your pet's breed isn't prone to these types of conditions. It's true that certain breeds have higher risks for these conditions; however, that doesn't mean that your pet, if not one of these breeds, is risk-free. Also, policies that exclude coverage for congenital and hereditary conditions give the insurance company more “wiggle room” – it gives them the ability to determine that a certain health condition, where the cause is unknown and difficult to determine, is congenital or hereditary. That means your claim would be denied. To avoid these situations, and to make sure your pet is covered, we recommend getting a policy that covers congenital and hereditary conditions, without limit.

  • What deductible should I get on my pet insurance policy?

    You might be wondering which is better to get on your policy: a per-incident deductible or an annual deductible. The short answer is that neither is really better. They're both designed to share costs between you and the insurance company. The important thing is to choose a deductible amount that you're comfortable paying if the need arises. However, if you can predict the future:

    • And can see that your pet will have a lot of incidents requiring vet care over the next 12 months, then an annual deductible is probably better.
    • Or, if your pet will only have 1 or 2 incidents requiring vet care over the next 12 months, then a per-incident deductible is probably better.

    One more important thing to remember about deductibles: if you want a low deductible, you'll pay for it with a higher premium. It also works the other way: if you're willing to accept a higher deductible, your premium will be lower. Neither is necessarily better – it just depends on your preference:

    • Do you want to pay less out of pocket when you actually seek vet treatment for your pet? Then get a lower deductible
    • Do you want a lower fixed amount that you pay monthly, and are comfortable with a larger amount you’re on the hook for when you go to the vet? Then get a higher deductible
  • How do I get reimbursed for a vet bill?

    If your pet needs to go to the vet for medical treatment, then you'll make a claim for reimbursement of eligible expenses. Here's what you should know about the claims process:

    1. You can go to any licensed veterinarian. Unlike health insurance, pet insurance doesn’t require you to stick to a network.
    2. You have to pay all vet bills upfront. Unlike health insurance, the vet doesn’t bill the insurance company. You pay first, then file a claim with the pet insurance company.
    3. Your pet insurance company will have a simple form for you to fill out and submit (via fax, mail or email), along with the itemized invoice from your vet. The form usually asks for your information about: your vet, the diagnosis and the treatment provided for your pet. It’s a simple, one-page form.
    4. If it’s your first claim, you’ll have to submit your pet’s complete medical records, along with the claim form.
    5. Then you wait on the decision from the company. If you’ve been a careful shopper, and read through the policy when you bought it, you should not be surprised by the claim reimbursement. This check will usually arrive in the mail (processing times will vary).
  • Does pet insurance cover the cost of a vet office visit?

    Most vets charge a flat fee whenever you bring your pet in for a consultation or exam. That fee is usually in addition to whatever diagnostic test or treatment your vet might perform. (Your regular doctor probably charges for office visits too). Pet insurance plans that have a limit on the benefits or payouts per year will cover this fee. However, pet insurance plans that don't have any cap or limit on benefits don't cover this fee. We think this is fair. Why do we think that? Because it's reasonable cost-sharing between you, as a responsible pet owner, and the insurance company, which wants to offer plans at affordable premiums. By making the pet owner responsible for the exam/consultation fee, it encourages pet owners to take their pets to the vets only when it's reasonable to seek vet care. Not every little sniffle or sneeze requires you to see the doctor; it's the same with your pet. But if vet office visits were covered (especially on plans without limits), some anxious owners might be inclined to take their pet to the vet, even when it's unnecessary. This would drive up the cost of insurance for everybody!

  • Does pet insurance cover the vet exam fee?

    Most vets charge a flat fee whenever you bring your pet in for a consultation or exam. That fee is usually in addition to whatever diagnostic test or treatment your vet might perform. (Your regular doctor probably charges for office visits too). Pet insurance plans that have a limit on the benefits or payouts per year will cover this fee. However, pet insurance plans that don't have any cap or limit on benefits don't cover this fee. We think this is fair. Why do we think that? Because it's reasonable cost-sharing between you, as a responsible pet owner, and the insurance company, which wants to offer plans at affordable premiums. By making the pet owner responsible for the exam/consultation fee, it encourages pet owners to take their pets to the vets only when it's reasonable to seek vet care. Not every little sniffle or sneeze requires you to see the doctor; it's the same with your pet. But if vet office visits were covered (especially on plans without limits), some anxious owners might be inclined to take their pet to the vet, even when it's unnecessary. This would drive up the cost of insurance for everybody!

  • Why doesn’t pet insurance cover routine care and wellness?

    Routine care and wellness refers to all vet care and procedures to prevent illness and keep your pet healthy. This usually includes: spaying and neutering, annual checkups, vaccinations, flea & tick control, heartworm medication, teeth cleaning, ear cleaning, and microchipping. These are almost always excluded from pet insurance coverage. We think that's a fair exclusion. Why do we think that? These are the types of costs you should expect as a responsible pet owner. They're predictable (meaning you can budget for them) and are usually not outrageously expensive. Many pet insurance companies offer am optional policy add-on to cover a portion of these costs (usually called a wellness policy rider). However, we think your money is better spent on getting a more robust policy for unpredictable illnesses and injuries (over a wellness option, we'd choose instead: a higher reimbursement rate, a lower deductible or a higher payout limit).

  • Do I need pet insurance?

    If you’ve done online research elsewhere, you may have seen articles about whether pet insurance is “worth it” – specifically, whether the costs you pay equal or exceed the benefit payouts you get from the pet insurance policy. This is entirely the wrong way to think about pet insurance (or any insurance). You don’t buy insurance with an expectation that your benefits will equal or exceed the amount you pay for it. You buy insurance just in case, and hope that you don’t ever have to use it! If you have car insurance, consider how you think about car insurance. Just because you have car insurance, you don’t expect or hope that you’ll have to use it. In fact, you hope that you’ll never have to use it. Also, if every customer could expect to at least break even on an insurance policy, then no insurance company would sell that policy! Insurance is about pooling together risks over a large group of people (or dogs or cats) and spreading the cost of protecting against those risks. (For a more detailed explanation, see our discussion on the law of large numbers).

    The best to way to think about pet insurance is that it’s intended to help cover high and unexpected vet bills. Pet insurance helps owners avoid the situation where lifesaving care (which usually costs a minimum of $3,000) for a beloved pet comes down to a heartbreaking financial decision. A popular economics columnist wrote about her decision to buy pet insurance for her puppy and it came down to this: she wanted to be able to make the right medical decision for her dog without financial considerations being a factor. If that reasoning makes sense to you, and a monthly cost of $10-$60 per month is manageable, then pet insurance is a good idea for you.

  • Why doesn’t pet insurance cover pre-existing conditions?

    Pre-existing conditions are any health conditions that first occurred before the pet insurance policy's start date (aka effective date). Anything that is documented on your pet's medical health record before you get pet insurance will likely be considered a pre-existing condition and will be excluded from coverage (meaning any claim you make on that condition will be denied).

    We think this is a fair exclusion.Why do we think that? Because an insurance system that covers pre-existing conditions couldn't last for very long! That would allow people (or pet owners) to wait until they get sick before they got insurance – and then cancel it after they recover. If everybody did that, no insurance company could afford to exist! Insurance works because not everybody needs it at the same time (this is because of the “law of large numbers”). Sick pets (and wrecked cars and damaged homes) can be covered by insurance because people with healthy pets and no car accidents and undamaged homes are also paying into the insurance pool. Because pre-existing conditions are always excluded, you should get pet insurance as soon as possible for your pet! The longer you wait, the greater the chance your pet experiences a health issue that would be excluded from coverage.

  • What is pet insurance?

    Pet insurance is like health insurance for your dog or cat. 1

    It helps cover the cost of veterinary medical care for your pet, which as pet owners know can be pretty expensive. There are several pet insurance companies and a range of plans available. Depending on the age and breed of your pet, where you live, and the level of coverage you select, the cost of pet insurance usually ranges from $10 to $60 per month.

    [1] There is also pet insurance for exotic pets, like reptiles, ferrets and birds. Currently only one company – VPI – offers insurance for exotic pets.

  • How do I know which vets accept pet insurance?

    You don't have to worry about this! With pet insurance, you can go to any licensed veterinarian. You pay the veterinarian for services (as you normally would), then submit that bill with a claim form to the pet insurance company. Any reimbursement you're eligible for will be paid directly to you by the pet insurance company.

    This is different from human health insurance, where the insurance company pays the doctor directly (not you). That's why for human health insurance, you need to confirm whether your doctor works with a particular insurance company. In this way, pet insurance is simpler than human health insurance.

Pet insurance policy terminology

  • My pet insurance policy mentions routine care and wellness. What does that mean?

    Routine care and wellness refers to all vet care and procedures to prevent illness and keep your pet healthy. This usually includes: spaying and neutering, annual checkups, vaccinations, flea & tick control, heartworm medication, teeth cleaning, ear cleaning, and microchipping. These are almost always excluded from pet insurance coverage. We think that's a fair exclusion. Why do we think that? These are the types of costs you should expect as a responsible pet owner. They're predictable (meaning you can budget for them) and are usually not outrageously expensive. Many pet insurance companies offer am optional policy add-on to cover a portion of these costs (usually called a wellness policy rider). However, we think your money is better spent on getting a more robust policy for unpredictable illnesses and injuries (over a wellness option, we'd choose instead: a higher reimbursement rate, a lower deductible or a higher payout limit).

  • My pet insurance policy mentions a limit (or cap) on benefits. What does that mean?

    Some pet insurance policies will limit the amount paid in claims for your pet. (There are also policies with no limits). Generally, there are five different types of limits on payouts:

    • Maximum payout per incident – This is the maximum amount the insurance company will pay out for each separate illness or injury. Once you hit that limit, the insurance company will not reimburse any additional expenses for that incident. For policies that have a maximum payout per incident, the limits can go up to $7,000.
    • Maximum payout per year – This is the maximum amount the insurance company will pay for each twelve-month period on your policy. Once you hit that limit, you’re not eligible for any more money until the next year. For policies that have a maximum payout per year, the limits can go up to $20,000.
    • Maximum lifetime payout – This is the maximum amount the insurance company will pay during the lifetime of your pet. Once you hit that limit, you’re not eligible for any more reimbursement and your policy will be terminated. For policies that have a maximum lifetime payout, the limits can go up to $200,000.
    • Maximum payout per body system – This is the maximum amount the insurance company will reimburse for a body system. Examples of body systems include: digestive system, musculoskeletal system, and nervous system. Once you hit that limit for a body system, you will not receive any more money for any injury or illness that relates to that body system.
    • Maximum payout based on a schedule of benefits – This is the maximum amount the insurance company will reimburse, based on a listing of allowances for health conditions. For example, the schedule might have a maximum allowance for asthma of $500. That’s the maximum payout you’d be eligible for, per year, for any expenses related to your pet’s asthma.

    A word of caution here: we don't recommend policies that have a maximum payout per body system or based on a schedule of benefits. We think these types of limits shortchange pet owners. They're also confusing, so it's difficult to understand what you're buying (which often leads to unhappy pet owners when they file a claim). We're also not fans of policies with maximum payouts per incident. An incident could be a single life-threatening event (e.g., cancer or a car accident) that requires expensive, lifesaving care. A per-incident limit is typically lower than an annual or lifetime limit…so the per-incident limit might actually defeat the purpose of pet insurance, which is to allow you to make decisions about lifesaving care without worrying about the cost.

    On the other types of payout limits – annual and lifetime – we think they're totally fine as long as they're high enough to cover a worst case scenario (which can run upwards of $20,000 for certain conditions). There are also plans with no limits on payouts. These plans provide the greatest peace of mind (and are still reasonably priced).

  • What is an accident plan?

    There are some pet insurance policies that cover accidents only. What means is that it helps cover vet costs to treat accidental injuries, which usually include broken bones, poisonings and ingesting foreign objects (like tennis balls, a common cause of accidental injury). It does not cover vet costs to treat illnesses. These are usually the least expensive type of insurance plan. Our advice: don’t buy one. It’s a better use of your money – and you’ll be much more satisfied with your plan in the long run – to buy a comprehensive policy that covers accidents and illnesses.

  • My pet insurance policy mentions a “reimbursement rate.” What is that?

    The reimbursement rate is the percentage rate at which the insurance company covers eligible expenses (after the deductible is applied). Most pet insurance policies have reimbursement rates that range from 70-90%. Higher reimbursement rates will cost you more in terms of monthly premium (just like low deductibles do). Here’s an example of how it works if you have a policy with a $500 deductible and an 80% reimbursement rate:

      $3,000 total claim submitted for reimbursement
    - $500 deductible you're responsible for
    = $2,500 eligible expense for reimbursement
    × 80% reimbursement rate
    = $2,000 reimbursement to you
    

    A word of caution here: some pet insurance companies reimburse based on a fixed schedule of costs (you may see it referred to as the “usual and customary charges for the treatment”), rather than the actual vet bill you submit. We don’t recommend that type of pet insurance policy; you’ll be better off on reimbursements when they’re based on your actual vet bills.

  • What is a per-incident deductible?

    A deductible is the amount that you're responsible for, before your insurance coverage applies. It's deducted right off the top, before the insurance company pays on a claim. You're probably familiar with deductibles from other types of insurance (health insurance, car insurance, etc.).A per-incident deductible is where a deductible is applied for each incident that requires veterinary care. How it works: let's say your policy has a $100 per incident deductible. If your dog eats an entire bag of Hershey's chocolates, that's an incident. You pay that $100 deductible for this incident, regardless of how many separate vet visits this requires. Let's say a month after the Hershey's incident, your dog gets bitten at the dog park (poor dog!) and requires stitches on his leg. That's another incident. You have to pay another $100 deductible for this incident.

  • What is an annual deductible?

    A deductible is the amount that you're responsible for, before your insurance coverage applies. It's deducted right off the top, before the insurance company pays on a claim. You're probably familiar with deductibles from other types of insurance (health insurance, car insurance, etc.). If your policy has an annual deductible, it gets applied over the course of the year. How it works: let's say your dog eats a bag of Hershey's chocolates and the vet bill for that is $600. If your policy has a $300 annual deductible, then $300 would be deducted off the top (that you pay), and the insurance company would reimburse on the remainder of the bill. Let's say a month later, your dog gets bitten at the dog park (poor dog!) and requires stitches at the vet. The vet bill for that costs $500. This time, there's no amount deducted off the top. That's because you already met the $300 annual deductible on the Hershey's incident. There would be no more deductibles on any incident for the rest of the year.

  • My pet insurance policy mentions a “deductible.” What is that?

    The deductible is the amount that you're responsible for, before your insurance coverage applies. It's deducted right off the top, before the insurance company pays on a claim. You're probably familiar with deductibles from other types of insurance (health insurance, car insurance, etc.). A pet insurance policy will have one of two types of deductibles:

    • A per-incident deductible: A set amount is deducted off the top (that you’re responsible for paying) for each incident that requires veterinary care. How it works: let’s say your policy has a $100 per incident deductible. If your dog eats an entire bag of Hershey’s chocolates, that’s an incident. You pay that $100 deductible for this incident, regardless of how many separate vet visits this requires. Let’s say a month after the Hershey’s incident, your dog gets bitten at the dog park (poor dog!) and requires stitches on his leg. That’s another incident. You have to pay another $100 deductible for this incident.
    • An annual deductible: Instead of getting applied per incident, the deductible gets applied per year, regardless of how many incidents your pet has. Let’s continue using the previous example. Assume the total vet bill for the Hershey’s incident was $600. If your policy has a $300 annual deductible, then $300 would be deducted off the top (that you pay), and the insurance company would reimburse on the remainder of the bill. A month later, the dog bite incident costs $500 at the vet. This time, there’s no amount deducted off the top. That’s because you already met the $300 annual deductible on the Hershey’s incident. There would be no more deductibles on any incident for the rest of the year.
  • My pet insurance policy mentions a “premium.” What is that?

    The premium is the recurring cost of the insurance policy. You pay this amount monthly (or annually in some cases) regardless of whether you make a claim on the policy. If you stop paying the premium on the policy, the coverage terminates (in insurance language, this is called “lapse”).