How Does Pet Insurance Work? Guide to Health and Wellness Insurance for Dogs

What is Pet Insurance?

Insurance for pets works similar to the way health insurance works for humans. Pet insurance policies can help lessen the overall cost of visits to the veterinarian and help with unexpected costs caused by accidents and illnesses. However, like with all insurance, the coverage varies from plan to plan.

Typically, most pet insurance will only cover cats and dogs. Some companies will have specific plans for exotic pets; however, exotic pet plans differ from the more standardized dog and cat policies, so be prepared for the extra research. Nationwide, for example, offers a plan that covers a variety of illnesses and injuries for any animal species. This plan, however, does not cover routine exams or general wellness expenses.

Accident and Illness Pet Insurance

For cats and dogs, you’ll have far more options with insurance plans. The most common plan that pet owners purchase is strictly for accidents and illnesses. This plan covers cases where medical care is suddenly needed.

For example, an accidents and illnesses plan will cover things like:

  • Surgery
  • Hospitalization
  • ER/specialist care
  • Diagnostic testing
  • Prescription medications

An accidents and illnesses pet insurance will not cover general wellness costs. (More on pet wellness insurance below!)

Do any pet insurances cover pre-existing conditions?

Most plans will not cover pre-existing conditions. A pre-existing condition is a medical issue that the pet had before you bought the policy or that emerged while you were waiting for your insurance coverage to begin. These are almost never covered by pet insurance plans.

If you aren’t concerned about illness costs, there are certain plans available that strictly cover accidents. These tend to be cheaper, and cover most emergency care needs unrelated to a sickness.

Unlike insurance for people, most pet insurance will not restrict you to clinics in their network. Instead, they operate on a reimbursement basis, where you pay the bill upfront and submit the receipt to the insurance company for review and reimbursement.

The dollar amount you get back will depend on your plan. Some plans have payout limits for the year, the specific illness/condition, or even your pet’s lifetime. Be aware of what your payout limits are before committing to a plan in order to assess the coverage in a “worst case” situation.

Does pet insurance cover cancer? Again, it depends on the type of policy you buy. It also depends on your pet’s age and known conditions before you purchased the policy. It’s a good question to ask, especially if you have a breed that is known to be cancer-prone.

The same answer applies if you’re looking for pet insurance that covers other ailments, such as hip dysplasia.

How Much Does Pet Insurance Cost?

Pet insurance varies in price based on a number of factors. Keep in mind that some insurers only accept new pets within certain age limits. Some plans will require your pet to be 6 to 10 weeks old, while others will cut off enrollment around 8 to 14 years old.

The price of your pet insurance will be based on:

  • Pet age — The older he/she is, the more you’ll likely pay.
  • Breed — Some breeds are predisposed to certain conditions.
  • ZIP code— Average local veterinary care costs vary based on where you live.
  • Type of coverage — Prices will vary based on how much coverage you need.
  • Payout and deductible — A lower payout and higher deductible means paying less for the plan.

A deductible is an amount that you pay toward the needed treatment. Once this amount is paid, the insurance will begin to reimburse you. Under some plans, the deductible will reset annually when you renew your policy. Be aware that with some other insurance plans, the deductible applies every time there is a medical incident. While this sounds more expensive, it can potentially save you money if a single medical incident requires chronic, lifelong care. More varying incidents, however, will require more deductibles.

So how much will pet insurance cost on average?

The average accidents and illnesses plan cost for dogs in the U.S. for 2020 was $594.15 annually. The same plan cost for cats in the U.S. for 2020 was $341.81 annually.

An accidents-only plan cost for dogs in the U.S. for 2020 was $218.13 annually. The same plan cost for cats in the U.S. for 2020 was $133.61 annually.

Source for pet insurance premium averages: North American Pet Health Insurance Association.

What is Pet Wellness Insurance?

While an accidents and illnesses plan is the most common, it will not cover routine health care for your pet. For this, an extended plan to cover wellness is needed.

A wellness plan will cover things like:

  • Check-ups
  • Vaccinations
  • Routine care
  • Spaying/neutering
  • Heartworm preventatives

Some wellness plans will be a separate cost from your accidents and illnesses plan. Geico, for example, has an optional “Wellness Rewards” add-on to your pet insurance.

To get an idea of what the extra price will be, Nationwide offers a separate Pet Wellness plan that reimburses you for vaccinations, heartworm tests, trimming and other basic services (excluding spay/neuter surgery). This plan pays up to $400-500 a year and costs between $144 to $264 annually.

Does pet insurance cover shots and vaccines? These would fall under the wellness umbrella so, yes, most pet wellness insurance plans at least a portion of your basic vaccines, such as rabies, distemper, bordetella, etc.

What about flea and tick prevention? Does pet insurance cover flea treatment and tick prevention? No, most pet insurance policies do not cover this type of treatment.

Bottom Line: Is Pet Insurance Worth It?

‘Should I Get Insurance for My Dog?’

The value of your insurance will ultimately depend on what kind of pet you have and what specific coverage you’re looking for. Your pet’s lifestyle may also contribute to your decision, as a homebody pet may not be as prone to accidents as an active lifestyle pet.

In the U.S. during 2020, dogs made up 82.9% of all insured pets, according to NAPHIA. Cats were 17.1%. Together, that’s 3,101,956 insured pets! The amount of insured pets has been steadily increasing over the years, with a 23.2% increase in insured pets in 2020.

Ultimately, getting a new pet always means additional expenses and responsibilities. It’s important to sit down and calculate how much you’ll likely spend annually on your pet’s medical expenses. If you are planning to insure a dog, be aware of the breed of dog that you’re getting, as well evaluate what types of emergency costs you may experience in the future. You might also want to read about how much it costs to own a dog every year. (And, yes, the price is well worth it!)


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