Pet Insurance In A Nutshell: How It Works

June 1, 2022

There may be no rational explanation for our unconditional feelings towards pets, but here we are walking them, petting them, and loving them just as much as we love our family members. There’s no use denying the unique bond that people and pets have developed and strengthened over centuries and decades, the one that makes us adore our little fuzzy ones when they ‘sploot’ or ‘derp’ and the same one crying out for “help!” whenever they get sick.

We adore our pets, but not all of us are informed enough to take care of them in a proper way. There are numerous gaps to fill, and pet insurance is arguably the most abysmal. Wonder why?

Here’s a piece of statistics:

  • Unlike the U.S. citizens themselves, over 91% of whom have health insurance, pets are by and large uninsured. According to the North American Pet Health Association, the governing body of pet insurance in the U.S. and Canada, only about 3.45 million pets were insured in North America in 2020 — which is a tiny fraction compared to the 135 million dogs and cats in the United States.

The good news, though, is that more and more pet owners are beginning to get worried about the health conditions of their four-legged friends. The pet insurance market has been growing at an impressive rate of about 23.4% for the last half of the decade, with anticipations of more growth to come.

So if you’re reading this, you’re already on the right path towards insuring your furry friends. Not only will pet insurance protect your little companion, but it will also save you money that would otherwise be spent on unexpected and expensive exams and treatments.

But enough small talk. Let’s move to what you’re here for: hitting the bull’s eye with your pet insurance. The lines below will provide you with everything you should know before making that big commitment.

What Is Pet Insurance?

If you’ve ever dealt with health insurance for humans – and, as the mentioned statistics unequivocally indicate, there’s a massive chance for that – then you will have no hard time understanding pet insurance.

It covers the costs of veterinary bills – just like health insurance does for humans – and even the death of your furry friend. Like human health insurance, pet insurance has a deductible and a premium, which should be considered. Besides, sheep, horses, goats, and other livestock are not considered pets and therefore are excluded from the coverage.

Types Of Pet Insurance

  • Lifetime: Lifetime policies cover your fluffy friend once and for all, though the nuances may differ depending on the sub-type of the policy.
    • Per-condition policies pay up to an annual limit for each specified condition.
    • Annual policies pay up to an annual limit for all vet fees.
    • Mixed policies may have both the general annual limit and separate annual limits for each specified condition.
  • Non-lifetime: In a similar fashion to term life insurance, non-lifetime pet policies provide coverage for a limited time. There are two sub-types of non-lifetime pet policies:
    • Per-condition policy, which pays up to a limit for the specified conditions. Once the limit is reached, the insurance extinguishes.
    • Time-limit per condition policy, which has both time and money limits. Once the limits are reached, the policy extinguishes.
  • Accident-only: Following the name, accident-only policies only cover unanticipated costs, compensating for the treatment and recovery of your pet.
  • Maximum benefit: Having no time limits, maximum benefit policies cover veterinary fees up to the established limit. These policies are valid until you’ve reached the monetary limit.

How Does Health Insurance For Pets Work

What Does Pet Insurance Cover?

Though policies may differ, in addition to veterinary expenses and death, most pet insurance policies cover:

  • Liability coverage: A walk in the park with a Wolf Hybrid, Rottweiler, or Pitt Bull may not always be safe. Dogs separated from their wolf ancestors about 40,000 years ago, but some breeds are still aggressive. The ‘liability’ part of the policy covers injuries to third parties, as well as property damage.
  • Missing coverage: About a third of all dogs and cats in the U.S. are lost at least once in their lifetime, and over 80% of the missing pets are never found. The ‘missing’ part covers the reward for finding your star-crossed little friend as well as the expenses like putting up posters and making online announcements.
  • Lost travel & accommodation coverage: As per Murphy’s Law, if your pet ever gets ill, it will inevitably happen when you’ve just packed your suitcase and are about to leave the country. Lost travel and accommodation cover these cases as long as the illness is severe.
  • Kennel & Cattery coverage: Whether you’re traveling or ill, and there’s no one to look after your cat or dog, kennel and cattery coverage will take care of expenses for a temporary shelter.
  • Dental coverage: Not only are dental diseases one of the most common diseases in pets but, more importantly, they cause chronic pain in pets. Besides, we all know what dental bills look like.
  • Euthanasia coverage: In a situation when your pet is terminally ill and experiences incurable pain and other types of distress, euthanasia may be the only humane outcome. This type of coverage will take care of that.

Does Pet Insurance Cover Pre-Existing Conditions?

No, it doesn’t cover pre-existing conditions. Even though pet insurance is almost all-encompassing, there are a few exclusions, such as pre-existing conditions, routine treatment, waiting period, and pregnancy.

  • Pre-existing conditions: If your pet was ill before you purchased the insurance policy, these illnesses typically wouldn’t be covered. Pre-existing conditions include:
    • Historic conditions: healed injuries and illnesses.
    • Chronic conditions: ongoing injuries and illnesses.

Neither history condition nor chronic conditions are covered. However, sometimes the pre-existing conditions that have been dormant for a long time can be covered.

  • Routine treatment: Grooming, vaccination, castration, flea treatment, and routine things alike, as well as a preventative treatment, are usually not covered.
  • Waiting period: Most insurance providers won’t cover any illnesses that occur immediately – within the first two to four weeks – after you’ve bought the policy.
  • Pregnancy: More often than not, pregnancy and offspring treatment are not covered in a basic pet insurance policy.

This may seem like a long list of uncovered cases, but the truth is, the most common mishaps are covered, whereas all uninsurable cases are logically justified.

Dog insurance

Does Pet Insurance Cover Hereditary And Congenital Conditions?

Aside from illnesses and accidents, special hereditary and congenital conditions can affect the animal’s welfare by transmitting to puppies from their parents and taking a toll over the years. These are heart, eye, neurologic, hip abnormalities and defects, and other genetic conditions inherited by puppies and kittens.

Standard pet insurance won’t cover hereditary and congenital conditions, but there’s a special add-on for that, called hereditary coverage. It covers diabetes, arthritis, hip and elbow dysplasia, heart disease, eye disorders, and other conditions.

Does Pet Insurance Cover Cruciate Ligament Surgeries?

Traumas can cause anterior cruciate ligament (ACL) tears, but the age of the dog and the breed itself are also important factors. German Shepherd, Rottweiler, and Labrador Retriever are all in the risk group, which is why owners of these breeds should be especially cautious as to whether they need ACL insurance.

Luckily, most pet policies cover ACL surgeries, although under some specific conditions:

  • Waiting period: Any signs of knee issues during the waiting period extinguish the ACL part of the insurance. However, the waiting period can be waived with some insurers if the pet owner proves that the pet’s knees are healthy.
  • No history of ACL tears: Any cases of ACL tears may nullify the coverage.

How Much Is Pet Insurance?

With the ever-growing premium volume for pet insurance in the U.S., the average pet insurance monthly premium is about $50 per month. The actual price of pet insurance, though, depends on over a dozen factors, such as the type of insurance, the status of the particular insurer, the pet’s breed, age, gender, history of claims, and location.

How Much Is Pet Insurance For Dogs?

Pet insurance for dogs is approximately two times more expensive than cats. You can expect to pay about $20 to $80 a month for dog insurance, depending on the specific factors of your case.

How Much Is Pet Insurance For Cats?

Pet insurance for cats is approximately two times more expensive than dogs. You can expect to pay about $8 to $30 a month for cat insurance depending on the specific factors of your case.

Health Insurance For Pets

Pet Insurance Deductibles: Annual And Per-Incident

Your pet insurance may have either an annual deductible or per-incident deductible. The former is the amount of money you have to pay each year before the policy kicks in; the latter is the amount you have to pay out of pocket for each condition (not claim, keep this in mind).

The amount of annual deductible varies from a hundred to a thousand dollars. Most companies offer a few options, starting at $50 (MetLife) and climbing upwards of $100.

Best Pet Insurance In The U.S.

As you already know, pet insurance policies aren’t fully standardized. The coverage excluded by insurer A (for example, cruciate ligament surgeries) may be provided by insurer B, which is why it would only be wise to review at least a few options before taking action.

Among the pet insurance leaders are Embrace, Lemonade, Pets Best, Figo, Prudent Pet, and Nationwide, each of which has unique features. For example, Embrace is known for its abundance of benefits: Lemonade – for affordable prices for puppies, Pets Best – for a wide range of deductibles, and so on.

Use this comparison table to find out your best pet insurer.

How To Enroll In Pet Insurance?

  1. On the insurer’s website, file an online application indicating your pet’s name, species, breed, age, and other details if requested.
  2. Make sure your pet has visited a vet in the last 12 months, as your pet’s medical records will be requested and examined by the insurer.
  3. The coverage will start working after the waiting period, depending on the insurer.

Cat Insurance

How To Submit A Pet Insurance Claim

  1. Get the invoice from the vet.
  2. Submit your claim either on the insurer’s website or via the app (if there’s one). Follow the given guidelines.
  3. Your claim will be processed in up to three weeks, except the first claim may take longer to conclude.

How To Cancel Pet Insurance?

To cancel your pet insurance policy, you have to call your insurer or notify them in writing. This can be done at any time, but – depending on the insurer – you may be required to pay the total amount of premium for the remainder of the current period.

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Oleksandr Rohovnin is a Content Marketer at and an expert contributor to American REIA. His passion is digital marketing, innovative technologies, tech industries, and – above all – distilling vast amounts of complex information into engrossing narratives anyone can relate to. At American REIA, Oleksandr stokes passion for auto insurance and the automotive industry in general in every story he curates.

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