Category: Dog Insurance

Pet Insurance Reviews: Healthy Paws, Petplan, Pets Best

All types of companies offer pet insurance. There are mega-insurers like Nationwide and interest groups like the ASPCA, each of which offer a wide range of policies. And naturally there are stand-alone insurers which specialize in the business of pet insurance.

However, three companies – Healthy Paws, Petplan and Pets Best – stand out for their combination of affordable premiums, customizable plans and robust benefits. How do they compare against each other? We decided to find out by taking a deeper look at the providers and their programs, to see if there’s a “best” choice. Here’s what we found.

 

Who Are They?

The background of a pet insurer really does make a difference. One big reason: there are no “pre-existing conditions” guarantees for pet insurance, so once a pet develops a disease or illness it’s no longer realistic to switch policies. If you did, you’d no longer be able to insure your pet for a pre-existing problem. In order to keep complete coverage in effect you’ll have to maintain the same policy, with the same provider, for the life of your dog or cat.

That’s why the first thing we looked at was the background and stability of each of the three pet insurance providers on our list; before entering into a long-term relationship with an insurer, it’s crucial to know exactly who your “partner” will be.

Healthy Paws

Healthy Paws has been around since 2009. It was created by two men who met at their city’s no-kill animal shelter, an insurance executive and the shelter’s director. Their shared passion for shelter animals and pet health led them to start Healthy Paws Pet Insurance and Foundation. The company has broken ground in the areas of ease-of-claims and customer service and is constantly rated #1 by customers surveyed by independent reviewers; the foundation has issued grants to hundreds of shelters and rescue organizations.

While Healthy Paws may be less than ten years old, it is on firm financial footing. It has partnered with the $30 billion global insurance broker Aon Corporation, and its policies are underwritten by the enormous insurance company The Chubb Group.

Petplan

Petplan is only a few years older than Healthy Paws, with a compelling back story. The company was founded by a couple (both Philadelphia-area MBAs) who had to go into debt to pay enormous vet bills for their sick cat. Petplan is the sister company of the world’s largest pet insurer, Petplan UK, and provides insurance coverage for organizations like the U.S. Humane Society.

All of the company’s policies are underwritten by A+ rated insurance companies, AGCS Marine Insurance (a member of the Allianz Group, the world’s third-largest financial services company) and the multi-billion dollar XL Specialty Insurance.

Pets Best

The co-founder of Pets Best is a veterinarian who actually created the first pet insurance company in North America in the 1980s, after experiencing the trauma of a family that had its dog euthanized because it couldn’t afford medical bills. His company was the one which wrote the first-ever U.S. pet insurance policy, for TV star Lassie. The eventual outgrowth of his work was the creation of Pets Best in 2005. The company has also become known as the first to offer a full electronic claims filing system, complete with direct deposit of reimbursements.

Policies are underwritten by American Pet Insurance Companies, a large specialty company specializing in pet health insurance coverage for a number of large providers, or by the Independence American Insurance Company, a member of the NYSE-traded IHC Group.

In short, all three pet insurance providers are reputable, well-backed and well-funded, and run by professionals deeply and personally invested in pet wellness and care.

Plan Comparisons

Accident-and-illness pet insurance is, by far, the most common type of coverage chosen by pet owners, because it covers nearly all of the enormous veterinary expenses the owners may face over the lives of their pets. Some providers also offer accident-only policies, or separate coverage that pays only for wellness visits, shots and treatments, and we’ll look briefly at the less-popular options in a bit.

However, we’ll primarily be focusing on the accident-and-illness policy offerings from each of the three companies we’re considering. Here’s an overview of their so-called “major medical” plans.

In this section we’ll be looking at several key variables:

• Deductibles – the amount you have to pay out-of-pocket before insurance kicks in.
• Copayments – the percentage of the bill you have to pay once the deductible has been met.
• Basis for payment – whether the reimbursement is based on your actual bill or a pre-determined cost for the treatment.
• Claim limits
• Processing procedures

Healthy Paws

One of the best ways to get the pet insurance plan that meets your needs is to choose a provider which offers many policy options. Healthy Paws has lots of them.

• Deductibles: You can opt for an annual deductible of $500, $250 or $100 on any policy. Naturally, the higher the deductible, the lower your premiums will be. All deductibles are based on yearly spending, not on the “per-incident” or “per-condition” basis that many companies use (those latter deductibles usually end costing the pet owner more over the long term).
• Copayments: You can choose between policies with 10%, 20% or 30% copayments, meaning your reimbursements will be 90%, 80% or 70% of the bill once your deductible has been met.
• Basis for payment: Your reimbursement is based on the amount that you’ve been billed, rather than the “usual and customary” charges the insurer feels you should have been charged for any specific procedure.
• Claim limits: There are no limits or annual maximums of any kind. Healthy Paws guarantees unlimited lifetime benefits for covered services.
• Processing procedures: No physical paperwork is needed. Claims can be submitted by sending a copy of the bill via a smartphone app or online portal, and are usually paid within a week.

Petplan

Petplan provides even more options for pet owners than Healthy Paws. However, some of the company’s basic plans come with less-desirable features, requiring you to pay extra for some benefits that are standard with all Healthy Paws coverage.

For now, let’s break down the petplan review based on the following criteria.

• Deductibles: The amount of flexibility that Petplan offers for deductibles is extremely impressive, from a low of $100 to a high of $2500; premiums are dramatically lower if you choose a very high deductible amount. Additionally, you can choose between an overall annual deductible, or ones that are set per-condition and reset every year.
• Copayments: The standard 10%, 20% or 30% copayment options are available, making your reimbursements 90%, 80% or 70% of the bill once your deductible has been met.
• Basis for payment: Reimbursements are based on the total veterinary bill, and not often-lower “usual and customary” charges.
• Claim limits: Just as with deductibles and copayments, Petplan offers a wide range of choices on payment limits from $2500 per year to unlimited reimbursements. Premiums vary depending on your selection; naturally, you’ll pay more for a policy without limits on claims.
• Processing procedures: The insurer has recently added an app for claim submission via smartphone, which can also be done via online portal, fax or mail. They often take significantly longer to pay claims, however.

Pets Best

Our third option also provides a large number of customizable choices to create a policy that meets the needs of almost dog or pet owner, with more flexibility than the competitors in some areas and less flexibility in others.

• Deductibles: The choices you’re offered range from a higher-priced zero-deductible policy to a much less expensive $1000 deductible, with a number of options in between.
• Copayments: Pets Best offers the highest number of options of the three insurers, including a 0% copayment alternative (meaning they pay 100%) as well as the more usual 10%, 20% or 30% choices.
• Basis for payment: Reimbursements are figured on actual vet bills, not on a predetermined schedule of usual and customary fees.
• Claim limits: You can choose the limits that work best for you when you customize your plan: maximum annual payout limits of $1000, $5000, $10,000, $20,000 or unlimited, and maximum lifetime benefits range from $5,000 to $200,000. However, there are strict and low lifetime limits imposed on hereditary conditions, between $250 and $1000.
• Processing procedures: Electronic submissions and direct deposit reimbursements are both available, with payments often made in just a few days.

All three insurers will cover both dogs and cats, and all provide coverage for purebred pets. However, you’ll have to pay more for dogs than cats, more for larger dogs, and often much more for purebreds.

Insurer by Insurer: Coverages They Provide, Breeds They Cover

All three companies provide accident-and-illness coverage for the major expenses that owners of sick or injured pets can expect to face over time: emergency treatment, diagnostics and advanced tests, hospitalization, surgery and aftercare. They will all also cover chronic, hereditary and congenital conditions – one of the big reasons they’ve made the cut for our top three pet insurance reviews.

As always, though, the devil is in the details; each plan has its peculiarities or exclusions, and it’s important to distinguish between them before making a choice. We’ll be running those down now, along with information on the companies that also offer accident-only or wellness policies, or other types of unusual insurance options.

One explanation first. We’ll be making general observations about each company’s pricing policies based on a wide survey of policies. For the sake of examples, though, we’ll also show pricing for three theoretical pets: a three-year old medium-sized mixed-breed male dog, a similar English bulldog (the most expensive breed to insure), and a three-year old domestic short hair male cat. All prices are for policies with $250 deductibles, 20% copayments and no maximum annual reimbursement limit ($15,000 for Petplan, which is the highest option they offered us for our sample pets).

Healthy Paws

• Pros: Prescription drugs are included with all Healthy Paws plans, as is alternative care such as acupuncture, physical therapy and chiropractic. As long as a pet is enrolled by age 13, coverage continues for life as long as premiums are paid.
• Cons: Healthy Paws does not cover behavioral therapy, pregnancy expenses, or hip dysplasia for dogs enrolled in a plan after age six. There’s also a 12-month waiting period after the purchase of a policy for hip dysplasia coverage to take effect, and a dog that has a pre-existing ACL problem in one leg cannot be covered for the other. Perhaps most importantly, once a pet reaches the age of eight the policy reverts to a standard $500 deductible and 30% copayment.
• Other notes: There is no wellness or accident-only policy available from Healthy Paws.
• Prices: Healthy Paws falls squarely into the middle of the pricing spectrum, but with more benefits generally available for their premiums. Our mixed breed pup’s policy would cost $40 per month, the English bulldog would cost $117 per month, and the cat’s insurance would cost $26 per month.

Petplan

• Pros: Prescriptions are covered by Petplan, as are alternative therapies if performed by a veterinarian, and a limited amount of behavioral therapy if there is an underlying medical cause. There is no age limit for enrollment and Petplan does cover some complications of pregnancy. You also receive a 5% premium discount if you order online.
• Cons: Reimbursement will be denied if a pet hasn’t been seen within 48 hours of an accident or the onset of an illness, and will also be denied if the pet hasn’t had an annual wellness visit. Once a pet has had an ACL injury, there are limitations on payment for a similar injury to the other leg. Petplan is also known to be much stricter when deciding whether an issue is a pre-existing condition. Premiums increase as a pet ages, but the price hikes vary with different coverage options and breeds.
• Other notes: Petplan does not offer wellness or accident-only policies.
• Prices: Petplan is the most expensive option of our three insurers for most pets; checking our three example pets the pricing is $55 per month for the mixed-breed dog, $117 for the English bulldog and $30 for the cat.

Pets Best

• Pros: There is limited behavioral coverage available, and alternative therapy treatments will be covered if an add-on rider is purchased. Pets Best does not have an upper age limit for enrollment. A 5% multi-pet discount is available.
• Cons: Prescription drugs are not covered unless an add-on rider is purchased. Pregnancy and (surprisingly) parasites are not covered. There is a six-month waiting period for ACL coverage after a policy is purchased, and premiums do increase as your pet ages.
• Other notes: Pets Best offers two wellness plans and one accident-only plan. Both wellness programs cover up to $50 for a routine vet visit, but the higher-level plan pays a little more for each visit or procedure; for example, $60 vs. $50 for flea and tick prevention, and $25 vs. $15 for a urinalysis. Total benefit ceilings are $535 vs. $305, and the monthly premiums are $25 for the better plan, $15 for the lower-level one. The accident-only program has a flat $250 deductible and 10% copayment with a $10,000 annual limit, and doesn’t cover hip dysplasia or ACL injuries. It costs $9 monthly for dogs, $6 monthly for cats.
• Prices: Pets Best is a lower-priced option for most pets, but with more exclusions placed on their policies. Our example pets’ policies would cost $30 per month for the mixed-breed dog, $67 for the English bulldog and $18 for the cat.

Each of our three insurers will insure all breeds of dogs and cats, but all will charge more for purebreds, sometimes substantially more than one another because of their susceptibility to genetic illnesses and conditions. The least-expensive option for insuring a purebred is Pets Best. But considering the usually-higher medical costs these breeds incur later in life, a pricier option could easily be the best choice for your pet. Be sure to carefully compare coverage and exclusions before buying only on price.

Uniqueness of Insurers and Plans

The details we’ve provided should give you a good feel for each of the three companies we’ve compared, but here’s a brief summary of what we’ve found and what makes each insurer and their policies unique.

• Healthy Paws: The most comprehensive coverage at reasonable prices with absolutely no maximum limits whatsoever, plus full coverage for prescriptions and alternative therapies.
• Petplan: Robust coverage but at higher premiums, particularly when you choose lower deductibles and higher maximum payouts. Petplan is also known for being more difficult with claims approval and slower to pay.
• Pets Best: A very good selection of plans for lower prices although the benefits provided are noticeably lower as well, with extra payments required for coverage of prescription medications and alternative therapies. However, they’re the only one of our three insurers to offer wellness and accident-only coverage.

The Best Option for Most Pet Owners

Whichever provider you choose, you now understand why it’s essential to purchase a pet insurance policy as soon as possible. Once your uninsured pet develops any type of health issue, you’ll not only be faced with potentially-huge veterinary bills – but he will immediately become “uninsurable” for that condition for the rest of his life. For the majority of dogs, and even cats, that’s likely to mean thousands – or tens of thousands – of dollars in medical expenses that could easily be avoided, just by making a relatively-small monthly payment.

So which option should you choose? We believe that Healthy Paws is the top choice for pet insurance. The premiums are attractive for the full coverage that’s provided, with few limitations, quick payouts and easy-to-navigate customer service. Petplan and Pets Best tie for second place behind Healthy Paws in our opinion. Petplan’s coverage is better than Pets Best in most cases but you have to pay a lot for it, while Pets Best is a very good budget choice with policies that are still far superior to most insurers, but don’t match the overall quality of Petplan or Healthy Paws.

Healthy Paws constantly receives the highest customer reviews of all major pet insurance companies, and our in-depth comparison makes the reasons clear. They offer highly-customizable policies at affordable prices, plus the best coverage. That’s a winning combination every time.

What Is Pet Insurance?

The simple answer to the question “What is Pet Insurance?” is the obvious one: it covers some or all of your pet’s medical bills, in return for monthly or annual premiums.

Unfortunately, when you dive deeper into the subject you find that there really is no simple answer to the question. That’s because there are several variations of pet insurance, plus the same annoying and confusing deductibles and copayments that we face with our own health insurance. There’s even the “preexisting conditions” issue that has come to dominate medical insurance discussions in the human world.

It’s easy to dismiss pet insurance as simply a money-making gimmick when you adopt a young puppy or kitten, and are given pet insurance sales pamphlets during your first appointment with the vet. Puppies and kittens eventually become mature dogs and cats, however, and the medical bills that older pets can run up are often staggering. It costs thousands of dollars to treat senior dogs and cats for relatively-common pet illnesses like kidney disease, diabetes or cancer – and those costs often lead to one of the saddest decisions any pet owner could ever have to make, the one that veterinarians euphemistically call “economic euthanasia.”

Pet insurance has actually been around since the late 1800s, when it was offered only in parts of Europe for horses and farm animals. In the mid-1900s it became available for British house pets, but the first American policy wasn’t written until 1982 and it was for a celebrity: the TV dog Lassie. Pet insurance is somewhat popular in nations like Sweden and the U.K. where nearly one-quarter of pets are covered. In the U.S., though, less than one percent of pet owners have insured their dog or cat, and many still don’t even know that insurance is available.

To better understand the confusing world of pet insurance – and figure out if it’s worth the premiums – it’s first necessary to look at how these policies work, and what they will and won’t cover.

Pet Insurance vs. Human Insurance

Most of us are somewhat familiar with the basic structure and limitations of human health insurance. There are a number of similarities, but let’s start with the good news.

• You don’t have to carefully choose a vet to fit your policy, because there’s no such thing as in-network and out-of-network providers. You can go to any veterinarian, clinic or animal hospital you’d like, and the expenses will be covered according to your policy.
• There aren’t dozens or hundreds of “gold, silver or bronze tiers” of coverage to sort through. Most providers offer a simple choice of accident or accident-and-illness coverage, with a few also willing to cover wellness visits at higher rates.
• Pet insurance policies aren’t overly expensive. Accident-only policies normally run a couple of hundred dollars a year at most, with the average accident-and-illness policy in the $400-500 neighborhood for dogs and $200-$300 for cats.

So far, so good, right? Now, unfortunately, it starts to get more complicated as pet policies start to look more like our own health insurance in several ways. Here are the three most common.

• Pet insurance policies carry deductibles, which are sometimes calculated on an annual basis and sometimes kick in “per incident.” Most providers let you choose the level of your pet policy’s deductible, which can range anywhere from $50 to $1000. Naturally, choosing a lower deductible increases the price of the policy.
• There are also copayments required; in other words, after you’ve met the deductible you’ll still have to pay some percentage of the bill. Different companies figure their reimbursements in different ways. Some will pay a set amount “per procedure,” some pay a specific percentage based on what the vet charges, and others pay a percentage that’s based on the “usual and customary charges” for your area (which means that going to an expensive vet or animal hospital may cost you more out of pocket). The amount you’ll have to pay is usually 30% or lower.
• Many companies will start increasing your pet’s premiums as he gets older. Higher charges usually kick in at the age of 6 or 7.

In three respects, pet insurance resembles the way that humans’ health coverage was handled before the Affordable Care Act (also known as Obamacare) was passed.

• Most insurance providers have a maximum benefit that they’ll pay, and once again that level is up to you. Premiums will be higher, of course, if you choose a high maximum benefit. A few insurance providers have no maximums.
• Preexisting conditions are not covered by most pet insurance policies. That’s why you shouldn’t put aside your decision on whether or not to purchase insurance for your puppy or kitten. It may seem crazy to maintain a policy for your healthy young pet, year after year. But if an uninsured pet develops symptoms as general as “digestive issues,” that may make him ineligible for any insurance coverage for any disease that causes digestive problems – for the rest of his life.
• Finally, if your pet hasn’t been to the vet for more than a year, some insurers will require that your pet be seen before they’ll issue coverage (obviously, to determine any preexisting conditions).

So, pet insurance is less complicated than our own health coverage in some ways but more restrictive in others. Next, we’ll take a look at the issues which only apply to pets.

Ins and Outs of Pet Insurance

It’s obviously against the law for human medical insurance companies to discriminate against applicants because of their genetic background. It’s accepted practice for pet insurance companies, though, and for very good reasons.

A large number of purebred dogs are more susceptible to specific illness or injuries because of their genetic makeup, and companies usually charge more to insure them. As just a few examples, Labs are at risk for a number of eye diseases, German Shepherds are more likely to develop hip dysplasia, Lhasas may contract a hereditary kidney disease and boxers (one of the most expensive breeds to insure) suffer from cancer at much higher rates than average. Cats aren’t immune to this issue; for instance, insurance costs more for Siamese cats because of their predisposition to respiratory problems. A few companies even refuse to cover a few select breeds of dogs or cats.

A breed’s behavioral tendencies can also play a role in pricing. For instance, purebred dogs like golden retrievers and pit bull terriers more commonly ingest foreign objects which are quite costly to remove and treat.

There’s another factor in the price of pet insurance: size. It naturally costs more to treat larger animals, particularly dogs, because they require larger doses of medications and often more technicians. Large dogs are also more likely to develop joint and bone problems. And it’s common for some smaller short-nose breeds to develop airway obstructions and diseases. All of those facts are reflected in pet insurance premiums.

As a general guideline, the North American Pet Health Insurance Association says that the most expensive dog breeds to insure are English bulldogs, Burmese Mountain dogs, Rottweilers and Great Danes. The most expensive cat breeds are Siamese, Bengals and Himalayans. The least expensive pets to insure are small mixed breed dogs and cats which have spayed or neutered. But don’t despair; the difference in premiums isn’t enormous, perhaps an extra $10-15 per month.

You’ll notice we’ve only been discussing dogs and cats, and that’s because nearly all of the pet insurance policies issued in the US are written for them (approximately 90% are for dogs). The average price for dog insurance is nearly double that of cat insurance, for the reasons we’ve mentioned, particularly size. A few companies offer pet insurance for horses or other pets like reptiles or birds, but that’s the exception and not the rule.

Here’s one more important difference between human and pet health insurance. Very few companies will reimburse the veterinarian before you pay your bill; older readers will remember a time when almost all of their claims had to be submitted manually to an insurance company for reimbursement, rather than being handled by the doctor or hospital. That older system is still the way that nearly all pet insurance companies operate; you’ll have to pay your vet bill in full, and then submit receipts in order to be paid. A few providers are starting to operate on a “human model,” but with those exceptions you’ll have to pay the total amount to the veterinarian or animal hospital before your pet can be discharged, and then submit for reimbursement.

How to Choose Pet Insurance

As with most purchases, some comparison shopping is required to find the best price and the best policy for your pet. That does require some research, but thankfully not as much as you have to do to choose your own medical insurance.

The first steps are to determine your budget, of course, and to figure out the type of coverage you’re interested in. Accident-only insurance will cost considerably less than accident-and-illness policies, and those that add wellness coverage for annual vet appointments or vaccinations into the mix will carry even higher prices.

You’re then ready to compare provider offerings side-by-side, and see how different choices of deductibles, copayments and maximum payouts will affect premiums. (Maximums can be computed on a number of scales, including per-incident, annual, lifetime or per body system.) Don’t forget to look at often-ignored issues like how various companies determine preexisting conditions (for example, does a generic symptom early in a pet’s life rule out coverage for any later-in-life illness that could theoretically be related?), and how much premiums will increase as a dog or cat gets older. One more factor can be waiting periods before policies take effect; some companies won’t fully cover your pet for as long as 12 months after you purchase insurance.

Is Pet Insurance Worth It?

On a purely mathematical basis, insurance is probably not a sound investment for the majority of pets. Most independent evaluations have found that over the life of a pet, very few insurance policies ended up paying out a total amount that exceeded the combined premiums that were paid. In most cases, there’s a usually-small monetary loss over the lifetime of a pet. Some policies do “pay off,” however, when a dog or cat suffers from some of the most expensive illnesses or injuries that are possible.

But what’s more important to consider is this: pet insurance “evens out” the cost of medical care over the lifetime of your best friend, while also protecting against an unexpected serious illness early in his life. Health care costs can mushroom as a dog or cat grows older, and regular vet or hospital bills of thousands of dollars are not uncommon for a ten-year old dog or a 15-year old cat. Paying $200-$400 per year to insure a pet throughout his life is, for most people, a lot easier to handle than a series of $2,000-$3,000 bills in rapid succession. And that’s not even considering the distressing “economic euthanasia” dilemma that those bills can cause for owners.

Consider a couple of examples. Consumer Reports tells of a young kitten whose total insurance premiums would have been well under $1,000 but whose heart condition cost more than $7,000 to treat. The magazine also looked at a Lab mix who developed skin cancer when he was 11, requiring two surgeries and lots of follow-up treatments. In his case, treatments cost nearly $10,000; several insurance companies would still have collected slightly more in premiums than the cost of that medical care, but another would have paid out more than the owner had paid in premiums over the dog’s lifetime.

In all cases, though, insured owners faced immediate out-of-pocket costs of just hundreds of dollars, rather than the $8,000-$10,000 they would have had to pay in a short period of time. In situations like that, even if they ended up a little “under water,” those who had been able to afford the much lower annual premiums were saved the potentially-catastrophic financial issue of finding huge amounts of money to save their pet’s life – or having to put him to sleep if they couldn’t afford the bill.

One other quick note: almost all independent evaluations have determined that “wellness coverage” for a pet is not a smart financial decision. Paying the annual vet bills is almost always cheaper.

So – Is Pet Insurance Really Worth It?

That’s really an individual decision, based largely on an individual’s financial realities; but if you think about the second word in the term “pet insurance,” you’ll realize that it’s not a purely economic decision based on the return on investment.

Chances are high that at some point in your pet’s life you’ll be facing some very large vet bills, and as often happens, they’ll quite possibly come at the worst possible time. Just as with humans, health insurance for pets protects against unexpected and horrendous expenses that could force a devastating decision, all for a pretty reasonable yearly fee. Most American pet owners don’t take that crucial fact into consideration. Perhaps they should.

 

What Should I Know Before Getting Pet Insurance?

You may have decided to purchase pet insurance for your dog or cat after lots of careful research and policy comparisons. Chances are, though, that your decision is simply based on the fact that pet insurance isn’t overly expensive and the gut feeling that it “makes sense.”

Both are true in most cases. However, if you purchase a policy when your dog is young and he lives a normal life span, the total you’ll pay for his coverage will be thousands of dollars. That’s why it’s smart to dig a bit more deeply into what you should and shouldn’t expect when you buy pet insurance, before pulling out your checkbook or credit card.

The First Things You Have to Know About Pet Insurance

Pet insurance isn’t a one-size-fits-all purchase. There are a number of decisions you’ll be required to make before you sign on the dotted line.

First of all, there are three categories of pet insurance: accident only, accident-and-illness, and wellness care. The vast majority of pet owners choose accident-and-illness policies, since those cover the two largest types of veterinary expenses they may face over a dog’s lifetime. (You can buy a policy to cover your cat as well, but we’re primarily focusing on dogs because more than 80% of all pet insurance sold in America is canine insurance.) Wellness coverage can be added on to a policy or purchased separately, but it’s not usually a smart investment.

Next, there are deductibles and copayment options to choose, just as we do for our own health insurance plans. Deductibles can be charged on a per-incident or per-year basis and you’ll be able to choose a deductible level that fits your budget, with lower deductibles meaning higher premiums. After the deductible has been met you’ll have to pay a percentage of your pet’s medical expenses, and once again the size of the copayment will have a major impact on the cost of the policy.

The one thing you don’t have to worry about is whether your vet is “in-network” or “out-of-network.” You can have your dog treated anywhere.

Those are the basics. Now, let’s look at what you can expect from your pet’s insurance policy.

What to Expect When You Get Pet Insurance

• Expect to be paying a monthly or annual bill throughout the life of your pet. When you’re thinking about the well-being of your dog, cost may not be the major consideration. But you’ll be paying hundreds of dollars per year for a pet insurance policy, with premiums often increasing (depending on the insurer you choose) as your dog gets older. Later in this discussion we’ll take a closer look at what your costs might be.

 

• Expect the overall cost of your pet’s health care to be spread out over time. It’s relatively inexpensive to take care of a puppy or a young dog; most of the time you’ll simply be paying for annual visits to the veterinarian, vaccines, flea control and heartworm treatments. Caring for dogs with the orthopedic issues or diseases they often contract in later life, though, can quickly result in thousands of dollars in veterinary bills, as can treatment for traumas like accidents or fights with other animals. Having “pre-paid” for much of that medical care with annual insurance payments has saved many owners from a heartbreaking decision on whether to put their dog to sleep because they can’t afford the bills.

 

• Expect that your pet will have to go in for a vet’s appointment if he hasn’t been seen within the last year. Insurers want to know his current health status before they’ll write a policy.

What Not to Expect When You Get Pet Insurance

• Don’t expect to walk out of the vet’s office without paying the full bill up front. Nearly all pet insurers work on a reimbursement setup, requiring you to submit an itemized bill in order to receive payment after your dog has been treated and released.

 

• Don’t expect a pet insurance policy to cover pre-existing conditions. Human policies used to be written the same way until the passage of Obamacare guaranteed coverage for pre-existing conditions. But nothing prevents pet insurers from refusing to cover any health issues which existed before the policy was purchased. This can get dicey, too; many insurers use general diagnoses like “bowel obstruction” as a reason to refuse payment years later for any illness which could have the same symptoms.

 

• Don’t expect that you’ll receive full reimbursement from your pet insurance company, even if you’ve met the deductible. Aside from the copayment issue, most policies carry maximum payment limits which could be per incident, per year, per body system or for the life of the policy. You can often select a policy with high payment ceilings, but you’ll pay more for the benefit.

 

• Don’t expect to be able to insure your purebred pup for the same price as a mixed breed. Most breeds have increased risks for different types of injuries or diseases, and the premiums charged for each breed reflects the expected cost of treating those problems. Similarly, it will usually cost more to insure a larger dog than a smaller one because it costs more to treat them, and you’ll even pay different premiums depending on where you live (think about the likelihood of your dog being hit by a car on a farm, compared to the danger of Manhattan streets, for example). The amounts may not seem like much on a monthly basis, perhaps $10 or $20, but they’ll add up to thousands of dollars over the life of your dog.

 

• Don’t expect to “make money” – or even break even – when you buy pet insurance. To put things simply, that’s not the reason you purchase it. In most cases you’ll wind up paying more for the insurance than you’ll get back in reimbursements, but you’ll have protected yourself against horrendous and unexpected medical bills, and ensured that your best friend will be able to get the treatment he needs no matter what your financial situation is when he needs it.

What is the Best Time to Buy Insurance for My Dog?

The best answer to this question: as soon as you can. And after reading the previous section, you can probably understand why.

The most critical factor is the preexisting conditions limitation we’ve discussed. It’s true that the majority of serious diseases don’t show themselves until a pet reaches adulthood, but waiting to buy insurance until then isn’t normally a good idea. There’s no guarantee that your dog won’t contract an illness sooner, and there’s also the “loophole” that allows insurers to refuse payment for any conditions whose symptoms may have appeared in earlier years – even if there’s no proof that those symptoms were related to a recently-diagnosed illness or disease.

A final reason to buy insurance early in your pet’s life involves accident coverage, which most owners smartly decide to purchase. Cancer or kidney disease may be more common later in life, but accidents can happen at any time. In fact, they’re more likely when a dog is younger and more active; the chances of a dangerous encounter with a coyote or car, or even a mistimed leap from the family room couch, are much greater for your frisky pup than for an older dog who sleeps much of the day away.

It’s true that every year you delay purchasing pet insurance you’ll be saving a few hundred dollars or so. But if your reasoning is that you’ll only be faced with major expenses for a serious disease like cancer or diabetes later in his life, think again. Veterinary care after a major accident can easily cost $2,000-$3,000 or more, even if surgery isn’t required. And surgery can push the bill well over $5,000, particularly for a large dog.

How can a vet or animal hospital justify those prices? Figure in costs for x-rays, scans and blood work (several hundred dollars apiece), hospitalization with all of the required nursing care, electronic monitoring, meds and fluids ($1,000+ per day), plus fees for veterinary specialists and surgeons, and you’re looking at an eye-popping bill. Even treatment for a common canine illness like bloat (too much stomach gas created after eating a large meal and then exercising vigorously) can cost more than $1,000 if surgery isn’t required, and as much as $5,000 including surgery and possible complications. The costs aren’t unfair in the least, but they’re a lot for most people to handle.

That’s why most people who’ve faced enormous or life-altering medical bills for their dog make sure to purchase insurance for their next pet, as soon as they take him to the vet for the first time.

What are the Major Price Points for Insuring My Pup?

How much does a car cost? That’s obviously an impossible question to answer; not only is a Kia going to be much less expensive than a Porsche, a Kia’s price will vary considerably depending on model, optional equipment and even the dealership you buy the car from.

Thankfully, pet insurance is much less expensive than even a Kia, but that doesn’t make it any easier to list firm prices for any type of policy. What we can do, though, is look at some of the average price points you’ll find for various types of pet policies.

For dogs, we chose a medium-sized, mixed-breed, three-year old neutered male living in a suburb of a large city, and a similar English bulldog (the most expensive breed to insure) for our examples. To compare prices for cats, we chose a three-year old, domestic short hair neutered male living in the same area. We compared three of the major pet insurers to come up with our price points.

Accident Only

Fewer and fewer companies offer this option, because most owners prefer to cover their pets for illness and disease as well as accidents. Those providers who still provide accident-only coverage for dogs will charge an average of $10-20 per month. Remember, this policy won’t cover any expenses for illnesses, diseases or costs possibly connected to pre-existing conditions. Only trauma-related procedures and related treatment are eligible for reimbursement.

Accident-and-Illness

Often called “major medical” plans, these are the options chosen by the large majority of pet owners. The policies cover almost all non-wellness veterinarian expenses with the exception of pre-existing conditions and cosmetic procedures. We’ve looked at three of the most popular pet insurance providers and the choices they offer for accident-and-illness coverage, in order to illustrate the major price points you’ll find for this type of policy.

Let’s start with our three-year old medium-sized, mixed-breed pup, and a fairly standard major medical plan. A policy with a $250 annual deductible and 90% reimbursement after the deductible is met (which represents a 10% copayment) would cost between $35-$40 per month, with the lower premium carrying a $5000 annual maximum and the higher premium placing no ceiling on reimbursements.

Changes that appear to be small can actually have a big impact on premiums. If you decide to eliminate the deductible completely, that increases the monthly payment to $100. And if you keep the deductible at $250 but boost your copayment to 30% (meaning you get only 70% reimbursement after the deductible), the average premium drops to around $30 per month.

Let’s look next at the most expensive breed to insure (because of hereditary disease and illness liability), the English bulldog. For the same “standard” accident-and illness policy we’ve discussed ($250 annual deductible, 10% copayment after deductible), the monthly premium would average between $48-$115 per month. Why such a huge variation? The lower number is with a $5000 annual maximum, but the higher one has no maximum annual payout. Placing no ceiling on payouts is a very risky proposition for companies insuring an English bulldog, so the resulting premiums are much higher.

That’s not the highest possible premium for our English bulldog, either. If you still want a low 10% copayment and no ceiling on payments, but want to lower the deductible to $100 instead of $250, you’ll have to pay almost $150 per month. You can even get a policy with 10% copayment and no deductible at all, but that will cost you more than $200 per month with a $5000 annual maximum payout.

Finally, let’s insure our cat. A standard policy with a $250 deductible and a 10% copayment will range between $20 and $40, with the lower premiums usually carrying a $5,000 annual maximum. You can lower that monthly bill to slightly less than $20 if you increase the deductible or the copayment.

But even with a $100 deductible, 10% copayment and no annual maximum, you can still find major medical insurance for your three-year old kitty for less than $40 per month. The bottom line: for cats, it makes sense to shop around and buy the best policy you can find, because you won’t pay much more for the low deductible and copay.

Wellness Coverage

We’ve mentioned several times that in almost all cases, it costs less to pay for your pet’s normal veterinary care out-of-pocket than to take out a wellness insurance policy. Here are the numbers.

The average amount a dog owner spends each year on vet bills is $350, and a cat’s annual visits, shots and the like add up to about $250. The average wellness plan (remember, it doesn’t cover treatments for illnesses, diseases or accidents) costs about $25 a month for dogs and about $12.50 per month for cats.

That sounds like a bargain – until you figure in deductibles ranging from $50-100, and limitations on every category of treatment. Once you do that, the numbers come out just about even, with the insurer naturally on the “winning side” of even. It’s easier to forego monthly premiums and just pay out-of-pocket for your pet’s regular care when it’s time to visit the vet.