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The Basics of Pet Insurance

Pets have become an endearing part of American culture, currently residing in over two-thirds of American households. For many of these households, pet insurance is quickly becoming a necessity, a direct result of the rising costs in veterinary care. While pet insurance does have many similarities to regular medical insurance for humans, there are some significant differences that pet owners need to be aware of so they can provide the best medical care possible for their pets.


Plan Coverage

Most pet insurance plans will cover a wide range of illnesses and accidents and will allow owners to see the veterinarian of their choice. However, it is important to note that dental work, behavioral issues, and preventative care are usually not covered in most standard plans. Many companies do offer more comprehensive plans that may cover these aspects of pet care, albeit at a much higher monthly premium. As a general rule, most plans fall into 3 different tiers or categories: accident only/basic, accident and illness/comprehensive, and wellness/preventative. In most cases, plans with a lower deductible and higher reimbursement percentages will reduce out-of-pocket costs significantly but will result in higher monthly premiums and vice versa.


Plan Structure

Pet insurance plans contain monthly premiums, much like regular health insurance, while also utilizing deductibles and an annual maximum amount that the insurance company will pay in a given year. Most deductibles range from $0 to $1000 depending on the plan, and will usually pay from 50% to 100% of the bill once the deductible is met. One key difference in pet insurance plans is that they function exclusively as a reimbursement insurance program, requiring the policyholder to pay for all medical costs upfront, and then submit a claim later for reimbursement.


Pre-existing Conditions

One of the biggest differences between pet insurance plans and regular health insurance plans is that most pet insurance plans do not cover pre-existing conditions. As a result, it is important to get an insurance plan early on in a pet's life to ensure a consistent, capable, and cost-effective level of care for the duration of their life. One notable exception to the non-coverage of pre-existing conditions among the pet insurance industry is the company Embrace, which will cover curable pre-existing conditions in certain circumstances.


Premium Rates

Monthly premium rates can vary, but generally fall around $10 a month for accident only/basic coverage for cats and $15 for dogs, $30 for accident and illness/comprehensive coverage for cats and $50 for dogs, and $25 a month for wellness/preventative coverage for both cats and dogs. Factors affecting monthly premiums include the species, breed, and age of the pet. As noted in the average monthly premium rates, dogs are much more expensive to insure than cats, whereas larger pets generally develop more health issues and have shorter life spans, incurring higher premium rates than smaller pets. Other factors affecting premium rates would include age, with younger pets having much lower monthly premiums, and location, with more densely populated areas resulting in higher monthly premiums as well.