The Complete Guide to Understanding Pet Insurance.

This guide was written by veterinarian, Dr. Marie of AskAVetQuestion.com

I initially set out to write an article that compared pet insurance companies and helped pet owners choose which company would best suit their needs. However, I soon realized that a task like that is a difficult one because there are so many variables! So, instead, what I have done is created a guide to help people understand their options when it comes to buying pet insurance. This guide has 6 parts:

• How pet insurance works.
• Who should have pet insurance?
• What does pet insurance cost?
• Important definitions: “premium”, “deductible”, “co-pay”, and “maximum payout”.
• Questions that you can ask insurance companies in order to help you choose which company is best for you.
• A word about insurance fraud.

What you won’t find here:

It is important to note that there are no affiliate links in this article. Why is that important? What you may not know is that the majority of articles that are written about pet insurance are created so that the website owner can make money from affiliate links. In these cases, a website may recommend a particular insurance company and link to them. If you click on that link and end up purchasing a policy, then the website that referred you will get a commission. The problem with this is that their recommendations are likely to be biased by which recommendations will make them more money. This article has been written from a non-biased point of view. I will share my experiences as a veterinarian and let you know what kind of good and bad things I have seen when it comes to clients having pet insurance.

How pet insurance works:

Usually, when an animal is insured, this is what happens:

• Once the veterinary visit is completed, you are responsible for paying the bill.
• Then, a form is filled out. In my office, the veterinary staff fill out the majority of the form. The form is signed by you (the pet owner) and also by the veterinarian. The veterinarian will also fill out information about the nature of your visit.
• The form is faxed (usually by the veterinary office, but sometimes by the pet owner) to the insurance company. In some places, the form can be submitted over the internet.
• A check is mailed to you for the portion of the visit for which you are entitled to reimbursement. (More on this later.) In my experience, most insurance companies are very quick to mail your check out.

Who should have pet insurance:

My personal belief is that the main point of having pet insurance is to help out in urgent situations. It is also very helpful if your pet happens to get diagnosed with a disease that will need lifelong medications or tests. I am not a fan of “wellness plans” that cover things like vaccinations, heartworm medications and routine dental care. These plans will cost you more, and in the long run you are likely to not be any further ahead than if you did not have pet insurance to start with.

However, consider the following situations. These are the cases where having pet insurance can really pay off:

• If your dog fractures a leg and needs orthopedic surgery, you could be looking at a $3000.00 vet bill.
• If your cat gets a urinary tract blockage and needs to stay in the hospital for 3 days it can easily cost $1200 or more. If a surgery is needed (such as a perineal urethrostomy) it can cost $3000.
• If your pet is diagnosed with diabetes you will have years and years of expenses for insulin and blood tests.
• If your pet gets a condition such as Addison’s disease, the yearly costs to maintain a dog can be thousands of dollars.

What does pet insurance cost?

There are soooo many variables when it comes to purchasing pet insurance. You can get plans for as little as $10 a month. But, you will find that the benefits of these plans are small. The amount you pay for your premiums will often depend on things such as your “Maximum Payout”, “Deductible” and “Co-Pay”. (I’ll define these later on in the article.)

On the flip side, there are some insurance plans that cost $80-$90 per month that will cover your annual vaccine visits, dental care, etc. and are usually extremely fair when it comes to payout amounts and deductibles. However, at almost $1000 per year, these plans are not going to be optimal for every client.

I have found that the plans that seem to make the most sense for people usually have a premium in the $35-$60 per month range.

So, let’s look at what variables there are when it comes to different insurance plans.

Definitions:

There are a few definitions that you will need to know when you are comparing pet insurance plans:

Premium: This is how much you pay the insurance company each month.

Deductible: Most plans will have a deductible that can be negotiated. The deductible is the amount of money that you are initially responsible to pay for the vet visit. (The remaining amount (minus the co-pay) is what the insurance company will send to you.) The deductible can be determined in several different ways:

• You may pay a certain amount per incident.
• You may pay a certain amount per body system. For example, you may have a $100 deductible for musculoskeletal conditions each year. Once you have paid this deductible, then if you had a second claim for a musculoskeletal problem in the same year, you wouldn’t have to pay any more deductible.
• You may pay an overall annual amount for deductible. Once that is paid, then you pay no further deductible for additional claims in the year.

Co-Pay: After the deductible is paid, then, depending on which policy you buy, you may still need to pay a percentage of the remaining bill. Let’s say your co-pay is 15%. Then this means that the insurance company would pay 85% the part of the bill that remains after your deductible is paid.

Maximum Payout: This is where things can get confusing. Many insurance policies will have a maximum amount that they will pay out. They may pay a maximum amount per incident, per body system (i.e. You might have $500 per year for skin problems), per the lifetime of the animal or per year. It is important to read this part of your contract well. It is very frustrating to see clients that have paid their premiums for years and then when their pet has an expensive accident they find out that their maximum payout is only $500. Fortunately, I have found that most insurance policies are fair. The plans that have a small maximum payout are generally plans with inexpensive premiums.

How do I choose a pet insurance company?

Here are the steps that I recommend that should help you to choose a good pet insurance company and also a plan that is fair:

1. Speak to your veterinarian:

Ask your veterinarian if they can recommend two or three pet insurance companies to you. Don’t worry; they are not going to make recommendations based on kick backs or financial incentives. If my clients ask me about pet insurance companies, I want them to use a company that I know has a proven track record of customer satisfaction.

If your vet has the time, it would be great if they would be able to tell you some of the more common major issues that your pet’s breed can get. Is your pet’s breed susceptible to hip dysplasia, skin problems, or cancers?. You will use this information when you speak to the insurance companies.

2. Contact several pet insurance companies and ask these questions.

Once you have the names of two or three companies, then start doing some research. I have found that the best way to do this research is to phone the company and ask them some specific questions. So, with pen and paper in hand, here are the questions that you should ask. I’ve also included an explanation as to why to ask these questions:

I have a [insert breed of dog or cat]. Are there any exclusions that are particular to this breed?

There are some plans that will not cover particular problems that are known to occur in certain breeds of dogs. For example, if you have a daschund, you want to be sure that IVDD (a serious back problem) is covered. Also, if it is covered, you want to know what the maximum payout is for this condition. IVDD surgery can cost $5000 or more. It would be awful to find out, after years of paying premiums, that your dog is not covered for this surgery, or that they will only cover $500 of the surgery.

If your vet was able to give you a list of common problems that your beed encounters, then ask the insurance about each one. Ask, “Would I have coverage for [this problem]?” If so, what is the maximum payout for that condition?

Will my premiums increase as my pet ages?

This is important to know. In some cases, the increase is mild and is likely worthwhile paying. But, I have heard of some plans that have drastic increases in premiums as the pet reaches a senior age. It is at this point in life when pets are more likely to have expensive medical bills. So, it is important to keep them insured!

Will my premiums increase if I file too many claims?

I have found that most insurance companies are fair on this point. I have had only two clients (that I know of) who had their premiums increased because of the amount of claims they filed. However, these pets had some very serious medical conditions and were making claims for vet bills in the tens of thousands of dollars. In both cases, the owners said that they understood the need for the premium increase and they were both very thankful that they had insurance to help them out.

Is cancer treatment covered?

Some plans have restrictions when it comes to treating cancer. Some will not cover certain chemotherapy agents or referral visits to a specialist.

Are specialist visits and emergency visits covered?

Most plans will cover referral visits, but not all. Some will only cover a small portion of fees incurred during referral visits. These visits can be expensive (i.e. referral to an orthopedic specialist). If only some referral visits are covered then write these down. If you don’t understand whether or not these specialists are likely to be important to you, then you can ask your vet.

Are pregnancy and breeding issues covered?

Obviously, this question only needs to be asked if you have an animal that is not spayed. Some people will buy insurance plans for breeding bitches in case the need for a C-Section arises. However, many insurance plans will not cover C-Sections because pregnancy is considered a “preventible condition”. If you plan to breed your dog or cat then be sure that they will be insured should there be problems!

Are there penalties if my pet becomes overweight?

Lately I have noticed that some insurance forms ask me (the vet) what the pet’s body condition score is. I don’t know this for certain, but I am wondering if insurance companies may start to exclude certain conditions if an animal is overweight. For example, we know that overweight animals are much more likely to have arthritis issues. You may find that some things are not covered if obesity is a factor. (If anyone has experience with their pet’s weight affecting their insurance payouts, please leave a comment in the comments section to let me know if my hunch is true!)

Are cruciate tears covered? If so, what is the maximum payout?

Some breeds of dogs (especially large dogs) are prone to tearing the cruciate ligament in their hind leg. This type of problem always needs surgery in order to be repaired and the surgery is usually between $2000-$3500. If you have a large dog, you need to find out what kind of coverage you have for cruciate tears. Also, if the dog has a cruciate tear, will he or she be covered if they end up tearing the ligament on the opposite leg a year or two later?

Are behavior issues covered?

This may not be a concern for every pet. However, if your animal develops issues with separation anxiety, aggression, etc. then only some plans will cover a referral to a behavioral specialist. Please note that if your pet already has a behavioral issue before you signed up for pet insurance, this would be counted as a pre-existing issue and likely would not be covered.

If my pet has more than one incident with foreign object ingestion, will all of the incidents be covered?

This is really important for owners of labs and golden retrievers. I have seen some dogs that need several surgeries in their lives because they have eaten things that they should have eaten! If you own a crazy breed of dog that is likely to eat silly things then it is important to make sure that multiple incidents will be covered by your insurance.

Are alternative therapies covered?

If you are ever interested in things like chiropractic care, acupuncture or physiotherapy, it is important to know that not all insurance plans cover these things.

Ask about specific pre-existing conditions:

If your pet has had any health problems in the past, then you need to find out how this will affect your future insurance claims. I had a client recently whose dog had a serious issue with a stone blocking his urethra. He was unable to urinate and needed emergency surgery. The client went ahead with the surgery, knowing that he was insured. When she made her $3000 claim, the company denied it. The reason? Before he was insured, he had had prostate issues. The prostate problems counted as a pre-existing urogenital problem. The plan that they had purchased had an exclusion that this dog would not be covered for any further urogenital issues.

It would be great to get a copy of your medical records and write down every medical problem the dog has had. Then, ask the company, “My dog had [roundworms, a bladder infection, etc.]. How will this affect my insurance? Will there be any exclusions because of this?”

What routine healthcare is not covered?

As mentioned before, I am not a fan of plans that cover routine things like vaccinations, etc. I am surprised, however, at how many of my clients think that they are covered for routine things and then get frustrated when their claims get denied. If you purchase an accident and illness plan, then you will likely find that you will not get reimbursed for vaccinations, annual wellness visits, spay/neuter, dental cleanings and heartworm testing/medications.

Ask about maximum payouts:

You will also need to ask questions about your options for premium costs, deductibles and maximum payout amounts. Be really cautious about choosing to have a lower monthly premium if it means that you have a lower maximum payout. This is where I have seen people be very frustrated with insurance plans. If your pet has a $3000 accident and you find that you only have a maximum payout of $500 that is not going to seem fair. You need to really understand the payout amounts before your pet has a problem! If it’s not clear to you, then write them down and ask your vet for their opinion.

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Insurance Fraud:

I can’t tell you how often I hear people say things like, “Doc, can you just not write on the file that my dog has a cruciate tear? I’d like to get pet insurance so that the surgery will be covered.”

Similarly, I have had a situation like this: A dog has a history of chronic skin problems and the costs are adding up. So, they go and see a second vet who has no knowledge of the previous skin problems. They apply for insurance thinking that they can use the medical records from the second vet and then the insurance company will not know about the previous medical problems. However, when you make your first insurance claim, one of the things that the vet is asked is, “Has this client been a patient of yours for more than 18 months?” If not, then they will ask you, the pet owner, to supply medical records from your previous vet.

This is why it is so important to get pet insurance when your pet is healthy! The vet will not falsify a record for you. When we sign the insurance form we need to state the approximate date when the problem started. We can be charged with insurance fraud and possibly lose our license if we falsify information.

You can't fool the system when it comes to making insurance claims!

Don’t cancel your insurance!!!

I have had several cases where patients of mine needed expensive treatment and their owners had recently cancelled their insurance policies! One of them is a 160lb dog who was diagnosed with Addison’s disease and needs thousands of dollars of medications and tests per year. If they hadn’t cancelled, then they would be much richer today! If you have insurance, please don’t cancel just because you haven’t had a claim yet. As your animal gets older, they are more likely to develop serious medical issues.

Summary:

Hopefully this has helped you understand a little bit more about pet insurance. If you have further questions, please leave a comment. Or, if you have had a frustrating (or a good) experience with an insurance company, please leave a comment as well. Your comments will help other pet owners!

I would greatly appreciate it if you share this article on Facebook or Twitter. I believe that a lot of people don't have pet insurance mostly because they don't understand how it works. Let's spread the word, get more animals insured, and help save pets' lives!

Dr. Marie.

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(Dr. Marie does not answer questions via the comments section, though!)

Dr. Marie was quick to respond and thorough in suggesting treatment for my cat. I am so thankful- I have been so worried about my cat. Now I have additional options to discuss with my vet.

The service was incredibly fast and the vet's suggestions were right on target. This was incredibly helpful given that none of the vets in my area, mine now included, will take off hours calls now.