Types of Pet Insurance Plans

According to the Insurance Information Institute, annual healthcare-related expenses approach $650 for dogs and exceed $350 for cats. On a monthly basis, pet care remains affordable for most households, but larger expenses can strike without warning, making a pet insurance plan an effective way to help pay for pet care costs.

Pet insurance plans are similar to health insurance plans for people. Similar to our health insurance plans, you’ll find different types of pet plans, each with its benefits and limitations. Some pet plans focus only on pet medical care due to accidents, much like a catastrophic health insurance plan available for people. Other plans offer coverage for illnesses, while more comprehensive plans bundle pet wellness coverage as well, helping to cover the cost of routine visits, emergency care, or surgical care. Expect to pay a bit more for plans that offer more benefits.

Accident-Only Plans

As the name suggests, accident-only pet insurance plans focus coverage on injuries due to accidents of various kinds. Broken bones are among the most common types of accidental injuries, along with bite wounds, cuts or swallowed objects. Accident-only plans may be a fit if you don’t want illness coverage or coverage for wellness visits. Accident-only plans can also be a useful resource for pets that don’t qualify for other plans. For example, older pets may not qualify for illness coverage but you can still purchase accident coverage.

Comprehensive Plans

Coverage features can vary with comprehensive plans, but you can expect wider coverage than with limited accident-only plans or pet wellness plans, which we’ll discuss next. Many providers bundle coverage for accidental injuries as well as illnesses, dental illnesses and even risks such as cancer. Some plans also offer chronic conditions your pet might develop, like allergies, diabetes or arthritis. Breed-specific conditions can lead to expensive vet bills, but some comprehensive plans offer relief, reducing your out-of-pocket costs if your pet is affected.

Pet Wellness Plans

In many cases, pet wellness plans are offered as an add-on to comprehensive pet insurance, although some plans offer pet wellness coverage as part of a larger package. Wellness plans offer some relief for the costs of routine vet care and help make costs more predictable.

Time-Limited Policies

Similar to short-term health insurance policies for humans, you can purchase time-limited pet insurance policies for pets. This type of coverage is among the more affordable options, but it comes with some caveats to consider.

Covered risks are only covered once within a set period of time. For many policies, this time period is defined as 12 months, although coverage for the same claim may extend into the following term if you renew the policy. Time-limited policies also prevent multiple claims for the same risk. For example, if your pet suffers an injury and the injury occurs later, perhaps even in another part of the body, the policy may treat the injury as a pre-existing condition and deny coverage.

Time-limited policies also limit the maximum financial benefit for covered risks. Covered risks are no longer covered once you reach either the time limit or financial limit for a given condition.

Maximum-Benefit Policies

Each condition has a cap for coverage, which means you’ll have to pay any additional costs above the cap out of pocket with a maximum-benefit pet insurance policy. This is similar to time-limited policies. However, 1 distinction is that with a maximum-benefit policy you can make multiple claims for the same illness or injury as long as your policy is in force.

Lifetime Policies

Assuming you renew your policy each year, a lifetime policy can protect your pet throughout his or her lifetime. Also, unlike simpler policy types, lifetime policies typically provide comprehensive coverage for most risks your pet might face. Many policies also include wellness care coverage either as a bundled benefit or offer wellness care coverage as an add-on to a comprehensive policy.

Pet Insurance Exclusions

Every insurance policy has exclusions, which refers to risks or expenses that aren’t covered by the policy or plan. For example, if your plan or policy doesn’t include wellness care, routine veterinary care won’t be covered.

Exclusions can vary, depending on the provider, but some common exclusions include:

• Routine vet visits: If your plan includes pet wellness coverage, this exclusion won’t apply.
• Pre-existing conditions: Think of pet insurance as coverage for what may happen in the future.
• Cosmetic procedures: These might include ear cropping or tail docking. Dew claw removal may also be excluded unless it’s deemed medically necessary.
• DNA testing: Cloning is usually excluded as well.
• Illnesses or injuries due to fighting, cruelty, or neglect: Some claims due to racing may also be excluded.
• Intentional injury caused by you or someone in your household.

It’s also important to note that coverage often requires a waiting period. While not an exclusion, your policy won’t pay for covered risks until the waiting period has passed, typically about 14 days.

Many policies also decline coverage for older pets. For example, some providers won’t cover dogs over 14 years of age.

Pet Insurance Cost

The North American Pet Health Insurance Association reports a national average monthly cost for pet health insurance of $47 for dogs and about $30 for cats. In Benzinga’s survey of 16 leading providers, we found an average monthly cost of $37 for pet insurance. However, coverage costs span a wide range. We surveyed prices at $13 per month and the highest-priced plan comes in at $72 per month.

Beyond the monthly cost for pet insurance, called a monthly premium, other restrictions or limitations can affect the overall cost of your pet’s veterinary care. For example, a deductible is the part of an insurance claim paid by the insured. Many pet plans use deductibles to help keep premium costs lower, but if your plan uses a deductible, consider putting some extra money aside to cover your share of the claim.

Copayments can also affect how much your plan pays toward a claim. A copayment is money paid directly to the veterinarian. However, with most pet insurance plans, you pay the entire amount to the care provider and your plan reimburses you according to the terms of your policy. Copayments, also called copays, can be either a percentage or a fixed dollar amount. To use an easy example, if a veterinary visit costs $200 and you have a 10% copayment, you would be reimbursed for the covered claim, but expect $20 to be deducted from the reimbursement.

Also, consider coverage limits for your plan. Some less expensive plans may have lower coverage limits that challenge the plan’s usefulness in a medical emergency. Insurance, in most cases, is intended to cover large expenses that can drain savings or force the use of credit.