Healthcare for pet has, thankfully, become more sophisticated over the years and skilled veterinarians are increasingly able to diagnose and treat ailments earlier and faster—extending the lives of our beloved pets.

But as with people, the advances in science, technology and healthcare often come with a price—literally. This month we focus upon the role pet insurance may play to help you manage the expense of keeping your pet healthy.

Role of Pet Insurance

The objective of all insurance is to limit the size of a financial loss to an “acceptable” level in return for periodic premium payments. The aggregate premium payments are used by the insurance company to pay the expenses of those who experience losses above their threshold.

As with all insurance, each family or individual needs to find the right balance between premiums and the financial protection they receive. And just like health insurance for people, the ideal balance must also be found for protecting our pets.

Categories of Pet Insurance
There are three broad categories of pet insurance.

  1. Whole Pet: Covers everything from nose to tail including wellness visits, routine treatments, illness and accidents.
  2. Illness and Accident: Covers most non-check-up related illnesses and unforeseen accidents.
  3. Accident-Only: Covers a defined list of accident-related injuries which, on their own, can be quite costly.
Example Covered Afflictions by Category and Commonly Supported Treatments*

Categories of Pet Insurance

*Examples only. Each Provider determines the covered procedures and treatments

Premium-Benefit Tradeoff
Beyond selecting the coverage category, the attributes of the plan you select will have the greatest impact upon your regular premium. For example, a plan with a $100 deductible will cost more than a plan with a $250 deductible. And a plan that has an unlimited annual payout will cost more than a plan with a $5,000 annual cap.

So, it’s vital to determine what is important to you—and then try multiple scenarios from several insurance companies to find your “sweet spot.” Fortunately, most pet insurance companies provide interactive pricing calculators so you can try multiple scenarios to deliver the maximum coverage for your budget.


Pet Insurance Tradeoffs

Beyond selecting coverage levels, there are several additional factors that directly impact your premium, including: 

  • Pet Type: Cats and dogs, even of the same age, are frequently priced differently
  • Pet Age: Younger pets tend to have fewer health issues and therefore typically have a lower premium.
  • Pet Breed: Some breeds are pre-disposed to particular ailments, so their premium can be higher.
  • Your Location: Where you live has a direct impact upon your cost of living—and your veterinary bill.

Waiting Periods and Exclusions

Accident coverage will usually commence the day of or the day after purchase. However, your insurer may impose a waiting period (typically 15 or 30 days) prior to covering illnesses or available treatments.

And because many insurance companies are for-profit organizations, most will not provide coverage for pre-existing conditions, breeding/pregnancies, cosmetic procedures (such as tail docking, ear cropping, etc.) or final arrangements upon a pet’s passing.

Also, some providers will not issue new policies for pets beyond a specific age—but they often "grandfather" current pets as they age.


Nearly all modern pet insurance plans require you to pay for your pet’s medical upfront. Then, armed with receipts, you can submit your expenses online, via a phone app or by paper. Your submissions will be carefully reviewed against your policy, and all eligible expenses will be refunded to you via a check, direct deposit or credited to your credit card. Recall, the amount of money you receive is defined by your plan selections—including the annual deductible, the reimbursement level, the maximum annual benefit and whether or not the plan pays based upon a set price list of “reasonable and customary” expenses for defined procedures.

Example Pet Insurance Providers
Over the past decade, the market for pet insurance has rapidly grown, become more competitive and gone mainstream. When considering pet insurance, you may want to first contact your insurance agent to leverage possible multi-policy or multi-pet discounts, and to obtain recommendations. You can also find providers online as you obtain quotes from their real-time pricing applications. Example companies include (although we endorse no specific company):

Alternatives to Pet Insurance

A viable alternative to pet insurance is to consider “self-insuring.” This means you first locate a provider, coverage level and monthly premium that you find most appealing. Then, open a bank account with the sole purpose of acting as your pet’s medical fund—and contribute to it every month. So, if your pet’s monthly premium would be $50, then after three years you will have $1,800 in your pet’s medical fund.

Do Your Homework
It is essential that you understand the services and conditions that are covered—and those that may change from time-to-time. Also, you should expect that your pet’s annual premium will increase every year as they age. So, set a budget and see if pet insurance makes sense for your particular situation.

Always be sure that you purchase from a reputable pet insurance company with a successful history of operation. You can review the financial stability of any insurance company by searching on A.M. Best.

And don’t forget to ask your friends for recommendations. You’ll receive great information to get you started on your assessment.