How Does Pet Insurance Work?

Pet insurance can help cover medical expenses.
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For many pet owners, insurance can help protect against catastrophic veterinary care costs. However, pet insurance does not function in the same way as human health insurance. In most cases, pet insurance is more akin to property insurance. When the pet incurs "damage" in the form of medical costs, the owner submits a claim to the insurance company and is reimbursed. All pet owners should fully read their policies before signing a pet insurance contract.

Veterinary Policies

Some veterinarians and animal hospitals offer their own "pet insurance." These policies are actually memberships. The owner pays a set amount each year and then gets either a certain dollar amount of care, a discount on all care, or a preset number of visits. These agreements can't be transferred to other veterinarians and will not reimburse you for emergency expenses incurred at other veterinary hospitals. They will, however, cover the cost of care at the chosen hospital, though you may have to pay a deductible or some token amount. You will also not be reimbursed for any funds you did not use at the end of the year.

Pet Health Insurance

Pet health insurance is the most popular form of pet insurance purchases, and requires a monthly or annual fee to be covered. Many pet insurance companies cover any licensed veterinarian you chose, while others provide a list of qualified providers. Almost all pet insurance carriers have a deductible that must be paid each year before the insurer begins reimbursing for veterinary costs. However, some insurers cover basic care such as immunizations and neutering before the deductible is spent; these insurance policies are typically more expensive. When your pet requires veterinary care, you'll have to submit the paperwork directly to the insurer, who will reimburse you several weeks to several months later. In most cases, the reimbursement is 50 to 90 percent of the actual cost of veterinary care unless the insurer has arranged a set price schedule with your veterinarian. Health insurance usually covers emergency care and cancer treatments such as chemotherapy and radiation, but may not cover some genetic conditions such as hip dysplasia in German shepherds.

Pet Loss Insurance

Pet loss insurance usually comes as a part of health insurance, but can also be purchased as a separate policy. These policies reimburse you if your pet is lost, stolen or dies an untimely death, such as from an accident or an illness early in life. Pet loss insurance typically does not reimburse for the death of an older dog but will often cover burial expenses. This policy typically requires owners to submit paperwork verifying the value of the animal --including costs paid for the animal and expenses such as training -- and may, in some cases, pay the cost of burial or any costs associated with attempting to locate a lost pet. Pets who are not microchipped, who are permitted to roam freely or who are in poor health are typically more expensive to insure on these policies. Owners of expensive dogs and show dogs frequently purchase pet loss insurance.

Who Needs Insurance?

Owners who have invested lots of money in their pets should consider pet insurance in case their pets die or are stolen. If you are concerned that your pet may have long-term health problems or worry about your ability to pay for care costs, pet insurance may be a wise investment. If your pet is already sick, insurance may not cover health care costs, so check the policy before buying. Pet insurance is not a good choice for all owners, but if you do not purchase pet insurance, consider putting a small amount of money in a savings account each month to cover pet health care costs.


About the Author

Brenna Davis is a professional writer who covers parenting, pets, health and legal topics. Her articles have appeared in a variety of newspapers and magazines as well as on websites. She is a court-appointed special advocate and is certified in crisis counseling and child and infant nutrition. She holds degrees in developmental psychology and philosophy from Georgia State University.

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