If you own a pet, you know that veterinary bills can be expensive. Since your pet is a member of your family, of course you want to do everything possible to help him live a long and healthy life. This means that both routine and non-routine vet visits are going to be par for the course as a pet parent. One question that many pet owners have is whether they should get pet insurance. That is a question that you need to answer for yourself, but it can be helpful to understand how pet insurance works so you can make the best decision for your particular circumstances.
Choosing a Pet Insurance Plan
Unlike health insurance for humans, your choices when it comes to choosing a pet insurance policy are nearly limitless. You aren’t bound to choosing between a couple plans offered by your employer, and there is no mandated coverage, so you are free to choose whatever type of plan meets your needs. While this is a good thing, it also means that you will have a lot of homework to do when it comes to picking out the right plan for you and your furbaby.
In general, there are three main types of pet insurance plans. Some will differ depending on the company, but for the most part, you’ll be choosing one of these options:
- Accident-only coverage. This means that routine visits and illnesses are not covered, but accidents are. So if something happens to your pet, like he’s hit by a car, tears a ligament playing fetch, or decides to eat a throw pillow while you are out of the house, treatment will be covered.
- Accident and illness coverage. This is a coverage that will include accidents as well as sicknesses. If your dog picks up a communicable disease or develops a chronic or serious illness like cancer, you will be able to get reimbursed for the cost of treatment.
- Accident, illness, and wellness coverage. This is the most comprehensive type of coverage (and also the most expensive). In addition to all of the above being covered, you’ll also be reimbursed for vaccinations, annual visits to the vet, and monthly heartworm and flea and tick medication.
You’ll want to look at your overall financial situation. Does it make more sense for you to pay more each month and not have to worry about paying for routine veterinary care or to spend less in premiums while paying out of pocket for vaccines, neutering, and so on? Again, only you can make that determination. You can read more about what pet health insurance covers here. Once you decide on the type of plan that is best for your family, it’s time to make sure you understand the details of your plan, including the pet insurance terminology.
Understanding Pet Insurance Terminology
If you have health insurance of your own, you might already be familiar with some of these terms, but it doesn’t hurt to refresh your memory. If you don’t know the terms, you might find that they even help you navigate your own health insurance plan! Getting an online quote will help you put all of this information into perspective so you can decide what is best for your situation.
- Premiums: Premiums are typically paid monthly and reflect the amount of money you’ll pay each month for your pet’s coverage.
- Deductible: A deductible is the amount of money you will need to pay out of pocket before the insurance plan will reimburse you. The deductible can be per incident (an incident is one illness or one accident) or per year. Be sure that you are clear on which type of deductible you are signing up for. If the deductible is $100 per year, then you will only be responsible for that payment once each calendar year. If it is per incident, then every time your pet gets hurt or sick, you will pay another $100 before any reimbursement can be made.
- Copay: Some policies will have a set dollar amount that will not be reimbursed per procedure. For example, you might have a $10 copay for an x-ray. If the cost of the x-ray is $60, then the most your plan can reimburse you will be $50.
- Coinsurance: Other policies will have a coinsurance requirement. This is usually a percentage of the cost of a procedure. If your coinsurance is 20 percent, then that $60 x-ray will cost you $12 before your plan can reimburse you. If it is 30 percent, then you will pay $18 before reimbursement. Look carefully at what your coinsurance is with the plan and understand that there might be different tiers, which means that some procedures might have a 10 percent coinsurance rate while others have a 25 percent coinsurance rate. (Those numbers are only examples; the actual rates of reimbursement can differ substantially between companies and between plans.)
- Maximum payout: Your policy might have a maximum amount of money that they will pay each year, per illness or incident, or over the lifetime of your pet. Consider whether a yearly maximum is likely to cover a surgery or something like cancer treatment, particularly if your pet is getting older. A lifetime maximum might not make sense if you have a very young pet, as you don’t know what might happen in the next 10 to 15 years. On the other hand, if you have an older pet who is not likely to live more than a few years, a lifetime maximum might be fine in your situation.
Getting Reimbursed for Expenses
Using your pet insurance is different from using your own health insurance. First, there are no in-network or out-of-network veterinarians; you can always go to see whomever you want for care. Secondly, you won’t need to worry about pre-authorization.
The biggest difference is that you will be paying for your pet’s care at the time that they receive it (unless you and the veterinarian have worked out some other arrangement). Once you pay the bill and receive a receipt, you can submit that to your pet insurance company. They will apply any deductible, copay, or coinsurance, then they’ll send you reimbursement, usually in the form of a check.
Here’s an example to show you how it might work. If your pet needs a surgery that costs $1,000 and you have a $100 deductible and a 20 percent coinsurance rate, you will pay the $1,000 directly to the veterinarian, then you can submit the claim. The pet insurance company will deduct the $100 deductible, leaving $900 that is potentially payable. Since you have a 20 percent coinsurance rate, they will pay 80 percent of the $900, or $720. That is what you will receive back from the insurance company, leaving you with a net out-of-pocket cost of $180.
When considering pet insurance plans, it is important to use a trusted company and to make sure all of your questions are answered. Get a free online quote so you can compare plans and choose the one that makes the most sense for you and your furry family member.