Pet Insurance – How it Works, Exclusions & Cost

What Is Pet Insurance?

Pet insurance is a health plan the owner pays into on a monthly or annual basis in exchange for reimbursement of eligible veterinary expenses. When a pet is seen by a veterinarian for a covered condition, the owner pays the vet in full and then submits a claim to their insurance company for reimbursement, which is dictated by the terms of the policy.

Although most pet insurance plans are for dogs and cats, a few pet insurers offer coverage for other animals, like birds, reptiles, horses, and rabbits.

There are typically three types of pet insurance plans to choose from.

  • An accident-only plan will reimburse for eligible veterinarian bills related to accidents such as broken bones or swallowing foreign objects. 
  • An accident and illness plan includes both types of veterinary care, giving the owner more broad protection but at a higher cost. Illnesses may include infections, cancer, arthritis, diabetes, and allergies. 
  • Routine wellness or preventative care plans, offered by some carriers as an optional add-on or separate plan, provide reimbursement for things like immunizations, flea treatments, and spay/neuter. 

Deductibles, coverage limits, premiums, and the like can vary by insurer. Learn more about various pet insurance plans and companies in our Best Pet Insurance Companies of 2022 ratings.

What Does Pet Insurance Cover?

What pet insurance covers depends on the plan you choose:

  • Accident only: Covers veterinarian costs for accidents, such as swallowing objects, getting bitten by another animal, broken bones, and lacerations.
  • Comprehensive plan: Covers accidents and illnesses, potentially including allergies, cancer, hereditary conditions, surgery, hospitalization, breed-specific conditions, and arthritis.
  • Routine care: Covers preventative costs, like dental cleaning, vaccines, annual checkup exam fees, blood work, and spaying or neutering, and is also called a pet wellness plan.

No matter which pet insurance plan you choose, pre-existing conditions are typically excluded from coverage. However, some companies have a waiting period for some pre-existing conditions and will provide coverage if your pet is symptom-free for a set amount of time, such as six or 12 months. Other companies will not provide any coverage.

Pet insurance plans typically have a waiting period for accidents and illnesses. The waiting period is the time between the policy being activated and the coverage taking effect. For example, if a policy has a 14-day waiting period for illnesses and your policy takes effect on the first of the month, illness visits aren’t eligible for reimbursement until the 15th.

What Does Pet Insurance Not Cover?

The main veterinarian costs not covered by pet insurance are pre-existing conditions, non-vet related costs, and regular care, unless you have purchased a routine or wellness plan. Specific examples include:

  • Breeding
  • Pregnancy
  • Cosmetic procedures such as ear cropping, removing dew claws, and tail docking
  • DNA testing
  • Accidents or illnesses caused by fighting, racing, cruelty, or neglect 
  • Elective procedures
  • Preventative procedures
  • Experimental treatments

Everyday costs of owning a pet are also not covered, like pet food, toys, vitamins, grooming, and boarding fees. However, some carriers, like Embrace, will cover prescription food if you have a wellness plan. There are also some carriers, like Fetch, who may cover boarding fees if the policyholder has to be in the hospital for an extended period of time, typically four or more days.

How Much Does Pet Insurance Cost?

In 2021, the average premiums for accident and illness policies for dogs and cats were approximately $49 per month and $29 per month, respectively, as reported by the North American Pet Health Insurance Association (NAPHIA). However, you may find a pet insurance plan that fits your needs for much less.

According to our Best Pet Insurance Companies of 2022 rating, Lemonade offers the cheapest insurance for dogs with a sample monthly cost of $19.44 and for cats with a monthly cost of $11.00. The most expensive companies, on the other hand, are Nationwide for dogs at $56.74 per month and Trupanion for cats at $30.88 per month.

There are several factors that impact how much pet insurance costs, including:

  • Your ZIP code
  • The type of pet you have
  • Your pet’s age
  • Your pet’s breed
  • Your pet’s size
  • The pet insurance deductible
  • The reimbursement percentage
  • The type of coverage plan you select
  • The annual limit
  • The optional add-ons you may select
  • The company you choose

Do You Need Pet Insurance?

Whether you need pet insurance is up to you. When considering the cost of vet care versus average pet insurance premiums, pet insurance may be worth it for your pet, family, and financial situation.

For example, you could pay $3,000 or more if your pet is hospitalized. If you are paying $30 a month, or $360 per year, for pet insurance, then you may be coming out ahead. In this scenario, you would have to pay your pet insurance premium for just over eight years to make a $3,000 hospitalization claim not worth it.

Additionally, having a breed that is more susceptible to certain health conditions, such as hip dysplasia, can result in more vet or specialist visits and, thus, more expenses that may be reimbursed by a pet insurance plan.