How to Choose the Right Pet Insurance

• Written by: Lisa Jo Rudy, M.Div.

We all know how important pets are for your emotional wellbeing. If your dog is injured or ill, it’s not just inconvenient — it can disrupt your life to the tune of more than $10,000. And, according to the Bureau of Labor Statistics, the cost of owning a pet has increased by an incredible 60% over the past ten years. Emergency pet visits can run from $80 for basic blood work to $5,000 for emergency surgery — not to mention the cost of hospitalization, which can run into the thousands.

With the possibility of such huge costs just an accident away, many pet owners are choosing to buy pet insurance to allay the possibility of a large, unexpected debt. We’ll go over the following 4 steps to choose the right pet insurance:

1. Research and select a reputable insurance provider.
2. Understand and choose your preferred combination of premiums, deductibles, and co-pays.
3. Determine your budget and coverage needs.
4. Review policy details and check for waiting periods, coverage caps, and exclusions.

Step 1: Choose the Insurer You Prefer

There are quite a few pet insurance providers, ranging from small pet-only insurance companies with names like Pumpkin and Lemonade to large, well-known insurance providers such as MetLife. While smaller, pet-focused companies may offer better customer service and a broader range of products, larger insurance companies often have decades of experience and a well-established reputation for reliability.

Every reputable pet insurance provider offers a customizable range of options at many different price points — and costs are based on:

• Type of animal
• Age of animal
• Coverage desired
• Location
• Deductible
• Premium 

It’s a good idea to compare reviews and options. Be sure the provider you select is well-established and has a solid reputation for customer service.

Step 2: Decide Which Parts of an Insurance Policy Are Most Important to You

When you choose a particular pet insurer and coverage plan, you’ll be choosing:

• The premium you pay, either monthly or annually, to keep the insurance plan active. The higher the premium, the more comprehensive the insurance policy will be.
• The deductibles, or out-of-pocket costs, that you’ll be responsible for. The higher the deductible, the lower the premium.
• The co-pay represents the percentage of covered costs you’re responsible for paying. Few insurance companies cover 100% of costs, but most pay 70-90% of costs.
• The product or insurance policy that meets your needs.

For example, imagine your dog receiving a total hip replacement. If the overall cost is $6,000 (an average, according to Iowa State University), how much will pet insurance cover?  It depends. If your deductible is $300, and your copay is 20%, you will pay $1,440, and your insurance will cover $4,560.  With a lower deductible or copay, you’ll pay less for the procedure — but more per month in premiums.

It is possible to purchase pet insurance that covers not only emergencies but also standard vet care, complementary health care, grooming, and more. Compare the higher premium costs to the costs of these additional services to determine whether you’ll really be saving money with the higher-cost option. 

Step 3: Set a Budget

Consider these important questions: 

• Can I afford standard vet care out of pocket?
• How much am I comfortable paying per month for insurance?  
• How much could I pay out of pocket if I had a pet emergency? 

If you can afford to pay more out of pocket, you may choose to accept a higher deductible and co-pay to save money on premiums. Whether you’re using an individual insurance company site or an insurance comparison site, you should be able to try different combinations of services, premiums, deductibles, and co-pays to see what your options really look like. Try different options until you find one that fits your needs and budget.

Step 4: Check on Exclusions, Caps, and Waiting Periods 

Some insurance companies and policies have fine print that limits benefits. For example:

• Certain pre-existing or hereditary disorders may be excluded.  
• Most policies also have caps, or limits, on the amount they will pay out per year or over the life of the policy. That means you might run out of insurance if your dog has multiple health issues. 
• Most policies have waiting periods (weeks or even months) between the time that you buy your policy and the time it becomes active.

Tips for Pet Insurance Buyers

How can you be sure you’re making the right choice when it comes to pet insurance?  Here are some tips for maximizing your investment.

• Don’t wait until your pet is sick to buy insurance. You may not be able to find insurance for a sick or injured pet, or the price may be unaffordable.
• Avoid overbuying. It’s easy to say “yes” to insurance for extras such as grooming and dental care — but there’s always the chance you won’t need those extras. Carefully compare the out-of-pocket costs for such services to the extra monthly premiums you’ll have to pay.
• Remember that pet insurance, unlike human health insurance, can be used at any accredited vet or veterinary hospital. That means you can — and should — visit a vet when needed, like if you’re away on vacation.
• Keep a close eye on caps and exclusions. While your pet insurance may cover an expensive procedure, coverage may end at a particular dollar figure. 

A Final Word

Pet insurance is usually worth the money, so long as the policy you choose fits your budget and your needs. Before making a purchase, double-check the small print — and once you’ve made your purchase, be sure you stay up to date with payments so that when an emergency strikes, you’re ready!