Insurance Pet Insurance How Does Pet Insurance Work? Know these important pet insurance terms and your costs By Lorraine Roberte Lorraine Roberte Lorraine Roberte is an insurance writer for The Balance. As a personal finance writer, her expertise includes money management and insurance-related topics. She has written hundreds of reviews of insurance products. learn about our editorial policies Updated on April 27, 2022 Reviewed by Eric Estevez Reviewed by Eric Estevez Eric is a duly licensed Independent Insurance Broker licensed in Life, Health, Property, and Casualty insurance. He has worked more than 13 years in both public and private accounting jobs and more than four years licensed as an insurance producer. His background in tax accounting has served as a solid base supporting his current book of business. learn about our financial review board In This Article View All In This Article What Pet Health Insurance Covers How a Pet Insurance Policy Works Where to Get Pet Insurance Deciding What’s Best for Your Pet Photo: Burak Kilic / Getty Images As pet owners, we want to make sure our companions receive the care they need to have long, happy lives. While veterinary expenses can be hard to predict, pet insurance is an option that can help pay for sudden costs. We’ll review how policies work, how to choose one, and what to consider when deciding what’s best for your pet. What Pet Health Insurance Covers There’s no standard coverage among insurers, and options vary depending on the type of plan you choose. You may see coverage offered for: Unexpected injuries or mishapsTreatment of illnessesTesting and diagnosticsPrescription drugs, foods, and supplementsSurgical and other medical proceduresPreventive care, such as annual exams and medicines for flea, tick, and heartworm preventionBehavioral or alternative therapies You often have the choice between accident-only and accident-and-illness policies. Note Wellness coverage is usually offered as an add-on to an accident-and-illness plan but is sometimes sold by itself. How a Pet Insurance Policy Works Pet health insurance policies share many similarities. In general, here’s what you can expect. The Costs Annual average premiums for dogs were about $828 for an accident-and-illness policy in 2021. It was about $427 for cats for the same type of policy. Wellness or preventive coverage is typically offered at an additional cost with an accident-and-illness policy. Your pricing may vary based on your: LocationPlan selections for deductibles, limits, reimbursements, and other detailsPet’s age, breed, and genderDiscounts applied to the policy Typically, you pay all veterinary costs upfront, then file a claim for covered items to be reimbursed. How Premiums Are Paid Most pet insurers accept debit or credit cards from major card issuers, and some also accept electronic bank payments. Premiums are usually automatically charged to a stored payment method either monthly or annually. Some insurers also charge a one-time administration fee when you enroll. How to File Claims With most insurers, you need to pay your veterinarian at the time of service and ask for an itemized invoice. Then you fill out a claim form and send it to the insurer with the invoice and proof of payment. You can often submit claims by email, postal mail, and fax, or through your online account or the insurer’s mobile app. Some insurers pay the vet directly if the veterinary office is set up to accept payments that way, but you most likely still need to submit a claim form. How You’re Reimbursed Providers vary with how long they take to review and process your claim. Some take as few as five days, others as long as 30. Once processing is complete, your insurer may send a check in the mail or direct deposit the sum into your account. Policy Components You may recognize several terms on your pet’s policy from your own health insurance policy: Deductible: What you must pay before the insurer begins covering any billsReimbursement percentage: How much the insurer pays you back for a covered claim after the deductible is metCo-insurance (Co-pay): The percentage you pay on bills after you meet the deductibleLimit: The maximum the provider pays for claims; can be per-incident, annual, and lifetime limits Here’s an example of how these components might play out in your pet’s policy: Say your cat has a gash on its leg and needs emergency care. After exams, bloodwork, and wound treatments, the bill comes to $1,500. Your policy has an annual $500 deductible and an 80% reimbursement percentage. Since this is your first claim for the policy year, you’re responsible for the first $500 to meet the deductible. Of the remaining $1,000 left, the insurer pays you $800 (80% reimbursement level). You already paid the remaining $200 (20% co-insurance) at the time of the visit. Your total out-of-pocket expense for this claim is $700. Where to Get Pet Insurance There are several companies offering pet health insurance, including: 24 PetWatch Protection ServicesAKC Pet InsuranceASPCA Pet Health InsuranceEmbrace Pet InsuranceFigo Pet InsuranceHealthy Paws Pet InsuranceLemonadeNationwide Pet InsurancePets Best InsuranceTrupanion Nationwide and Lemonade are two of the few major insurers offering their own pet insurance. Many others, such as GEICO and USAA, partner with a pet-focused insurance company to provide plans to policyholders. You may get discounts by signing up for pet insurance through your existing insurance provider. For example, if you enroll in an Embrace plan through USAA, you could get up to 25% off your policy. While researching pet insurance providers, consider what coverage you want for your pet and talk to your vet about any conditions your furry friend is predisposed to. Compare plan coverages and exclusions. Also determine how much you want to spend on premiums, and your comfort level for deductibles and limits. Note Be sure to review a company’s claim approval and reimbursement times and methods, as large vet bills can stress finances. Deciding What’s Best for Your Pet Many owners want to know if pet insurance pays off. Like any type of insurance, the answer depends on your circumstances and how often your pet will need the insurance. Regardless, both insurance and vet costs can be hard to afford. Keeping an eye on your pet's health and safety is always the most important step. Premiums can add up to thousands of dollars over the lifespan of your pet, and you still have to deal with annual deductibles, limits, and exclusions. But it’s major illnesses that would otherwise break the bank that can make pet insurance an excellent buy. For instance, treatments for cancer can cost up to or even more than $7,500. Note Pet parents spend an annual average of $458 and $201 on surgical vet visits for dogs and cats, respectively. As you weigh what’s best for your pet, consider your budget, savings, and other resources available to you. For some, the peace of mind pet insurance brings makes it invaluable. After all, you don’t want to be in a position where you can’t afford to care for your pet. But others may decide that alternatives like credit cards or vet-offered payment plans make costly pet bills affordable enough that insurance isn’t needed. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. North American Pet Insurance Association. "Section #3: Average Premiums." USAA. "Help Protect Your Furriest Friends From Head to Tail." Cornell University College of Veterinary Medicine. "Cancer Management - Frequently Asked Questions." Amercian Pet Products Association. "Pet Industry Market Size & Ownership Statistics."