Is Pet Insurance a Scam?

by Team eLocal
veterinarian checking the heartbeat of a golden retriever puppy with a stethoscope during an appointment

Every pet parent wants the best for their furry family members. They also know just how expensive those vet bills can get.

In trying to tame these costs, you might have come across pet insurance options. But you may also have heard from friends or family members that pet insurance isn’t actually worth the price. Here’s a look at how exactly pet insurance works to help you decide whether it’s right for your furmily.

How Does Pet Insurance Work?

Pet insurance is similar to the health insurance you have for your medical expenses, except it's for your pet. The payments are handled differently than health insurance, though. With pet insurance, you pay the vet bill as usual. Then, you submit the bill to your pet insurance company to receive a reimbursement. Many policies have a deductible you have to meet before you start receiving reimbursements, and you might not get reimbursed for the total amount.

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How Much Does It Typically Cost Per Month?

Pet insurance costs vary significantly from company to company, ranging from $10 to $100 per month. Cats tend to be cheaper than dogs — most people pay between $15 and $30 monthly for cats, while dog owners typically pay $30 to $50 each month. The breed and age of the animal an also impact pricing.

The coverage you choose is also a factor in the price. Accident-only policies are typically the cheapest option, while comprehensive plans that also cover illnesses are more expensive. Comparing companies and looking at different policy types helps you find one that matches your budget.

What Do You Get for the Price?

Your monthly pet insurance premiums entitle you to reimbursement for covered incidents. The things that are covered can vary based on the type of plan you choose. Some plans also have exclusions that might not be covered. Pet insurance plan types typically include:

  • Accident only: This type of plan will reimburse you for things that happen due to an accident, such as broken bones or swallowed objects.
  • Comprehensive: This type of pet insurance covers accidents and illnesses, such as cancer or glaucoma.
  • Routine care add-on: Many standard policies don't cover routine pet care. However, some insurance companies offer an optional add-on, so you can receive reimbursement for routine pet bills.

It's important to understand what type of plan you're choosing and what's covered under the policy. Review the exclusions carefully. Find out if the policy has a deductible, which you'll have to reach before the reimbursements start. You might also be responsible for a percentage of each bill, so ask about that percentage if it applies to your policy.

Does Pet Insurance Cover Preexisting Conditions?

Most pet insurance policies don't cover preexisting conditions. You can still get a policy for a pet with a preexisting health condition, but it won't reimburse you for any vet bills associated with that condition. Some policies will reimburse you for a preexisting curable condition after a designated waiting period.

Is Pet Insurance Worth It? Is It a Scam?

Pet insurance isn't a “scam” — it's a legitimate insurance product. However, it might not be worth your money in all cases. If you have an older pet or one that already has health issues, you won't likely get your money out of it. Since existing conditions are excluded, you would only receive reimbursements for new issues.

If your pet is young and has no diagnosed health issues, it might be worth the price. You get peace of mind that you'll receive reimbursements if your pet has an accident or serious illness, depending on your coverage. It can also be beneficial if you don't have a lot of savings to cover a large, unexpected vet bill. Paying a small amount each month is often more affordable for people without savings than coming up with thousands of dollars with no warning.

How Do the Deductibles and Reimbursements Work?

Your pet insurance policy might have an annual deductible, similar to your health insurance. That means you can't get reimbursement from the policy until you've paid at least that amount in vet bills for covered services.

Your policy might also have a per-incident or per-condition deductible. You pay the deductible one time for that condition but don't have to pay it again if that same incident or condition reoccurs in the future.

The reimbursement rate applies once you meet any applicable deductibles. The plan will cover a percentage of each covered incident after your deductible — usually between 70% and 100% of the total cost. If the vet bill is $1,000, that means you would get reimbursed anywhere from $700 to $1,000, depending on your reimbursement rate. Higher reimbursement rates typically result in higher premiums.

Are There Limits on How Much Pet Insurance Will Pay?

Many pet insurance policies have limits on how much they'll pay. This can be either annual or per-incident. If you have an annual cap, the policy will only reimburse you up to the limit for the year. Any vet bills beyond the limit are your responsibility. The annual limit resets each year. If your policy has a per-incident limit, it will only pay up to that limit for each incident. For example, if your injured pet needs X-rays, lab tests, surgery and follow-up care due to that single injury, you'll be responsible for any vet bills beyond the per-incident limit if you surpass it.

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