June 23, 2024

We scored top pet insurance companies based on our detailed rating methodology and extensive research, and Lemonade, Spot, ASPCA and Healthy Paws are our top picks.

Reimbursement System

While your health insurance provider pays your doctor directly for treatments covered under your policy, pet insurance works on a reimbursement system. That means you pay your veterinarian for the full cost of care then file a pet insurance claim for retroactive payment.

Claim approval isn’t guaranteed. If the claim is approved, your provider still may not cover 100% of the costs. Your policy’s reimbursement rate is the percentage of covered claims (after your deductible) the provider will pay. The remainder is your copay, which you are responsible for. Typical reimbursement rates are between 70% and 90% of the bill minus your deductible.

For example, suppose you have a $250 deductible and an 80% reimbursement rate, and you file a $1,000 claim. If approved, you would be responsible for your $250 deductible and 20% of the remaining $750 (which is $150), totaling $400. Your provider would reimburse you $600 (or 80% of $750).

Below, we break down other important aspects of how pet insurance works.

  • Deductible: Like personal health insurance, pet insurance doesn’t start paying until you’ve met your deductible or the amount you owe out of pocket first. Pet owners are typically only responsible for paying their deductible once per year.
  • Annual limit: Each pet insurance policy comes with an annual coverage limit, which is the maximum amount the provider agrees to pay over a year for your pet’s veterinary expenses.
  • Waiting periods: Pet insurance coverage doesn’t start immediately after enrollment. Instead, providers impose a waiting period before coverage begins. A waiting period is the period of time your insurer requires you to wait until your pet is eligible for reimbursement on specific conditions.
  • Exclusions: No pet insurer will cover pre-existing conditions, which are any health issues noted by a licensed veterinarian before the start of your policy or during its waiting period. Pet insurance policies often include a list of additional exclusions, such as routine care, grooming and breeding costs, and non-veterinary related costs like food or supplements.
  • Choice of veterinarian: Pet insurance providers don’t have networks of preferred caregivers. You can usually visit any licensed vet, providing more freedom in finding the right medical care for your animal.

Factors That Impact the Cost of Pet Insurance

Your premium price depends on various factors determining your pet’s unique risk level. In addition to the species and breed, your pet’s age and location affect your insurance premiums.

Here are the major factors that determine your pet insurance policy’s cost:

  • Species: Cats are generally more affordable to insure than dogs due to their relatively predictable health. 
  • Breed: Your pet’s breed also influences the cost of your pet insurance. For example, golden retrievers are more expensive to insure than mixed-breed dogs due to their susceptibility to certain conditions, such as hip dysplasia and skin conditions. “Being familiar with your pet’s genetic disease predispositions and aware of the risks and costs of treatment are good points to consider when choosing an insurance policy,” says Pangolia’s senior in-house veterinarian, Dr. Paola Cuevas.
  • Age: Older pets are more likely to get sick or injured, so they’re more expensive to insure than younger animals. Insuring your pet as early as possible is the best way to save on high premiums and ensure you get the most out of your pet’s coverage.
  • Location: Pet insurance companies will consider how much your local veterinarians charge for services to determine how much you’ll need to pay monthly for a policy. Your state may also place regulations on how much providers can charge for coverage.

Common Pet Insurance Claims

Data compiled by Healthy Paws shows that the most common conditions among dogs and cats are gastrointestinal (stomach) issues caused by inflammation, toxic ingestion or another severe illness. Without pet insurance, treatment for these conditions could cost up to $29,000 or more. Compare that to a pet insurance policy for $120 to $1,200 annually, and you can see why pet insurance could be a worthwhile investment.

Here are the most common reasons for vet visits and the potential costs, according to Healthy Paws:

Although it’s clear that even common vet visits can be expensive, it’s important to be able to take your fur baby to the vet without insecurity about the cost of care.

“Animals do not speak. They are also very good at masking disease, and by the time most owners start to realize that something is going on with their pets, they are usually very sick,” says Dr. Cuevas. “There is no better way of caring for our beloved family members than having the peace of mind that their medical needs will be covered.”