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Pet Insurance: What You Need to Know

Illnesses · Injuries · Medications · Therapies

Pet-insurance companies cover a wider range of illnesses and injuries than ever before. However, experts say you should get your pet covered early in its life to make sure that it’s eligible for health coverage at all.

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Most people will do anything for their pets. Consumers will spend $69.4 billion on their pets in 2017, according to American Pet Products Association (APPA). About 24 percent of a consumer’s annual pet costs go toward veterinary care, APPA says.

The average veterinary bill in 2015, which is the most recent year for which data are available, was $786 for dogs and $594 for cats. The cost of veterinary bills rises by about 7 percent annually, experts say, because of increases in veterinarians’ ability to diagnose and treat ailments; the development of equipment, such as CAT scans and MRIs, that makes higher levels of treatment possible; and the increasing availability of advanced care, such as organ transplants, open-heart surgery and prosthetic limbs, and of alternative treatments, such as acupuncture and water rehabilitation. Meanwhile, emergency-clinic bills typically start at $500 and run as high as $20,000 in extreme circumstances.

As a result of rising pet-health-care expenses, more Americans than ever before buy pet medical insurance. North American Pet Health Insurance Association (NAPHIA) says about 1.8 million pets were insured in 2016 in North America, compared with 1.62 million pets in 2015. Just more than 1 percent of all pets in the United States are covered by pet insurance, according to NAPHIA. However, experts tell us that the number of covered pets will continue to rise, in part because employers increasingly provide pet insurance as an optional benefit. Willis Towers Watson, which is a risk-management advisory company, says 36 percent of U.S. companies provided pet insurance as an optional benefit in 2015.

We found 12 companies that sell pet insurance, most of which are stand-alone companies instead of being part of a larger company that sells other types of insurance. Experts tell us that a handful of companies came and went during the past 10 years. In light of this, experts recommend that you select a pet-insurance company that’s been in business for at least 10 years. This increases the odds that the provider will be around throughout your pet’s life. We found that two companies started to sell pet insurance in the past 4 years (Figo and Pet Premium); all of the other companies that we found started in 2009 or earlier.

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Pet-insurance companies typically tout their services for cats and dogs that are age 5 or younger (read: low risk). Experts tell us that pet-insurance companies often don’t advertise their services for older (read: high risk) cats and dogs. However, most companies insure cats and dogs that are as old as age 14.

Older pets are more expensive for you to cover. Plans typically cost $20–$50 per month for a 5-year-old cat or $40–$120 per month for a small 5-year-old dog. That said, prices vary widely depending on your pet’s age. We found plans that cost as much as $560 per month to insure a large 12-year-old dog. Prices also vary depending on your pet’s breed, health history and where you live. (Breeds that are known to be more susceptible to hereditary conditions are more expensive to insure, and companies typically charge insurance rates that are based on the general costs of the veterinary care that’s in the pet owner’s area.)

Twelve experts tell us that pet-insurance policies cover a wider range of conditions than ever before. As a result, experts say, consumers spend increasing amounts of money each year on pet-insurance premiums.

The average annual dog-insurance premium in 2016 was $517.63, compared with $465.02 in 2015, according to NAPHIA. The average annual cat-insurance premium in 2016 was $321.27, compared with $316.30 in 2015, NAPHIA says. Pet-insurance premiums typically are paid monthly.

As a result of the increasing number of pet-insurance options and the complexity in the way that those options are customized and priced, we found that it’s more confusing than ever before to compare pet-insurance options. We also found that the fine print that’s in a pet-insurance policy is full of potential problems for unwitting pet owners.

THE COVERAGE. No pet-insurance company that we found covers a pre-existing condition, which is an illness or injury that occurs before your pet’s insurance plan takes effect. Depending on their breed, some cats and dogs might develop a condition by the time that they’re  age 6. All pet-insurance companies look at your pet’s medical records or request that your pet get a veterinary checkup when you apply for a pet-insurance plan. Furthermore, experts say an illness or injury that occurs during the standard waiting period that’s between the moment that you apply for a plan and the moment that it goes into effect, which can be as little as 14 days, depending on the insurance company, will be considered a pre-existing condition.

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Unfortunately, pet-insurance companies differ widely on what they consider to be a pre-existing condition. Most companies look for pre-existing injuries or chronic diseases, such as heart disease. However, if your pet ate something poisonous, showed symptoms of it and recovered before you applied for pet insurance, it’s possible that a pet-insurance company will consider that poisoning to be a pre-existing condition and won’t cover any future medical issues, such as organ trouble, that could be linked to that poisoning.

“If your pet’s showing clinical signs, it’s up to the insurance company as to how they want to interpret it,” veterinarian Dr. Frances Wilkerson says. “They have the final say, not the veterinarian.”

If your pet has no pre-existing condition, we believe that it’s a good idea for you to buy pet insurance, so your pet will be covered for any illness or injury that it might have later in its life. Pets that are younger than age 6 have more of a risk to experience an acute illness, such as eating your medications and suffering kidney problems, or a trauma-related issue, such as getting hit by an automobile. As pets age, they become less likely to incur an injury that results from trauma or curiosity and are more likely to experience an age-related illness or other health problem. For example, a 10-year-old cat is more likely to develop kidney problems than is a kitten, and a 14-year-old dog almost always will have arthritis to some degree.

AT WHAT COST? Pet-insurance prices vary widely depending on your pet’s age. We found plans that cost as much as $560 per month to insure a large 12-year-old dog. Prices also vary depending on your pet’s breed, health history and where you live. Breeds that are known to be more susceptible to hereditary conditions are more expensive to insure.

AT WHAT COST? Pet-insurance prices vary widely depending on your pet’s age. We found plans that cost as much as $560 per month to insure a large 12-year-old dog. Prices also vary depending on your pet’s breed, health history and where you live. Breeds that are known to be more susceptible to hereditary conditions are more expensive to insure.

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Although pre-existing conditions aren’t covered, most pet-insurance plans now cover some congenital conditions, which are conditions that a pet has at birth, and some hereditary conditions, which are conditions that are passed on through genes.

We believe that congenital coverage is good to have, because, in many cases, a pet already shows signs of a congenital condition when it’s born. For example, if a puppy were to have a heart murmur, an insurance company that doesn’t provide congenital coverage likely would deem the murmur to be a pre-existing condition, and the pet wouldn’t be covered for complications from it that might arise later in life. However, many congenital conditions don’t show up until later in a pet’s life.

Pet-insurance companies differ widely on the hereditary conditions that they cover. Most pet-insurance companies provide a list of the hereditary conditions that they cover on their website or will send you a list if you ask for it. If you have a breed of cat or dog that’s prone to have certain hereditary conditions, or if you know that a cat’s or dog’s parents had a certain condition, you should make sure that the condition is covered before you sign up for a policy.

Some conditions, such as patellar luxation, which is kneecap dislocation that’s common in some small-dog breeds and also can result from an injury, have no agreed-upon cause. Experts tell us that pet-insurance companies might consider a patellar luxation to be a hereditary condition, even if your veterinarian believes that it was caused by an injury. In other words, if you have a small dog, such as a Chihuahua or a Pomeranian, then you should ask a prospective pet-insurance company how it treats hereditary conditions that your dog might develop. If your pet isn’t covered for that condition, you’ll have to pick up any related veterinary bills.

Besides coverage for congenital and hereditary conditions, almost all pet-insurance companies now have plans that cover cancer and chronic diseases, such as heart or kidney diseases. That’s good news, because cancer and chronic diseases are common among all cats and dogs, starting in middle age. (The cost of a cancer diagnosis, therapy and treatment starts at $4,000.)  We also recommend that you make sure that your plan covers continual coverage for chronic diseases. We found that most plans do. You should ask a prospective pet-insurance provider whether it limits the amount of money that it’ll reimburse you for your pet’s treatment. If you don’t, you might discover that a chronic disease might be covered only during the year that it was diagnosed, and you’ll be on the hook for the full cost of your pet’s treatments for that disease for the rest of its life.

MORE OPTIONS. Although pre-existing conditions aren’t covered, most pet-insurance plans now cover some congenital conditions, which are conditions that a pet has at birth, and some hereditary conditions, which are conditions that are passed on through genes.

MORE OPTIONS. Although pre-existing conditions aren’t covered, most pet-insurance plans now cover some congenital conditions, which are conditions that a pet has at birth, and some hereditary conditions, which are conditions that are passed on through genes.

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Experts say continual coverage also is good to have in your pet-insurance plan in case the pet is injured in an accident. For example, if you have continual coverage for your dog, and it has to have surgery to repair a broken bone, you’ll be reimbursed for the cost of its post-surgery rehabilitation as well as medication to treat arthritis that the dog might develop later in life and even acupuncture and chiropractic care to keep the dog comfortable. Otherwise, you could face at least $8,000 out of pocket to cover those expenses. Acupuncture, chiropractic care and other types of alternative therapy for senior pets weren’t covered 5 years ago, but experts say most standard plans now cover these types of treatments.

One more note about new types of coverage: Almost all pet-insurance companies now provide so-called wellness coverage for an additional cost, which starts at $13 per month, on top of your monthly premium. Wellness plans differ by company, but they typically cover annual examinations, suggested preventative medications, such as flea, heartworm and tick control, and suggested vaccines.

What’s good news is that experts tell us that most pet-insurance companies now defer to your veterinarian’s recommendations in this regard. In other words, if you have a dog that spends a lot of time in the woods, your veterinarian might recommend that your dog receives vaccines that might not be necessary for a dog that typically stays inside. Five years ago, wellness plans covered only standard procedures and medication programs.

PAYMENT PROCESS. When you have health insurance, your medical provider bills your insurance company. However, when you have pet insurance, you typically pay the veterinarian, file a claim with your pet-insurance company and get reimbursed after the pet-insurance company approves your claim. Seven veterinarians tell us that the process typically takes less than a month.

Trupanion is the only pet-insurance company that provides direct payment, which means that the company will work directly with your pet’s veterinarian to pay a bill for treatment.

Trupanion started its direct-pay program in 2013. We haven’t heard of any other pet-insurance company that plans to introduce direct pay, but we believe that Trupanion’s direct-pay system takes the bite out of an unexpected veterinary bill.

Debra M. Eldredge is a retired veterinarian who has written about pets since 1994.

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