How Does Pet Insurance Work? | Smart Pets
Dogs Insurance

How Does Pet Insurance Work?

   Pets are part of the family and receive the same level of care and well-being as their parents. We all want them to be safe, healthy, and happy. But sometimes we can’t protect them from accidents or disease. The treatment of pets in veterinary clinics is expensive. That’s why more and more people are protecting themselves through a quality pet health insurance plan.

Pet Health Insurance Basics

   Pet health insurance, like other forms of insurance, can be confusing for some people. However, this approach is simple:

– Take your pet to the vet

– Submit a refund request with all the necessary information to the insurer

– Receive reimbursement for veterinary expenses

   Every pet parent has a different financial situation. It is essential to know how pet insurance works and to think about how much you can spend on caring for your pet before you need financial support. In any case, you can choose the level of coverage, the amount of the deductible and the percentage of refund. Each combination describes the total cost of your insurance.

   In general, the lower the deductible, the higher the monthly repayment. However, there are differences between companies and insurance policy details, which can affect claims coverage and reimbursement levels, so it’s essential to do your research. For example, a company that covers a cheap wellness exam but pays only $500 for a $3,000 cancer treatment is not the best option for your pet’s insurance.

Most pet coverage plans have some basic elements in common


   If you’re wondering how the deductible works, the deductible is the amount you’re responsible for before the benefits come into play.

There are two types of deductibles:

– annual

– by incident

   Annual deductible plans are more common and operate in a very similar way to human health care deductibles. In addition, annual deductibles may have a higher monthly premium than options per incident.

What’s the best option?

   There is no clear answer because no one has a crystal ball and cannot predict the future. However, if you plan to visit the vet often for various incidents, an annual deductible would be the best choice. A deductible per incident may be a better option if your pet is healthy and you are not anticipating many incidents requiring veterinary care.

Monthly premiums

   The cost of dog or cat insurance depends on what your policy includes. The monthly cost of insurance depends on the level of coverage, the amount of co-payment, the deductible options, and the age and breed of your dog and place of residence.

   The average monthly amount of all-risk insurance covering both accidents and illness is $47.20 for dogs and $29.54 for cats. The average premium for accident insurance only is $15.84 for dogs and $11.74 for cats.

   The amount of insurance for cats or dogs depends on the species, breed, age of the animal at the time of registration, gender, location and level of coverage.

   In general, the most expensive are male dogs of large breeds, and the lowest premiums are those of plans for female cats.


   The refund is the percentage at which the insurance company covers eligible expenses after you have paid a deductible. In most cases, you can choose pet insurance policies with reimbursement rates ranging from 70 to 90%. Some insurers also offer lower reimbursement levels (60%) which may depend on the breed or age of your pet. A higher refund will cost you more in terms of monthly premium.

   Here’s an example of how you work if you have a policy with a $500 deductible and a 70, 80 or 90% reimbursement rate for a $5,000 claim:

DescriptionAmount at reimbursement 70%Amount at reimbursement 80%Amount at reimbursement 90%
Submitted claim$5.000$5.000$5.000
Deductible– $500– $500– $500
Reimbursement basis$4.500$4.500$4.500
Total paid by insurance$3.150$3.600$4.050
Total your cost$1.850$1.400$950

    Based on the simulation, you can say that in the event of a disaster, the highest level of reimbursement has the lowest effect on your pocket. So which one to choose? This depends on the monthly premium calculated by the insurer for each variant.

   The difference in your payment share between 70% deductible and 90% is $900 ($1,850- $950). When you divide $900 by 12 months, you get $75, and that’s the amount to compare with the monthly payments. In other words, based on the example above, if your monthly premium for a 90% repayment plan is more expensive than a plan with a 70% option under $75, a 90% refund would be an option to choose from. What for? Because your total annual cost will be lower, for example:

70% repayment plan – $64.59 per month ($64.59 x 12 months – annual cost of $775.08)

90% repayment plan – $108.13 per month ($108.13 x 12 months – annual cost of $1,297.56)

   Based on the above and the $900 saved with the 90% option, your total annual cost, including claims coverage of $5,000, will be

70%: annual premium $775.08 – $1,850 – 2,625.08

90%: annual premium $1,297.56 – $950 – 2,247.56

The real savings of purchasing a plan with a 90% more expensive refund is: $2,625.08 – $2,247.56 – $377.52

All of the above values are examples and are only used for cost simulation purposes. However, you can apply this methodology to compare different quotes and imagine possible payment scenarios.

It’s important to remember to choose pet insurance:

Some companies reimburse on the basis of a fixed cost schedule, rather than on the actual vet bill you submit. It is preferable that reimbursements be calculated on the basis of the actual costs of the veterinarian.

Is pet insurance worth it?

   Investing in pet insurance can help save a life and avoid debt. Many homeowners want insurance before their pet gets sick or injured. While it is becoming more common to insure your pets, in many cases this is not yet the most immediate choice.

The main advantages

   While many pet owners rely on their savings for emergencies, unfortunately, animals suffering from trauma or sudden illness can completely wipe out these savings. Diagnoses can lead to costly emergency care, including surgery and follow-up treatment.

According to Consumers Reports:

“A serious illness or injury can have financial consequences, even if the patient is a pet. Cancer treatments can easily cost $5,000; an operation to repair an LCA torn apart by a poorly executed jump from the couch, for example, can cost about $3,300. Pet insurance is sold with the promise that by helping to cover part of your pet’s medical expenses, you will not be forced to consider “economic euthanasia” in the most serious circumstances.”

   This is a personal and emotional decision regarding pet medical insurance and the choice to purchase one. So, is it worth it? If you’ve ever had a large medical bill for a pet, you know the answer: absolutely yes.

   Unexpected medical care for pets is becoming increasingly expensive due to advanced medical technologies for pets and rising costs of general veterinary care. As a result, more and more people are choosing to protect themselves from unexpected veterinary bills through a high-quality pet health insurance plan.

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