Pet insurance could provide some relief. In fact, pet insurance is becoming increasingly popular: The North American Pet Health Insurance Association says that 4.41 million pets were insured at the end of 2021 and that number is expected to increase for 2022.?

If you’re considering buying pet insurance, this guide is for you, with pointers on:?

• How pet insurance works

• Factors that determine costs

• Where and how to find a reputable provider

• Things to think about before you sign a policy

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Pet insurance is similar to health insurance for humans. You pay premiums to an insurance company, and they agree to cover a predetermined set of services. Some veterinary clinics accept payment directly from pet insurance companies, while others will ask you to pay upfront and then file a claim for reimbursement.

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Your coverage will depend on your policy type (more on those in a bit). For the most part, pet insurance covers treatments for unexpected illnesses. That includes chronic conditions your pet may develop while enrolled in the policy.?

Most policies will not cover care for pre-existing conditions, including conditions that are suspected but not yet confirmed. Some insurance companies also won’t cover hereditary or congenital conditions, like hip dysplasia for German Shepherds and Maine Coons.

Similarly, preventative care like wellness exams, vaccinations, and spay/neuter surgeries are not covered, but insurers often offer a separate policy for those services.?

Non-medically necessary expenses (groomer visits, training, boarding) are usually not covered.

When selecting a pet insurance policy, you’ll usually be choosing between these options:

• Accident-only. This policy will only cover treatments needed after an accident. It’s the claim you hope you’ll never need to file, but if your pet got hit by a car, you should be covered for things like X-rays, bone setting, wound treatment, and antibiotics. Other expenses usually covered include treatment for accidental poisoning, bite wounds and lacerations, burns, and snake bites.
  

• Accident and illness. As the name implies, in addition to treatment for accidents, A&I insurance will also cover treatment for illnesses. Surgeries, diagnostic tests, prescription medications, and procedures needed to treat sudden illness are covered. Most of these plans do not cover treatment for pre-existing conditions or preventative care (vaccinations, spay/neuter surgeries, flea/tick treatments).

• Wellness plans. These plans cover costs traditionally left out of other pet insurance plans: vaccinations, wellness exams, dental treatments, and other preventative care. They are often offered as an add-on—or a rider, in insurance-speak—to accident-only or accident and illness policies, though some insurance companies sell it as a separate plan.

• Other add-on plans (riders). Add-ons can be purchased in addition to your primary policy. For example, some A&I policies don’t cover cancer treatments, but the insurance company may offer to cover them as an “add-on/rider” to your main policy for an additional cost.?

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Policies range by your geographic location and setting, but in general, according to data from the North American Pet Health Insurance Association (NAPHIA), the average monthly premiums for 2021 were:??

• $19.93, accident-only plans for dogs

• $48.66, accident and illness for dogs

• $10.85, accident-only plans for cats

• $28.57, accident and illness for cats

Whether your policy is higher or lower than that will depend on several variables, including the following.

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Dogs tend to have higher vet bills because they go to the vet more often than other pets, so they are more expensive to insure.

Pet insurance for purebred animals can also be more expensive. Many purebred dogs and cats are predisposed to hereditary conditions and are likely to have more vet expenses.

Older pets, who are more likely to be in poor health, will also have higher premiums.

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Your premiums will vary by location, based on the estimated cost of vet care in your area. If you’re in a large metro area, you’ll likely pay more for pet insurance.

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As noted, your costs will also depend on the type of policy you want. Here are some variables to consider.

• Accident-only vs. accident and illness: A&I policies have higher premiums because the insurance company must cover more expenses.?

• Lifetime vs. annual coverage: Lifetime coverage covers your pet year after year, for the rest of their life. Annual coverage ends at the end of your plan year and has to be renewed in order to continue. Policies with lifetime coverage are usually more expensive, since the insurance company is promising to cover your pet’s health expenses as they age, which can frequently go up.
  

• Add-ons/riders: If you want to add coverage for wellness visits, vaccines, or treatment for a certain condition, your costs will be higher.

• Deductible: A deductible is an amount you must pay out-of-pocket before the insurance company starts covering your costs. For instance, if you have a $2,000 deductible, your insurance won’t start reimbursing you until you pay $2,000 worth of vet bills out of pocket.?Plans with higher deductibles have lower premiums, or the set amount you’ll have to pay annually. But you may have to pay out of pocket for a while before you meet your deductible. Plans with lower deductibles have higher premiums (your set annual cost), but you won’t have to keep paying for vet bills out of pocket for too long.?

• Reimbursement rate: A reimbursement rate is the percentage of covered veterinary expenses that your pet insurance company will cover. Most policies offer 80%-90% reimbursement rates. For example, if your veterinary bill is $1,000 and you have an 80% reimbursement rate, the insurance company will pay for $800 of that bill. Typically, the higher the reimbursement rate, the higher the premium.
  

• Discounts: Some insurance companies will offer discounts for multi-pet policies, group policies, or bundled policies. They may also extend a lower rate for certain individuals like veterans or seniors. If you get a discounted premium, your costs may be lower.

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If you’ve had your pet for a while, review their medical history and estimate how often your pet might visit the vet each year. Make note of any existing health conditions you want covered. If you are new to pet ownership, talk with fellow pet owners about their experience with costs for illness, accidents, and chronic health conditions.?

Then, take a look at your budget and see, should your pet incur such vet costs, how much you could realistically afford to pay out of pocket each year. With that in mind, you’ll have a sense of what type of pet insurance policy you might want. Next, research multiple providers and get a few quotes.

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You have a couple of options when it comes to choosing a pet insurance provider:

• Check your employee benefits guide. About 47% of employers now offer pet insurance, according to one recent survey. You may get a discounted rate with a group policy, so take advantage of any pet insurance benefit programs available to you.?

• Get an individual policy from a company that specializes in pet insurance, such as Pumpkin and Trupanion in the US, or Vetsure Pet Insurance in the UK.
  

• Check your current insurance policies. Many home, auto, and life insurance companies, such as Lemonade and Nationwide offer pet insurance. You may be able to add pet insurance coverage through one of your current providers and get a discount for a bundled policy.?

Spend time on company websites and figure out what types of policies they offer. Read reviews from fellow pet parents to help you narrow down your options. Look out for any issues with:

• Customer support. Are customers getting their questions answered? Is it easy to get in touch?

• Ease of use. Is it easy to file a claim? Is there an app? How long does it take to submit all the paperwork?

• Reimbursement process. Are customers getting their reimbursement in a timely manner?

• Cancellations. Are customers having issues with canceling their policy??

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An insurance policy is not exactly light reading. But it is a legally binding document, and your pet’s health may depend on it. So, break out the highlighter and go through it line by line before signing. In addition, some insurance companies post sample plans you can review before requesting a quote.?

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Here are sections to watch out for:

• List of covered services. Make sure the services you want to include are covered.

• Exclusions. Give this section (what’s not included) an extra once-over, so you’re not surprised down the road.

• Benefit limits. Some policies will limit how much they will pay annually.?

• Payment terms. Understand how much you’re paying for your premium and deductible and when coverage kicks in.?

• Waiting periods. Some policies will cover a condition after a waiting period. A common example is hip dysplasia in German Shepherds.?

• Steps to file a claim. Don’t wait until an emergency arises to figure out how you can access your benefits.?

• Renewals, cancellations, disputes. If you ever have a dispute with your insurance company, it’s good to know your options are ahead of time.

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Not sure what something in your policy means? Check out this list of common insurance terms.

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Ideally, you should get pet insurance as soon as possible because the cost of insuring a pet goes up as they get older.?

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It could be. You’ll want to do some research and check reviews from other pet owners with older pets. Take a look at your current vet expenses and compare them with premium estimates to figure out what makes sense.

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You’ll need to do some math and ask yourself if you can cover an unexpected vet bill. If something really serious comes up, like a $2,000 emergency surgery, will the payout from a policy even out how much you paid in premiums??

Some nonprofits, such as RedRover Relief and The Pet Fund, may help with vet bills, depending on your income. A lot of vet clinics also offer payment plans and will discuss your options with you. You might also look for a low-cost community vet clinic in your area.

At the end of the day, having pet insurance should give you peace of mind, not lead to more stress. Make sure you choose a policy that works for you and leave a review on Trustpilot about your experience.

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