Different Types of Pet Insurance

As you are browsing for the best pet insurance, you can feel overwhelmed if you don’t know what to look for. There are different types of pet insurance plans offered around. While looking, keep in mind that your pet’s species, breed, and age are major factors for these plans or policies.

Two Major Types of Pet Insurance

In the United States, there are only two major coverage sold by pet insurance companies. These are accident-only and accident & illness plans. Though wellness plans are considered the third, this is only added on top of these two.

Accident-only Plans

As the name goes, accident-only plans or policies cover injuries from accidents. Any type of illness or disease is not covered. It also does not cover routine care and medication not related to any accidental injury.But keep in mind that the most expensive medical bills belong to injuries caused by accidents. Major surgeries and other expensive procedures are usually conducted due to accidents too.Accident-only policies are also amongst the cheapest. So if you are on a budget but know that your furry buddy needs insurance, consider looking into these plans. Accident-only monthly premiums start for as low as $6 for cats and $9 for dogs.Each company offers different coverages, so check that first and compare the costs.

Accident and Illness Plans

These plans are sometimes called comprehensive policies. These plans cover both accidents and illnesses, making them more expensive. Since no one can predict the medical care your pet may need in the future, thisplan is suggested.Out of all pet insurance in the United States, 98% are currently insured under accidents and illness. These plans include diagnosis, treatment, and procedures.Each of these plans is very descriptive of what they specifically cover. Some may cover medications and include the vet’s fees, while others won’t. The general procedures like surgery and a series of treatments are often covered in pet insurance plans.So depending on what kind of premium you avail, prescription meds, equipment, surgical procedures, and therapy may be included in it. Of course, all policies have exclusions, which will be discussed when you read further.

Optional Coverage on Top of a Major Plan

Different companies name their insurances uniquely. Often,a combination of plans compose a complete coverage. These are usually an accident and illness plan with an added wellness or preventive care plan. This defines the types of pet insurance you may be looking for.

Wellness and Preventive Care Plans

Wellness plans pertain to routine care. These are excluded in most premiums but offered as an add-on or rider.These plans include vaccination, flea and tick preventives, deworming, and blood tests. Others include tests like heartworm tests, urinalysis, and imagings. Some plans may include dental care as well.

Disease-Specific Add-ons

Other add-ons besides wellness are highly specific plans for selected diseases. These include add-ons for diabetes, cancer, inherited illnesses, and congenital conditions.Some would also offer behavioral therapy and prescription coverage as add-ons. It isn’t a wonder that some may offer ambulance care, lost pet recovery, boarding, and accidental death.Even euthanasia and cremation are offered by a few, but these are not the real reasons you’re getting insurance for.If you have the budget to include these, then you are free to do so. Depending on what accident and illness plan you get together with add-ons, it could range between $15 to $300 per month.

Tiers or Levels of Pet Insurance Policies

Each company may offer you different tiers or levels of pet insurance. Some call these Basic, Premium, and Elite, while others use terms like Bronze, Silver, Gold, and Platinum. No matter what terms are used to refer to the insurance tiers, these all depend on the coverages mentioned earlier. Each level or tier includes more add-ons or customized plans. Some tiers differ according to the years of each policy. They offer 1-year, 3-year, and 6-year policies with the same benefits. The longer you choose to stay with them, the lower the premiums get. Although rare, there are a few companies that offer plans with lifetime coverage. Most often, it comes with the condition that you insure your pet before the adult age. This means that you must start having them insured as young as possible or before they are considered adults. Again, the plans that will be available for your pet depends on your fur baby’s breed. The tiers or levels may also affect your benefit claim limits and deductibles. Depending on what kind of fur baby you want to insure, the types of pet insurance vary by coverage and costs.

Different Payout Limits of Pet Insurance

Pet insurance companies offer different plans or levels with varying limits, too. The costs of annual limits, deductibles, and reimbursement rates vary.

Payout Limits

Most companies offer annual limits of either $5,000, $10,000, or unlimited. There are a few that offer only up to $2,500 annual limit. As always, this all depends on what species your pet is. Pet insurance companies that offer no maximum payouts usually have higher annual deductibles. These limits are usually per pet not per group policy. Some companies limit the number of claims per pet. Others limit the payout per claim up to $500 or $1000 only and these are usually the cheaper plans. Others offer up to a maximum of $200,000 per pet per year.

Deductibles or Copay

A deductible is an amount you agree to pay for your pet’s bill before the insurance pays out. This avoids unnecessary claims that pet owners should afford.Co-payment or copay is the percentage that the pet owner agrees to pay after the deductible. So in any medical bill, this is the pet owner’s share in the overall cost.Deductibles or copay differs per plan, too. Most companies offer a choice of $100, $250, $500, or $1,000 annual deductibles. Some companies have deductibles and copays that change as your pet gets older.Be aware of those that offer per-incident deductible because annual deductibles offer more value than those. Some companies let you choose between annual or per-incident deductible. Choose among the types of pet insurance that offer the best financial aid for you.The highest copay offered amongst the pet insurance is 0%. Meaning, the insurance company offers to reimburse 100% of your claims. Though most companies offer 10% to 35% copay, your copay’s percentage often depends on the tier of premium you choose.

Waiting Periods

There is an insurance company that claims to have a 0-day waiting period. But in reality, the shortest waiting period claimed was 2 days. Most pet insurance companies offers a standard 14-day waiting period for claims.Usually, illness and injury claims have different waiting periods. Most of the 2-day waiting periods are applicable for accident claims. For the longest treatments, the waiting period may take about a year. 

Those that take a long time are usually those that are under the add-ons. Orthopedics or cruciate ligament claims may take about 3 to 6 months. A few of those that offer wellness plans have a waiting period of 24 hours.Pet owners must file their claims within 30 to 180 days from the day the medical bill was issued. It is better to file your claims before procrastination takes over. Though you have pet insurance, your insurer can reject your claim once you miss your deadline.

Policy Exclusions in Pet Insurance

As mentioned above, there are exclusions in all pet insurance. Even those that offer lifetime coverage have specific conditions. You may have many types of pet insurance but you must understand what is not covered under each.

Pre-existing Conditions

The top on the list of exclusions is pre-existing conditions. This means that if your pet has an underlying condition before your policy starts, it will not be covered. If there are waiting periods to claim your benefits, pet insurance also has a waiting period before your pet’s coverage begins.From the date you signed your pet insurance contract, it’s validity for coverage starts in a few days or months after. The waiting period depends on your pet’s breed and age. If a vet exam suspects a medical condition, an observation may be required. This could add extra days to your waiting period.Almost automatically, congenital and hereditary conditions are all excluded. Each company has specific lists of all these conditions according to your pet’s breed.

Wellness and Preventive Care

Wellness and preventive care are never part of your basic plan or policy. This explains why these are offered as add-ons to whichever plan you choose. Many don’t add this because routine care costs almost the same as the price of a wellness plan.

Training, Therapy, and Supplements

Though this may belong under preventive or wellness, these are all separate clauses in your contract. Some add-ons may also be available should you need these services for your pet. Even medical food supplements prescribed by your vet are not covered. Grooming, over-the-counter supplies, and transportation fees are not covered in any pet insurance. But it is important to read your policy exclusions carefully. If you have the chance to review it with your vet, then do so. Your vet could help you go through the types of pet insurance you’ve pre-selected.

Claiming or Filing for Benefits

Based on your deductibles and copay in the policy you have taken, filing of reimbursement may be quick or long. Most plans have a fixed reimbursement model per procedure, treatment, or incident.Most pet insurance companies reimburse the pet owner directly in the form of a check or direct bank transfer. Only one pet insurance in the United States offers to pay the vet directly. Since most reimbursement takes about 14 days, it is important to still have emergency funds for your pet’s medical bill. While pet insurance helps reduce your expenses, it’s still better to have extra cash on hand.Now depending on your plan, most insurance companies offer between 65% to 90% reimbursement. As mentioned earlier, there are also a few that offer 100% reimbursement, but these come in higher premiums.

How Reimbursement Is Computed

Also, check how your chosen pet insurance company computes for reimbursements. There are two common formulas out there. These two formulas are computed based on which between your deductible and copay comes first. The first formula is deductible first before copay. For example, if you have a total bill of $1100, the first to subtract is your annual deductible. If you have an annual deductible of $100, then that’s $1100 less $100. With your remaining $1000 the next is to subtract your copay. If you have a copay of 15%, then that’s $1,000 less 15%, which is equal to $850. The second formula is copay first then deductible. For the same example, that’s $1100 less 15% first which is equal to $935. Next is to subtract the deductible of $100 which would result in $835. As shown, the first formula would reimburse you $850 while the second would reimburse you with $835. This example may only project a $15 difference but in reality, you would have a bill of $10,000.

Benefit Schedule of Claims

The third and less common way for reimbursement is based on the benefit schedule. This depends on your location and is usually based on a list of diagnoses. If your pet requires a series of treatments, an insurer may compute a reimbursement percentage per treatment.The first treatment may get a higher reimbursement rate than the next one. However, it would lessen as you complete more treatments under one diagnosis. If you exceed the limit, then all other bills won’t be covered.Study your insurance company’s reimbursement plan to maximize your claim. If your purpose of insurance is to cut your expenses then this will matter for any high medical bill.Learning about the types of pet insurances and what each can offer will help you in your financial plans. The right pet insurance plan or policy will help when a financial burden arises. Don’t wait too long and insure your pet while they are young.