If you’re like many people now adopting a dog or cat, you’ll need to budget for more than just chew toys and food.
Pets can contract serious diseases or get injured in an accident that could end up costing thousands of dollars for care. To ease your mind — and reduce the risk of a major vet bill — consider pet insurance.
Once a niche product, pet insurance policies have increasingly gone mainstream, and there are more options.
At the end of 2019, more than 2.5 million pets were insured in the United States, up more than 15% from 2018, according to the North American Pet Health Insurance Association.
However, advances in treatment have led to higher bills, and so pet insurance premiums have risen as well.
According to the same report, the average accident and illness premium for a dog was about $585 a year in 2019, up from $566 in 2018. (Cats are less expensive to insure than dogs, with an average accident and illness premium of $350 in 2019.)
You typically have three coverage options: accident and illness, accident-only, and wellness plans.
Wellness plans tend to cover preventive-care visits, such as routine vaccinations, and you can buy one as a stand-alone policy or as an add-on to an accident and illness policy.
If you put off buying insurance until your pet is older, you may not be able to get some illnesses covered because most policies exclude pre-existing conditions. Your animal’s breed and your ZIP code will also factor into how much you’ll pay in premiums.
Before purchasing a policy, make sure you know the deductible, reimbursement rate and maximum payout. Pet insurance deductibles range from $100 to $1,000, and the lower the deductible, the higher the premium.
You also should determine whether the deductible is applied on an annual basis or a per-incident basis.
If your finances and your pet are in pretty good shape, a per-incident deductible may be your best option because you might not be visiting your vet often. However, if your pet is a serial ribbon eater, opt for a policy with an annual deductible.
Also compare insurers’ maximum policy payouts, as caps on the amount they’ll pay may also be based on an annual or per-incident basis.
Even if you have pet insurance, you’re expected to pay for services at the time of treatment, then apply for reimbursement of covered costs. Reimbursement rates start as low as 70% but can go up to 90% of the cost of treatment.
