How Does Pet Insurance Work?

Get the details on what pet insurance typically covers, the best time to get it, major insurers and more.

Written by Delilah Gray / January 2, 2022

Quick Bites

  • Having insurance for your pet can help pay for your vet bills, such as for ear infections and surgery.
  • Pre-existing conditions are typically excluded, so it’s best to purchase insurance when your pet is young and healthy.
  • Your pet’s species, age, breed and even where you live can impact how much your policy will cost.
  • There is usually a waiting period before your policy kicks in.

In the world of insurance, one that may not be on your radar is pet insurance. But if you’re a pet owner, it’s definitely something to think about. 

Pet insurance provider Wagmo’s CEO Christie Horvath says 47% of pet parents have gone into debt in order to keep their pets healthy. 

“Having pet insurance allows pet owners to make medical decisions based on the health and welfare of their pet rather than what they can afford,” says Dr. Gary Richter, a veterinary health expert with pet-sitting site Rover. “No one should have to make life-or-death decisions based on cost. I often tell pet owners that insurance is the one gamble in life you hope to lose.”

Here’s a closer look at what you can expect from a pet insurance policy.

Inside this article

  1. What is pet insurance?
  2. Types of pet insurance
  3. Does it pay for everything?
  4. What’s excluded?
  5. How soon can I use it?
  6. How much does it cost?
  7. Top providers

What does pet insurance actually do?

Pet insurance is basically a health insurance policy for pets that’s owned by the pet owner. It both protects your pet in an emergency and may lessen the price of veterinary bills. It can help decrease your out-of-pocket cost for certain vet visits and treatments. 

And more and more Americans are getting health insurance for their pets. According to the North American Pet Health Insurance Association (NAPHIA), since 2016, the industry has seen average annual rate of growth of 18.9%. In 2020, 3.45 million pets—mostly dogs and cats—were insured in the U.S. at the end of 2020, a 23.3% increase from the previous year.[1]

Types of pet insurance

These are the common types of pet insurance you’ll find:

Dog Insurance

Just as it sounds, dog insurance is tailored for your dog’s needs. From preventive care to accidents, a dog insurance plan reimburses you for some or all of the cost of a vet visit.

Dog Liability Insurance

Also for dog owners, dog liability insurance mainly covers you from potential injuries your dog causes to others. For example, if your dog were to bite someone, you’d be covered for any legal repercussions and medical costs. However, this provides coverage in the case of an injury to folks outside of your household, not to anyone who lives with you.

Cat Insurance

Cat insurance is your basic insurance for your felines. However, it’s more beneficial for older cats and all the potential issues that come with aging. 

Exotic Pet Insurance

Have affections for pets outside the norm? Exotic pet insurance is made for you. This insurance is for pets other than cats and dogs, like hamsters, hedgehogs, reptiles and rabbits. This helps with covering procedures of all kinds, depending on your policy.

Does pet insurance pay for everything?

Like any insurance plan, those for our four-legged friends vary in what they cover. Some plans cover the entire bill for some services or just a portion, some have a deductible, some cover just emergency services. However, most policies cover illness and injury but no preventative care or pre-existing conditions.

Learn More: Does Pet Insurance Cover Pre-Existing Conditions?

“I would always recommend people get insurance for their pet as soon as possible,” Richter says, “because you never know when something might happen.” Richter also points out that it lessens the chance that your pet will already have a pre-existing condition when you purchase a policy—most policies do not cover them.

David Adler, president and owner of a small Denver-based insurance agency, Adler Insurance Group, notes that wellness plans usually skip the waiting period and can provide coverage within 24 hours of enrollment.

Pet insurance generally comes in one of three types of policies:

  • Wellness plans: annual checkups, dental work and preventative care

  • Accident plans: accidents only, but not preventative care

  • Comprehensive plans: accidents and illness, but no preventative care

What’s excluded from pet insurance?

The most common exclusions, Adler says, include:

  • Pregnancy

  • Death

  • Theft

  • Preventable diseases

  • Some age exclusions

“People shopping for pet insurance should do their due diligence with regards to educating themselves about coverage limits, deductibles, exclusions, etc.,” says Richter. “As with all insurance, it is critical to know what you are getting and what you are not getting when you sign up.”

How soon can you use pet insurance?

Brad Cummins, CEO of insurance shopping site Insurance Geek, says you can start using your insurance as soon as you have acquired it.

When you can actually make a claim from the provider differs depending on the provider.

Thomas Zheng, veterinary advisor at cat-care site Grubby Cat, says, “We work with a few companies who offer anything from coverage 10 days after starting their policy, but some require up to 30 days before coverage can take effect.”

Adler notes there’s often a similar waiting period for pet insurance: “Once you have pet insurance, you’ll likely need to wait up to 14 days or longer after your enrollment for your policy to become active. If you got to the vet within that window, it is unlikely that you will qualify for reimbursements of veterinary costs.”

How much does pet insurance cost?

According to NAPHIA, the average annual premium for accident and illness policies—which cover accidents as well as treatment for digestive issues, cancer, infections, etc.—for dogs was $594.15 in 2020, while the average for cats was $218.13. 

As with any insurance, many factors can affect pet insurance costs, including:

  • Species: Some policies only protect cats and dogs, while others work specifically with exotic pets.

  • Breed: Your policy could cost more based on the breed’s typical medical needs. For example, a larger, purebred breed might come with a higher pet insurance cost than a smaller mixed breed.

  • Age: Some plans exclude certain ages from coverage or charge higher premiums for younger or older pets, who might require more care. 

  • Location: Where you live can affect your pet insurance premium. According to Pet Insurance Guide, states like California and New York come with higher pet insurance costs due to the higher cost for care in most of their urban areas.

Top pet insurance providers

Not sure where to start? Here are a few pet insurance plans to look into:

Spot Pet Insurance

Spot’s customizable plans reimburse anywhere between 70% to 90% of eligible vet bills, with an added 10% if you have more than one pet. 

Plans are customizable, covering accidents, behavioral issues, dental issues, congenital conditions, illness and preventative coverage, including injuries, cancer, gingivitis and destructive chewing. Spot also provides a 24/7 pet health helpline.

Pawp

Pawp offers a unique model of pet insurance by focusing on telehealth appointments. For $24 a month, you can protect up to six pets and contact any vet across the U.S. 24/7 through telehealth. 

Pawp also gives you access to a $3,000 annual fund for when your pet needs immediate emergency care. 

Pumpkin

Pumpkin covers a slew of issues, including exam fees, dental issues, behavioral issues, prescription food, microchipping, alternative therapy and preventative care. 

This pet insurance plan gives all pet owners 90% to 100% reimbursements on covered vet bills, with no add-on fees. It’s available for any type of cat or dog who’s in need of health care. Pumpkin also provides full refunds for key vaccines, yearly fecal exams and annual wellness exams.

ASPCA 

ASPCA provides up to 90% reimbursement of covered costs, an added 10% discount for multiple pets and lets you visit any vet across the country. It mainly provides reimbursement for accidents, illnesses, hereditary conditions and behavioral issues, including urinary tract infections, heart disease and ear infections.

ASPCA plans may also cover therapies and medications. The only things not covered are cosmetic procedures, breeding costs and pre-existing conditions. 

Lemonade

We've all seen the Lemonade commercials, but many people don't realize the company also offers quite an extensive pet health insurance plan. It covers such things as diagnostics, procedures and medication, including blood tests, X-rays, surgeries and prescriptions.

Along with fully covering the essentials, Lemonade provides savings on a plethora of essential care such as wellness exams, heartworm tests, vaccines and dental cleanings. 

Lemonade also offers plans especially for the puppies and kitties of the household! If you want to insure more than one pet, you have to set up different policies for each. 

Walmart

Just when you think Walmart couldn’t have anything more, it shows up with pet insurance.

Walmart has joined forces with Fetch to create a more accessible pet insurance option. You can get up to 90% reimbursed for illness, diagnostics, hydrotherapy, chiropractic, virtual visits, ultrasounds and more. 

An average plan for dogs is around $35 a month, and cats cost an average of $25 a month.