How Does Insurance for Pets Work [Pet Insurance Coverage & Cost]


Owning a pet means taking responsibility for their well-being, which can become costly. So if you have a pet or are thinking of adopting one, consider purchasing pet insurance. But how does pet insurance work? This article addresses what pet insurance covers and if it’s worth buying.

What Is Pet Insurance?

Pet insurance is similar to health insurance. It covers the expensive healthcare costs of your pet. Pet insurance has gained popularity since its first introduction in the 1890s. In the last 20 years, pet owners have become more informed and aware of their pet’s health. Moreover, with the rise in healthcare costs, pet healthcare is also bound to increase.
While you may think your pet is perfectly healthy, there could be many unforeseen adversities—unexpected illnesses or unexpected injuries—that could hamper your pet’s health. Pet insurance ensures that you do not have to pay thousands of dollars for your pet’s health and gives you peace of mind. It’s essential to do your research and choose only the top-rated pet insurance available.

NOTE: As per statistics regarding pets, the average cost of raising a dog is $23,104, which makes pet insurance a good investment.

How Does Pet Insurance Work?

As a pet owner contemplating purchasing pet insurance, it’s essential to understand how it works. It works similarly to health insurance; you pay a monthly premium fee to the insurance company for coverage. Pet owners opt for such insurance because the monthly payment is typically low and provides extensive coverage. It saves money that otherwise might be spent on veterinary care.

In addition to how pet insurance works, most pet insurance policies will reimburse you as the policyholder rather than the vet. This also helps you choose the vet of your choice rather than find one that accepts the policy.

There are certain terms that you’ll encounter when applying for pet insurance, including:

  • Deductibles – A deductible is the amount of the bill you must pay before receiving reimbursement from the insurance company, which is much lower than the money you’d otherwise spend if you didn’t have pet insurance coverage.

  • Per-incident limit – Many companies also provide a per-incident limit, meaning that if your pet has had a challenging year—e.g., you’ve visited the vet more than once—you won’t need to pay the deductible.

  • Reimbursement rate – This rate is the percentage of the bill that the insurance company pays. The average rate varies between 80 and 100%, depending on the policy, plan, and health of your pet.

  • Per-incident limit cap – This includes the total amount of coverage provided by the company for a single visit or incident. In contrast, the yearly or annual limit is the reimbursement rate provided for 12 months.

  • Monthly premium – This premium is the amount paid to the pet insurance companies to keep the insurance policy active.

Another essential fact about pet insurance is that most pet insurance applies only to dogs and cats. Therefore, exotic animals (birds, frogs, etc.) are rarely covered. And if they are, the cost is much higher, and maximum payouts are lower.

NOTE: In one survey, over 30% of cats and dogs in the UK are insured.

Key Takeaways

Pet insurance is similar to health insurance in many ways. It provides financial help for your pet’s treatment in case of any unforeseen circumstances.
You pay a monthly premium to the insurance company. Most insurance companies reimburse the policyholder.
Deductibles are the amount of money paid before the insurance company reimburses you.
The reimbursement rate is the percentage of the bill paid by the insurance company, usually between 80 and 100%.

What Does Pet Insurance Cover?

Pet insurance coverage varies from plan to plan, depending on the insurance provider and price. Typically, the higher the monthly premium, the more coverage it provides.

What pet insurance covers:

  • Unexpected illnesses (cancer, parvovirus, glaucoma, etc.)
  • Unexpected injuries/accidents
  • Surgery
  • Tests/diagnostics (X-ray, MRIs, blood tests)
  • Medications
  • Emergency checkups or exam fees

Additional coverage in some plans:

  • Hospital boarding
  • Nursing
  • Acupuncture
  • Alternative therapies

Pet insurance does not cover:

  • Preexisting conditions
  • Vaccinations
  • Spaying
  • Neutering
  • Routine checkups

Types of Pet Insurance

Now, take a look at three plans you can choose from.

Accident-Only Coverage

This type of plan only provides reimbursement for accidents and emergency care, including fractures, burns, cuts, etc. Some good insurance companies for this coverage include Pets Best, Trupanion, and Figo Pet Insurance.

Accident and Illness Coverage

Does pet insurance cover the surgery? Accident and illness plans typically cover surgeries, with coverage from accidents and unexpected illnesses. Before providing insurance, most companies review pet medical history to ensure that your pet doesn’t have pre-existing conditions. Pet Assure is among the few companies that cover pre-existing conditions in some cases.

Accident and Illness Plan With Wellness Coverage

This is the most comprehensive and expensive plan available, covering accidents, illnesses, and regular checkups for deworming, dental checkups, microchipping, etc.

NOTE: 50% of pet insurance policyholders file a claim each year.

Pet Insurance Cost

What does dog or pet insurance cover? The cost of pet insurance depends on the type of plans chosen and the breed of your pet. Typically, the plans range between $12.00/month to $100.00/month. But the average monthly cost for accident and illness coverage is about $50.00 for dogs and $29.00 for cats.

Insurance companies typically charge less for common dog breeds, such as German shepherds, bulldogs, and beagles. The same applies to common cat breeds, such as ragdolls, exotics, and Maine coons—it’s much easier to determine the health condition of standard breeds.

NOTE: The pet insurance industry in America has experienced a growth rate of 13.2% since 2009.

How to Get Pet Insurance

To find an appropriate insurance provider, you must do your research. Consider our detailed reviews of some of the top pet insurance providers:

  • Healthy Paws
  • Progressive Pet Insurance
  • Embrace Pet Insurance
  • AKC Pet Insurance

In your research, find the exact price quote and compare it to other insurance companies. You must also pay close attention to what is covered and what isn’t. For example, companies provide less coverage to pets with pre-existing conditions.

But how do pet insurance companies know about pre-existing conditions? First, they require a detailed medical review of your pet’s veterinary records.

Once you’ve researched the insurance companies, presented your pet’s medical history, and have chosen the right plan at the right price, you must also choose a payment option. Some companies allow monthly payments, while others allow quarterly payments.

NOTE: One in three pets requires emergency vet treatment each year, which can substantially affect your budget.

Is Pet Insurance Worth It?

If you’re a pet parent, it’s advisable to obtain pet insurance for your peace of mind—you won’t need to worry about paying exorbitant health emergency costs.

More importantly, it’s worth it in the long term. As your pet grows older, health issues are likely to increase. Pet insurance ensures you’re able to pay for the increase in health treatments over time. Other advantages include affordable payment plans and a high reimbursement rate. In addition, you can choose the right plan for you based on your pet’s needs and your financial situation.

Is pet insurance tax-deductible? No, it is not. It will also cost more in the long run if your pet is healthy and doesn’t require frequent treatments. But despite this, your pet’s health should be your primary concern. As a pet owner, you must make informed decisions and choose the best for your pet’s future treatments.


Pet insurance provides financial protection for your pet’s health emergencies. Such insurance operates similarly to health insurance. You pay a monthly premium fee and opt for reimbursement whenever you visit the vet. There are primarily three pet insurance plans: accident-only coverage, accident-illness coverage, and accident-illness coverage with wellness coverage. Choose the right plan based on your pet’s health needs and your financial situation.


What are the benefits of pet insurance?

Pet insurance provides financial health security for your pet. It reduces the money you’d otherwise spend on health treatments by paying an affordable monthly fee.

Is medication covered by pet insurance?

Yes. Most pet insurance companies cover medication expenses in their insurance plan.

What does pet insurance actually do?

How does pet insurance work? First, you pay a monthly fee to cover the health expenses of your pet. Second, pet insurance provides reimbursement toward unforeseen health expenses of your pet, without which you may spend thousands of dollars.

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