Introduction

Pets bring joy and companionship into our lives. However, they can also bring unexpected expenses when illness or injury strikes. Pet insurance can help offset a costly vet bill, but to get the most value from your policy, it’s important to avoid these six common mistakes.

1. Waiting Until There’s an Issue

Your dog starts limping on Wednesday, so you buy pet insurance on Thursday and make a vet appointment for Friday, expecting insurance to cover it. Not so fast: Most pet insurance policies have waiting periods before coverage kicks in. Typically, you can expect waiting periods of a few days for accident coverage, a few weeks for illness coverage, and several months for orthopedic issues.

What’s more, pet insurance generally won’t cover pre-existing conditions—that is, any health problem your pet had before you bought insurance. The longer you wait to purchase pet insurance, the greater the chances your pet will develop health issues that will be excluded from coverage. You’ll generally pay less and get more comprehensive coverage if you buy pet insurance while your pet is young and healthy.

2. Not Choosing the Right Type of Coverage

Most pet insurance providers offer three kinds of coverage:

• Accident and illness insurance: Covers injuries due to accidents, such as getting hit by a car or bitten by a dog, and illnesses, such as cancer or ear infections.
• Accident-only insurance: Covers injuries due to accidents, but doesn’t cover treatment for illness.
• Wellness coverage: Pays for preventive care, such as vaccinations, flea and tick medication, and routine vet exams. It’s generally offered as an add-on to the other types of coverage.

Depending on your insurance provider, coverage for specific treatments (such as behavioral issues or dental care) may be standard or may require purchasing add-on coverage. Understanding what each insurer’s offerings cover (and don’t cover) can help you choose the right policy for both your pet and your budget.

3. Not Understanding Your Financial Responsibility

Premiums aren’t your only cost concern when purchasing pet insurance. Insurance policies don’t cover the full cost of veterinary care. You’ll generally have to pay a deductible, which may be annual or per-claim and typically ranges from $0 to $1,000.

You’ll also select how much the plan reimburses you. Generally, you can choose reimbursement rates between 60% and 90%. If your plan has an 80% reimbursement rate, for instance, insurance pays 80% of the vet bill and you pay 20%. Wellness insurance typically covers a set amount for each claim, such as $75 annually for vaccinations or $50 annually for a routine vet visit. Researching average prices for local veterinary services can help you estimate how much various plans might save you.

4. Not Reading the Fine Print

Don’t make your decision based solely on an insurance provider’s ads or what’s touted on their website homepage. Dig into the details by reviewing a sample insurance policy (you can usually find one on the insurer’s website). Carefully review:

• What is covered and excluded: There may be a fine line between the two. For example, a policy might cover prescribed supplements and vitamins, but only during treatment for an illness.
• Coverage limits or caps: In addition to annual or lifetime maximum payouts, there may be caps for specific treatments. A policy with a $10,000 annual maximum payout may cap behavioral health coverage at $1,000, for instance.
• General terms and conditions: Getting coverage may require providing your pet’s medical records, taking your pet for annual physical and dental exams, or visiting the vet within 48 hours of noticing a potential health problem. Make sure you can meet the required conditions.

If you’re not sure what something means, contact the insurance company and ask.

5. Not Shopping Around

Comparing pet insurance policies before you buy could save you hundreds of dollars per year. Gather quotes from several insurance carriers, being sure to compare the same type and amount of coverage.

Start your search by asking your vet or checking the North American Pet Health Insurance Association (NAPHIA)’s list of member companies. Your current home insurance or auto insurance company may sell pet insurance too. To save time, you can visit an online pet insurance marketplace. Provide some basic information about your pet and get quotes from dozens of insurance providers in minutes. You can typically adjust reimbursement rates, coverage, and deductibles on each provider’s website to see how various changes will affect your premiums.

6. Not Looking for Discounts

Increasing your deductible or lowering your reimbursement rate can help you save money on pet insurance, but you can also find deals without cutting coverage. Your insurance company might give you a discount if you bundle pet insurance with home or auto insurance. Your job or organizations you belong to may offer deals. You might also qualify for discounts if you insure more than one pet; adopt a shelter animal; or spay, neuter, or microchip your pet. Some insurers offer discounts if you pay your annual premium upfront or pay online.

Is Pet Insurance Worth It?

Pet insurance can be worth the cost if you would struggle to pay a big vet bill on your own. Without insurance, you might have to deny your pet critical veterinary care. Pet insurance can also be a good idea if your pet is older or prone to breed-specific health issues and you can find coverage for these conditions.

However, you might not need pet insurance if you have a big emergency fund or other resources to cover a major expense. You might also want to skip pet insurance if the premiums are so high that the benefits barely outweigh the cost. For example, a wellness plan that costs $225 a year but caps annual payouts at $250 only nets you $25 in benefits. Instead, consider putting that money into a sinking fund for veterinary care.

The Bottom Line

Purchasing pet insurance can help offset the cost of veterinary treatment, but it doesn’t cover every medical expense your pet may have. Adjust your budget to cover everyday pet care expenses and build up an emergency fund to handle unexpected vet bills. Opting for a high-yield savings account could help your savings grow faster, so you’re better prepared to care for your furry friend, no matter what the future brings.

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