What is Pet Insurance and Do You Need It?

on November 20, 2020

PetKiddies Pet Insurance

If you are a pet parent, whether of dogs or cats or other animals, you will soon realize that regular visits to the veterinarian for an illness or surgery can quickly become expensive. The medical and surgical costs of pets can constitute a huge chunk of your expenses.

What is Pet Insurance?

As pet parents, we want only the best for our fur babies to keep them happy and healthy. If our pets are sick or injured, we would do everything we could for them and that's when pet insurance is critical. With the rising cost of veterinary care, more pets are now covered under a pet insurance policy.

You may be surprised to know that pet insurance is classified and regulated as property/casualty (also known as "P/C") by the National Association of Insurance Commissioners ("NAIC") even though it operates quite similarly to human health insurance.

The Growth in Pet Ownership and Pet Insurance

Pet insurance is a relatively new industry. In North America, according to the Insurance Information Institute, Veterinary Pet Insurance Co. (a subsidiary of Nationwide) sold its first pet insurance policy in 1982 to cover the dog playing Lassie on television.

As more and more families in the U.S. own pets, the spending on veterinary care or pet medical care has increased. The number of insured pets in America has correspondingly increased in this growing market as people are more willing to invest in the health of their pet.

What does Pet Insurance Cover?

Similar to our health insurance, pet insurance includes exclusions, different levels of coverage, deductibles, and payment limits. Most companies underwrite coverage for common household pets such as cats and dogs while only a few may offer policies for exotic birds and reptiles.

The majority of pet insurance providers offer a mix of accident and illness coverage. Comprehensive policies may cover most of the expenses for medical treatment or surgical procedures performed by veterinarians.

Optional wellness and preventive care may or may not be available, so do check with your insurance provider. Depending on the insurance plan, typical options may include dental care, acupuncture, lost pet recovery, ambulance care, or accidental death.

Pet insurance is typically subject to exclusions such as hereditary conditions (e.g. hip dysplasia) and many insurers generally do not cover supplements, vaccinations, grooming, boarding, and behavioral training.

The prices of pet insurance vary by provider and plan, which will also take into consideration the type of pet, species or breed, age, and pre-existing conditions. Policy premiums, or the price of insurance, often increase substantially as your pet grows older.

Other Insurance Protection Related to Pets

If your concern is that your dog may bite and injure someone, or accidentally damage your friend's or neighbor's antique porcelain, your homeowners insurance (or home insurance) may offer some protection in those situations.

Most standard homeowners insurance coverage include liability protection to cover you against lawsuits for bodily injury or property damage. It can also pay for damage caused by your pets. Check whether your policy covers this as well as details on coverage, exclusions, and limits.

Is Pet Insurance Worth it?

Before deciding whether to buy insurance for your pet dog or cat, be sure to carefully review the proposal form to check on exclusions, deductibles, co-payment amounts, and claim limits.

First, consider the essentials you need then ask yourself if you understand what you are buying. Are you fully aware of coverage exclusions and how other policy terms are defined? Not all states currently have laws to regulate pet insurance so you should request an explanation in clear language of the policy which you wish to purchase.

As with all insurance policies, insurance is truly worth the years of premium payments when serious medical emergencies happen. For routine vet care or relatively minor problems, you will have to weigh up the cost of the wellness option versus out-of-pocket payments for such treatment.

The best pet insurance plan is, after all, the one that meets your needs based on your pet's situation.


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