How much money do you spend on your pets?  What does it take to keep them fed and sheltered?  What do your vet bills run every year?

You might want to brace yourself for this.  Last year, Americans spent over $55 billion on their pets. Most of that was for food.  But around $13 billion was spent on veterinary care. No wonder more and more of us are taking a closer look at pet insurance.  

Believe it or not, pet insurance has been available since the late 1800’s.  The very first policy was written for livestock and farm animals such as horses.  After all, horses back then were the vehicles of the day – so it makes sense to insure them.  The first policy for a dog was written in 1924 in Sweden. In 1947, Britain joined in. Finally, in 1980, North America was on board.  The famous and well-loved celebrity dog, Lassie, was the first dog in the United States to have a pet policy. Today, the North American Pet Health Insurance Association (NAPHIA) enforces universal and professional standards for terminology, quality, and ethics in the pet health care community. 

Pet insurance works a little differently than the insurance we take out on ourselves. When you’re comparing plans, it’s important that you read the plan thoroughly to  find what is covered and what is not. One provider may not cover veterinary exam fees, which are part of nearly every veterinary bill. Some providers will have vaccine or other pet care requirements that you have to follow or your claim could be rejected.

Once you buy a policy for the coverage amount you want you’ll pay a monthly premium to the insurance company. Premiums are generally based on your dog’s breed, age and health status. Your deductible is set at the amount you choose and can be applied yearly or on a per-incident basis.

When you take your pet to the vet, you pay all the costs of care up front. To get reimbursed, you have to file a claim form with the insurance company and provide them with copies of your receipts. When you buy your policy, you can choose what percentage of costs you want to be reimbursed for. You may select from 70%, 80%, and 90% reimbursement options. If you choose a lower amount, you can pay a lower monthly premium. If you go with a higher amount, you’ll get more cash back on your claims.

Here’s an Example:

So, let’s say you chose a $100 annual deductible and 90% reimbursement percentage:

If you submit a veterinary bill for $500 of covered costs, you would first need to meet your deductible.

  • If you submit a veterinary bill for $500 of covered costs, you would first need to meet your deductible.
  • $500 minus your $100 annual deductible equals $400.
  • You would then get back 90% of $400, which is $360.

You would then get back 90% of $400, which is $360.

Just like insurance for humans, there may be a waiting period before you can begin filing claims for treatment.

The types of treatment that pet insurance covers varies widely from policy to policy. For example, some policies will cover up to 90 percent of the costs of vet care if your pet is sick or injured. This includes things like surgery, hospitalization, lab tests, medications, prosthetic devices and medical care received at emergency clinics. If your pet needs routine medical care, preventive care or treatment for a pre-existing condition, the policy won’t cover any of those costs.

Other policies only cover standard medical treatments. You may actually find a policy that will pay for alternative treatments, such as acupuncture, chiropractic visits, stem cell therapy and hydrotherapy. For pets that have a predisposition for hereditary conditions you can expect to pay more for your policy.  

Is pet insurance a wise investment?  With the cost of veterinary care on the rise, pet insurance could very well be worth every penny if your pet needs expensive medical treatment. As veterinary medicine becomes more technologically advanced, the cost of care increases. Medical equipment is expensive. Facilities and training required to provide these higher-quality services can be costly.  Pet insurance can help by offsetting some or most of the costs of diagnosing, treating and managing your pet’s illness or injury.  No matter how well you take care of your pets, they can get sick or have an accident.  Just as any other insurance, pet insurance helps you face tough situations involving a large amount of money by covering most or even all of the necessary expenses. Pet insurance gives you a cushion to make the best choices instead of the least expensive ones in times of emergency. You can base your medical decisions on what is best for your pet and not on whether you can afford it.