What is Pet Insurance?

In the United States, around 70 percent of households have a pet. Over the last two years, approximately 30 percent of American families adopted a pet. It’s fair to say that Americans are in love with our pets. They are our family. Yet pets are expensive! Is there a way to make veterinary care more affordable?

The concern is real. Veterinary services alone can cost upwards of $2,000 per year or $20,000 during a pet’s lifetime. Of course, surgical procedures and specialists can significantly increase those costs.

$2,000 per year is a bargain compared to what humans might pay for the same procedures. Pet hospitals have all the same equipment as human hospitals, yet the bills are a fraction of what humans pay. Still, tests and procedures add up. Like most human medical visits, an expensive vet bill is a shock to the budget unless the pet is insured.

Increasingly, pet parents are protecting their fur babies with pet insurance, sometimes from the same companies that insure our cars and homes.

A very brief history of pet insurance

In 1982, Veterinary Pet Insurance, a division of Nationwide Insurance, broke ground in the country’s pet insurance industry by selling the very first-ever pet insurance policy. The policy was to cover TV’s Lassie.

However, until recently, insuring a pet was relatively unheard of. The last few years, though, have seen dramatic growth. Since 2016, the industry has experienced an annual growth rate of nearly 25 percent.

Today, it’s not uncommon to hear people in dog parks discussing pet insurance companies and comparing their coverages. Perhaps that’s why the vast majority of pet policies cover dogs, with an average annual premium of $594.

What does pet health insurance cover?

Shopping for a pet health insurance policy is like stepping back in time to before 2010. Unlike the human health insurance industry, the pet insurance industry is largely unregulated.

Pet policies don’t cover preexisting conditions, and as the pet ages, they become a lot more expensive to insure. That’s why most people purchase their policies within six months of adopting their pets.

Some pet insurance companies cover euthenasia costs incurred due to pet loss, but not burial or cremation.

Further, most policies include deductibles, per-incident limits, and annual caps on coverage. In addition, most policies don’t cover routine vet visits, vaccinations, teeth cleaning, spaying and neutering, and preventative care. Some, however, cover alternative treatments such as acupuncture and chiropractic.

Most pet insurance companies don’t pay the vets directly, which means you have to pay for the vet visit and then file for reimbursement.

A rundown of pet health insurance companies

A lot has changed in the pet insurance industry since 1982. Nationwide still provides pet insurance, but they proudly display the Nationwide logo today. They have a lot of competition. Now, there are around 20 companies providing pet health insurance. We’ve looked at several of them, and these are some of the best.

Healthy Paws

While pet insurance reviews are somewhat subjective, Healthy Paws constantly rates as one of the best pet insurance companies.

Healthy Paws’ coverage is relatively standard. As long as their vet didn’t diagnose the conditions before coverage, Healthy Paws covers illness, cancer, genetic disorders, and they even reimburse for dental care such as tooth extractions.

Healthy Paws has no caps or limitations on coverage; they cover breed-specific conditions like hip dysplasia and several alternative procedures such as acupuncture and chiropractic care.

Healthy Paws does not cover wellness exams or preexisting conditions, and they have no multi-pet discounts. However, there is an annual deductible and a per-incident copay.

Filing a claim is easy. All you have to do is upload a picture of the invoice, and Healthy Paws typically processes it within 10 days. Once the claim is processed, they generally pay within 24 hours. The average monthly premium for a dog is around $40 and about $13 for a cat.

Trupanion

As with Healthy Paws, Trupanion’s coverage includes no payout limits. Unlike most other pet health insurance companies, they have no annual deductible. They even pay vets directly, so all you have to do is pay the copay and your portion at the time of the visit.

Trupanion has a couple of uncommon features. You can purchase additional coverage for property damage from the pet and even the reward for a lost pet. In addition, their deductibles are per condition, not per year.

The monthly premium for a dog will run you around $65, and for a cat, $30.

ASPCA

The American Society for the Prevention of Cruelty to Animals (ASPCA) is one of the largest animal rights organizations in the world. ASPCA, the pet insurance company, licenses the use of the name, but there is no direct affiliation.

ASPCA offers a variety of plans so that you can pick your coverage, deductibles, and limits. While they don’t cover preexisting conditions, if your pet is free from symptoms for 180 days, the condition is no longer considered preexisting.

ASPCA takes longer to pay than some other companies. Expect up to 30 days to process a claim.

While rates vary depending on coverage, you can expect to pay around $35 per dog and $20 per cat.

Nationwide

Of course, we couldn’t leave Nationwide, the original pet insurance provider, off our list. Nationwide offers a variety of plans with varying coverage. Some only cover accidents and illnesses, and others even cover nail trimming. In addition, not all plans have copays. They also offer bird and exotic pet coverage.

Premiums are breed-specific but expect to pay $60 and up for a dog per month, and $35 or more for a cat.

Lemonade

Lemonade is relatively new to the insurance marketplace. Lemonade has a charitable business model. Rather than profiting from unspent yearly premiums, they donate as much as 40 percent of extra revenue to pet charities.

Lemonade offers a 10 percent discount for bundling pet health insurance with their other insurance products. They provide preventative treatment for pets under two years old and various coverages, deductibles, and copays.

As with Nationwide, premiums are breed-specific. A 1-year-old Labrador, for example, will run you about $30 a month, while a mixed-breed dog will cost about $10 less. Cat policies start at about $11 per month.