How Does Pet Insurance Work?

Nothing beats going home to wagging tails and exuberant kisses. Since the beginning of time, Fido and Felix have been tugging at their human’s heartstrings, manipulating them with those cute stares, and wrapping them around their purrfect paws. And humans adore them for it!

If you’re one of those mesmerized humans, you’re going to do everything humanly possible to make sure your pet lives the best life ever. If so, checking out pet insurance options is a smart decision. But, how does pet insurance work? This guide is a good place to start to have your questions about pet insurance answered.

What is Pet Insurance?

When you open your home (and heart) to a furry family member, the veterinary cost is part of the responsibility you’ll have to shoulder. This is where pet insurance comes in handy. If your furry friend gets injured or becomes ill, a pet insurance policy will be your cushion against the cost of medical care for your pet.

Most pet insurance will require you to pay the vet bill up front. But then you can file an insurance claim, so you get to recover a certain percentage of what you paid to the vet. This allows you more leeway in making healthcare decisions for your pet. It allows you to go with what’s best for your pet because finances are not as much of a concern with an insurance policy covering a chunk of the cost.

How Does Pet Insurance Work?

Pet insurance works pretty much like any other type of insurance. You pay a monthly premium for the policy. And typically, insurance companies would require a health checkup of your pet and a waiting period to make sure they’re not insuring a pet that’s sick already.

Once those requirements are all cleared, you’ll be given a policy, and it will indicate which conditions are covered as well as the amount of your deductible and the annual limit. Here are the most important terms you need to check in the policy:

Annual Limit: This refers to the maximum amount the insurance company will pay to cover the vet cost in a year. Some providers offer unlimited annual payouts, but you’re expected to shell out more on your monthly premium for this benefit.

Deductible: This is the amount that you need to pay before insurance coverage kicks in. This amount could range from $0 to $1,000.

Reimbursement Percentage: This is the percentage of the cost that you’ll recover once you’ve paid the deductible.

For instance, your pet has a policy with an annual limit of $12,000, a reimbursement percentage of 100%, and a deductible of $100. If your pet gets sick and incurs a vet bill of $15,000, you’ll first have to pay this out of your own pocket and then file a claim with the insurance company. In this example scenario, you could expect an $11,900 reimbursement check in the mail or deposited into your account a few days after you file your claim.

You’ll only have to cover the $3,000 difference as well as the $100 deductible. Note, though, that in this example instance, you’ll have maxed out the annual limit, and this will only reset once you renew the plan.

What Does Pet Insurance Cover?

Insurance policies are not created equal. Some policies cover accident-related veterinary costs only, while others offer more extensive coverage for accidents, illnesses, and even for your pet’s routine vet checkups.

So how does pet insurance work in terms of their coverage? Here is a list of the common coverage of most pet insurance policies and their corresponding benefits:

Accident Only Coverage

Accidents, in strict insurance terms, occur when your pet suffers from physical injuries as a result of incidents like falling down the stairs or getting hit by a car. This covers:

  • Emergency care for accidents
  • Tests and treatments for injuries

Accidents and Illnesses

Illnesses refer to unexpected as well as breed-specific medical conditions. Some insurers may even cover dental diseases with this type of coverage. But common benefits include:

  • Emergency care for accidents
  • Tests and treatments for injuries
  • Tests and treatment for illnesses
  • Emergency care for illnesses
  • Breed-specific illnesses

Accidents and Illnesses with Wellness Add-Ons

Some insurers offer wellness add-ons. Most of the time, you’ll be able to choose which specific wellness add-ons you want to include in your pet’s insurance policy.

For instance, if you’re getting this comprehensive type of coverage for your pet with rabies and heartworm vaccine add-ons, your pet will enjoy all the accidents and illnesses benefits plus routine wellness exams and both vaccines.

It’s important to note that insurance companies do not cover pre-existing conditions, which are medical issues that occur during the waiting period or before the policy takes effect. Thus, the best time to get insurance for your pet is when it’s in tiptop health.

Factors that Affect Pet Insurance Monthly Premium

The pet insurance cost varies with different providers. However, there are also several factors that would affect how much you’ll pay for your monthly premiums.

Age and Breed of Your Pet

Insurance companies will always assess risk prior to giving you a quote or issuing your policy. The higher the risk of your pet getting ill, the higher you’ll pay. That’s why when you have an older pet or a breed of dog that’s prone to develop medical conditions, you will have to pay higher for a policy.

For instance, Cocker Spaniels and Bassett hounds are prone to ear infections because of their droopy ears. Also, active or large breed dogs like Great Danes, German Shepherds, and Labrador Retrievers are more likely to develop hip or elbow dysplasia.

Annual Limits, Reimbursement Percentage, and Deductible

Some insurance companies allow you to customize your reimbursement percentage and deductible. In this case, if you opt for a lower reimbursement percentage and a higher deductible, you can enjoy a lower monthly premium. Conversely, a higher reimbursement percentage and lower deductible would also mean a higher monthly premium.


Generally, a more robust and comprehensive policy would cost you more than, say, an accident-only plan.


Vet service rates vary depending on your location. So if you live in a highly urbanized area, you will have to pay more than those who live in a small town. This is because overhead expenses are just a fraction of what vets would pay if they were to have their practice in a major metropolis.

Get the Most Out of Pet Insurance

If you are already considering pet insurance options, keep these tips in mind:

Do Your Due Diligence

How does pet insurance work? What does it cover? Does my pet run the risk of developing breed-specific conditions? These are good questions to ask when you’re weighing if getting pet insurance is a wise move.

Also, when you explore different plans, you should always take the time to read the fine prints and make sure you understand what’s covered and what’s not for a certain policy. Don’t assume that just because it’s included in the vet bill, it’s automatically covered. Sometimes fur parents realize too late that it’s not.

Strike a Good Balance Between Coverage and Cost

Paying less is not always a good thing especially when it comes to pet insurance. It’s also good to consider the possible needs of your pet in the future. For example, if your pooch has a risk for breed-specific conditions, it might be better to pay a higher premium just to make sure whatever future health issues would be covered.

Choose a Trusted Insurance Company

If you’d like to know more about pet insurance plans, get a quote through LemonBrew Insurance. LemonBrew will shop for the best plans on the market and find you the best options available to protect your furbabies. Check it out–it’s free, and no obligation; your pet will thank you!

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