Pet Insurance for Dogs
Pet insurance can help you cover the cost of your dog’s major medical expenses, but beware of “gotcha” traps in the contract.
[Updated November 8, 2017]
A 2010 New York Times article cited a survey of more than 1,000 pet owners, showing that fewer than half would pay more than $1,000 to a veterinarian to save their pet’s life. Only a third would pay $2,000 to save their pet. The article further stated that the result didn’t vary much by annual income; people with a household income of more than $50,000 a year were every bit as reluctant to spend big on a pet as those with household incomes of less than $50,000.
Pet insurance can help prevent the need (or perceived need) to decline medical treatment because of an inability (or unwillingness) to pay for a major veterinary expense. One of the most common statements we hear from friends whose dogs suffered a serious or chronic illness or injury is: “I wish I had gotten pet insurance.” The fact of the matter is, even the worst policy can soften the impact of huge vet bills. The better ones can make a world of difference.
Why Purchase Pet Insurance?
Pet insurance is a form of risk management. The insurer bases its premium rates on the statistical likelihood, or risk, that your dog will become ill or injured. The insurer is gambling that your dog will not have problems and they won’t have to pay anything out, making that monthly premium payment pure profit.
You’re considering risk, too, when you make a decision. If you buy a policy, you’re concerned that your furry friend will become ill or have an accident you won’t be able to afford to treat, forcing you to make a horrible life-ending decision.
We like the idea of health insurance for our pets, but we’ll be the first to tell you that choosing the right coverage requires a little crystal ball and a whole lot of common sense. With our help, you can focus on what you need and, just as important, what to avoid before signing an insurance contract.
How to Choose the Best Pet Insurance Policy
Illness coverage is what most of us consider purchasing. It means the policy will cover the expenses associated with treating your sick dog. Problems like urinary infections, vomiting, allergies, and heart problems normally are covered. Read this section carefully, though. For nearly every policy, if an illness isn’t listed, it’s probably not covered. If you don’t see words like “such as but not limited to” you may find that only the problems specifically stated in your contract are covered.
|INSURANCE||COVERAGE (w/o riders)||PRESCRIPTION||DEDUCTIBLE||CO-PAY||WAITING PERIOD*||REIMBURSEMENT METHOD||CAP||DOG AGE LIMITS|
|one standard accident/illness policy||Yes||$100||80/20||14 days||Actual cost||$3,000- $20,000||at least 8 weeks old|
|AKC Pet Insurance
|Accident only; accident plus illness||Yes||$100-$1,000||80/20||3-14 days||Usual and customary||$3,000- $16,000 annually w/ $1,500- $8,000 per incident||8 weeks - 9 years for illness and accident|
|ASPCA Pet Insurance
|4 levels from accident only - accident/illness and advanced care||Yes||$100-$250||70/30; 80/20; 90/10||30 days||Usual and customary||Vary, starting at $300 cap per incident||8 weeks - 13 years|
|Embrace (800) 511-9172||Accidents and illness||Optional||$200-$500 w/ custom options||80/20 w/ custom options||2-14 days||Actual cost||$5,000- $15,000 annually w/ custom options||14 years cap|
|Accidents and illness||Yes||$100-$500||70/30; 80/20; 90/10||15 days||Actual cost||No annual limits or caps||8 weeks- 14 years|
|Accidents and illness; accidents only or cancer only; available well care||Yes||$0-$1,000||70/30; 80/20; 90/10; 100%||3-14 days||Actual cost||$5,000- $10,000||at least 7 weeks old|
|Accidents and illness; additional plans may include well care||Yes||$50-$500||70/30; 80/20; 90/10||1-14 days||Actual cost||$5,000- $20,000||at least 8 weeks old|
|Accidents and illness; additional plans may include well care and more||Yes||$50-$200||80/20; 90/10; 100%||1-14 days||Actual cost||$10,000-$22,000||No limits|
|Accidents and illness||Yes||$100-$1,000||90/10||30 days||Actual cost||No limits||at least 8 weeks old|
|4 levels, from accidents only to comprehensive||Yes||$100-$500||100%||14 days||Benefit Schedule||$7,000- $14,000||10 years cap|
Please note: If you have trouble viewing this chart, an enlarged version is located at the top right side of this page.
Accident coverage covers your pet if he falls off the deck and breaks his leg or he’s in a car wreck (a few auto policies cover this, too, but you’ll need to check with your auto insurance agent) or he is otherwise injured. A few policies separate accident and illness coverage, but most combine the two.
Drug coverage should fall under illness and/or accident coverage, in our opinion, but you must ask to be sure. Drug costs can be astronomical, especially for larger dogs and/or chronic conditions. This is one place you don’t want to skimp. While surgery might be a one-time big-ticket item, the monthly cost of some medications – for the rest of the dog’s life for many chronic conditions – might add up to a much higher price. One veterinarian we spoke with considered this aspect a huge requirement, mentioning the frustration of diagnosing a dog’s complex illness only to find the owners were unable to afford the medication required to treat the condition.
Note that some policies will cover prescription diets from certain pet food manufacturers, at least for an initial period, but no policy we found will cover dietary supplements. Some may cover an herbal supplement if it is prescribed by the veterinarian and not given as a routine supplement.
Don’t assume that your preference to use acupuncture over NSAIDs for pain control will be a covered benefit. Alternative therapy and herbal treatments are included in some plans, while others offer this benefit as a rider. Most policies specify exactly what they will cover and who may administer the treatment.
Some insurers offer wellness coverage, which means they’ll pay for your dog’s routine care, like vaccinations, heartworm tests, neutering, or dental cleaning. However, they are often offered only as a rider on the main insurance policy.
A wellness rider benefits the dog, as it encourages dog owners to keep up with annual exams. It also benefits the insurer, as it helps ensure you take your dog to the veterinarian regularly. Regular check-ups can detect brewing problems before they erupt into a full-blown illness (and an expensive claim), thus lowering the cost of treatment and increasing the dog’s chances of survival. That said, you’ll pay dearly for wellness coverage and you can bet your bottom dollar that the limits will be, well, limiting.
Pet Insurance Policies Commonly Exclude These Illnesses, Conditions, and Injuries
Until we have a federal Veterinary Affordable Care Act, exclusions are going to be a problem in health insurance for our pets. As it stands now, many pet insurers should put the word “gotcha” right in their contracts.
Before you plunk down your hard-earned cash, make sure you can find the place in the policy that assures you get continual coverage for chronic conditions, especially cancer and diabetes. Watch carefully for limits or caps on how much a policy will pay for chronic conditions. If it seems like the number mentioned as a cap for care for that condition might be low, consult your veterinarian, who might be able to offer an educated guess on the costs an owner could face for treating that condition over the expected lifespan of a dog.
Be careful about the “what’s covered” sections in your policy. Choose a plan that doesn’t have a “cut off” date for your pet’s coverage. Like people, the older your pet is, the more likely he is to have health issues. If you’ve insured him since he was a puppy, you don’t want a plan that drops his coverage once he reaches age 10. Note: The sooner you get coverage for your dog, the less your premium will be. Some insurers have maximum and minimum ages for starting insurance for your pet.
Although it’s seen less often than several years ago, some policies do specify what they will cover, meaning they actually list the problems. We found a contract that listed “skin cancer” but not “testicular cancer.” If the policy you are considering doesn’t have a blanket statement such as “Covers all treatments for any illness or accident, including exams, diagnostic laboratory and radiology tests, surgery, treatments, hospital stays and prescription medicines,” you need to ask questions.
Ask specifically about coverage and limitations by breed, too, as they can vary widely, especially when it comes to cancer. Golden Retrievers have a high rate of cancer and are twice as likely to die from it compared to other breeds. Pet insurers know this, so they factor it into the premium and contract for a Golden Retriever. Your job is to be certain there aren’t any cancer exclusions.
Just as frustrating is the so-called “bilateral exclusion” element found in most policies. The most common involves cruciate ligament problems. If your dog injures his right knee, the insurer will pay for that treatment but immediately exclude the left knee from future coverage because this problem is automatically considered bilateral. Check specifically for the policy’s coverage for hip dysplasia, too, as it varies widely.
You might see “investigational and experimental” procedures and treatments listed as exclusions. That could mean, as just one example, if your veterinarian believes that the only remaining option to save your dog is a new electro-stimulation technique being researched at a nearby university veterinary teaching hospital, your insurance probably won’t cover the service. Note: This can be an area open to an appeal, as the exact procedures are rarely listed in this section. See “Filing An Appeal", below.
Specialist Vet Visits and Exams Are Sometimes Not Covered or Subject to a Surcharge
A specialist surcharge is sometimes included. Don’t accept this. Specialization in veterinary medicine is a growing, significant care option for your dog. Your dog could be referred to a veterinary ophthalmologist because, for example, he won’t open his eyes in the bright sun. While your primary-care veterinarian may be able to note that the eye isn’t normal, a specialist may well be required to diagnose and treat the issue.
We also saw at least one insurer that doesn’t include veterinary exams in its policies; it covers only treatment. What this means is that if your dog is sick, and your veterinarian confirms that the dog is ill, the policy will cover the treatment costs but not the exam itself. While this may seem odd, we understand the logic and wouldn’t quibble about it, since it results in a lower monthly premium. However, if you’re the type of dog owner who would rather be safe than sorry, taking your dog to the vet every time he sneezes or goes off his feed, you probably should select a policy that covers exams.
Most policies exclude preventable diseases from coverage, another exemption that seems acceptable to us. If you didn’t keep your dog on regular prescription treatment for heartworm and he becomes infested with heartworms, chances are your insurance won’t cover treatment for the predictable heartworm infection that results. If you use unconventional methods of controlling preventable diseases, such as homeopathic autoisodes instead of conventional vaccines, and your dog contracts a disease, the cost of treating the disease will undoubtedly fall completely to you.
Of course, no policy will cover elective or cosmetic procedures, anymore than your own health insurance will cover a face-lift. A service must be medically necessary. Ask about dental extractions, which are far more common (and expensive) than you may imagine, to ensure they’re covered.
Heredity or genetic abnormalities are often covered as long as the dog hasn’t been diagnosed with the condition prior to the policy waiting period. This could, however, have a specific breed exclusion listed on the policy.
Insurers won’t pay for pre-existing conditions that were in place prior to the effective date of the policy or any listed waiting periods. That’s understandable. If insurance companies didn’t include that exemption, we’d all just wait and get pet insurance after our pet was ill.
If you use your dog for any commercial use, such as law enforcement, racing, hunting, or breeding, check to see that there are no exclusions as to what defines an accident. If you’re not sure if you use your dog for a commercial purpose, ask the insurer.
The Cost of Pet Insurance
Every pet insurance company we looked at had a co-insurance plan. That means there is a percentage of the claim the insurance company will pay and a percentage you must be prepared to pay. We found most range from 70/30 to 90/10, meaning when you file a claim, the insurance will pay 70 percent (or 90 percent) of the eligible expenses and you pay the balance.
Because insurance is basically risk management, we accept this type of policy. It’s strictly financial: The lower the percentage the insurance must pay, the lower your monthly premium should be. There is no right or wrong answer here, but you must realize that 30 percent of a $10,000 veterinary bill is $3,000. You could max out your credit card on one pet surgery, even with insurance!
Most plans have deductibles, too. When you have a deductible, the insurance funds won’t kick in until you have paid out that pre-determined amount of money toward the veterinary bills. A high deductible lowers your monthly premium.
This is similar to most car insurance policies or, sometimes, your own health insurance. If you feel like you probably won’t ever need that insurance, you might want a larger deductible. On the other hand, if your new puppy is so energetic and daring you think he’s an accident waiting to happen, the lower deductible might be worth the extra cost.
Since you know ahead of time what your policy’s deductible will be, you might consider a savings account earmarked just for your dog’s deductible as a safeguard. That way, you’re doubly prepared.
Using a credit card should be your last resort. If your dog is injured and you’re forced to place a $1,000 deductible on a credit card, you’re going to pay out a lot of money. At 14% interest, paying the minimum payment each month will take over 13 years and cost you an additional $954.74 for interest. (Obviously, paying it off at a faster rate will reduce the interest charges; this is the worst-case scenario.)
There are a few “gotcha” items when it comes to deductibles. Find out how the deductible is applied in your pet insurance contract, whether it’s “per incident” or “annual.”
A per-incident deductible is applied every time your pet gets sick. If he goes in for treatment three times in one year, you pay a deductible three times. We think this is ridiculous.
With an annual deductible, once you’ve paid that deductible amount for the term of the contract, the insurance will cover – at the co-insurance percentage you selected – veterinary costs for the remainder of your contract.
Find out, too, exactly how the deductible might be applied and at what remaining amount the insurance company’s obligation begins. Some policies state they subtract the deductible before calculating the co-insurance. For example, let’s take a policy that has a $500 deductible and is a 70% insurance/30% pet owner co-insurance plan. In this case, the covered expenses – which may or may not be the total amount of the vet’s bill (more on that later) – is $5,000. The insurer will take your $500 deductible right off of that $5,000 and then calculate the co-insurance from the remaining $4,500. So the insurer will pay $3,150 (the 70%) and you pay $1,850 (the deductible and your 30%).
However, if you choose a company that first calculates the co-insurance and then subtracts the deductible from that amount, the game changes. At $5,000 covered expenses, your insurer’s responsibility is $3000 (70% of the $5,000 claim amount, less your $500 deductible). You are responsible for $2000.
3 Things to Know About Pet Insurance Reimbursement
Insurers define the reimbursement for covered expenses in one of the three methods we list in this section. Be sure it’s clearly defined in your contract and that you understand it.
1. Benefits Schedule. With this method, the insurer has a pre-determined payment amount for each procedure. If you ask, the insurer can send you a sheet that tells you how much they will reimburse for a given problem. While this schedule allows you to know ahead of time what you’ll receive in reimbursement for a service, it offers little room for negotiation or appeal. The insurance payments tend to be low – barely beginning to offset the amount of money the veterinarian actually charges.
Deductibles can be a major issue here, too, depending upon the schedule the insurer is using. A benefits schedule with crazy low reimbursement rates, combined with a per-incident deductible, may prevent you from ever reaping any benefits of having a policy. For example, a $1,000 veterinary bill for a procedure with a pre-determined benefit schedule payment of $300 and a per-incident deductible of $300 would mean you’re footing the bill for the entire $1,000. Frankly, we’re not keen on benefits schedule policies.
2. Usual and Customary Charges. Many insurers use a “U&C” amount to reimburse you for the covered charges for a veterinary visit. Indeed, health insurers also use this standard to set contracted pre-negotiated rates, which are updated annually, with the physicians you see. The U&C amounts should be based on the veterinary fees in your area. For example, it would be unfair for an insurer to inflict the fees charged by veterinarians in Birmingham, Alabama (one of the least expensive place to live), on dog owners living in Manhattan, one of the most expensive places to live.
U&C is certainly a better choice than a set fee schedule, as the term itself should allow you to appeal an inadequate reimbursement. Let’s say your dog is seen by your veterinarian for gastritis. The bill is $500, but your insurer says the U&C rate for this condition is $300. You would have to then determine if your veterinarian might be a little more expensive than the average vet in your area or if you feel the insurer is reimbursing at an unfair rate. If you think it’s unfair, you should appeal (see “Filing An Appeal”, below).
3. Actual Veterinary Bill. This is the most predictable option, though it may also be the one with the highest premiums. Choosing a policy that reimburses you for a known percentage of your veterinarian’s actual bills allows you to better forecast the ultimate cost of your dog’s treatment.
Beware of Pet Insurance "Incident Limits"
Many pet insurers have annual limits on what they will pay, enticing consumers with seemingly low premiums. Don’t be fooled. We’ve seen insurance policies with annual limits as low as $5,000, even less for seemingly bargain-basement premiums. You’ll need to remind yourself that you’re getting insurance to cover the catastrophic problems your dog might face, and veterinary care is not getting any cheaper. A relatively simple surgery to remove a foreign body your dog swallowed can be upwards of $4,000. We recommend unlimited coverage – no caps or limits.
“I won’t be without it on any of my dogs. For the policies I chose, basically catastrophic coverage with a high deductible, the cost over the lifetime of a dog is less than what I would pay out for one major incident – cancer, torn cruciate, surgery. I don’t want cost to be a factor in whether or not my dog gets treatment,” says Wendy Archinal, a breeder and trainer of Brittanys in upstate New York.
Even worse than insurance contracts with annual caps are policies with “incident limits.” Just say no. Let’s say you spring for a $20,000/year insurance plan, meaning your insurer will pay up to $20,000 for your dog’s veterinary care. Sounds okay, right?
But what if your dog is hit by a car and requires extensive surgeries to return to normal? If that $20,000 policy has a $2,500 per-incident limit, you could easily hit the limit before the dog is prepped for surgery! We know of no logical reason to purchase an insurance plan with a “per incident” limit.
Don't Wait to Insure Your Dog
The longer you delay insuring your dog, the higher the premium to do so will be. That’s because age increases the risk of illness. That’s why some insurance providers don’t even offer new insurance for dogs who are past a certain age.
“I plan to start coverage with the new puppy. My older dog already has some pre-existing conditions, so I’m not sure what kind of coverage I could get for her. The other dog has had a tooth removed and may need X-rays for her shoulder. Those things add up quickly, so I’m thinking ahead with my new puppy,” says Christine Fleischmann, a successful agility competitor in New York and owner of two AKC agility champion dogs.
Larger dogs cost more to insure than smaller dogs. This is partially because of predominantly big-dog problems, like hip dysplasia, and the cost of drugs for their weight.
Breed also enters into your premium calculation. A high-maintenance Bulldog is expensive to insure, not because he’s big, but due to his natural propensity for ailments such as respiratory problems and skin-fold dermatitis. On the other hand, the tough little Jack Russell Terrier enjoys one of the lowest insurance premiums.
It’s worth it to ask the insurer about discounts. You may be entitled to a discount thanks to your membership in AAA, AARP, an animal welfare group, or some other organization. One insurer, Embrace, offers a discount on your deductible for each year there are no claims filed. Multiple pet discounts are also common, as are special discounts for those who work in the veterinary community, military, and more. Your employer may even be able to organize a pet-insurance benefit for you and your coworkers.
Pet Insurance Waiting Periods
You can’t escape the pet-insurance waiting period, which is the time from when your policy officially starts to the time when any veterinary care that your dog receives will actually be reimbursed. The length varies by policy from a day for accidents to a full year for heredity conditions and some orthopedic problems.
The reason for a waiting period is to help the insurer avoid fraudulent claims, such as a dog who is injured on Monday morning and the pet owner tries to purchase insurance Monday afternoon, before walking into the vet’s office for treatment. While some of the lengths might be a bit on the ridiculous side, the concept itself is understandable.
Hip dysplasia, back injuries or disc disease, and knee injuries (cruciate ligaments) tend to have very long waiting periods. Be aware that if your dog begins to show signs of a problem during a waiting period, that condition will not be covered under the policy and, yes, they request records from your veterinarian.
Read your contract carefully. A few companies waive waiting periods for some problems, like knees, if you have your dog examined by a veterinarian, and the vet then signs a certificate stating that there is no evidence of disease.
Filing an Appeal
Insurance companies are in the business to make money, and anything they can legally deny, they will. However, that doesn’t mean they’re always right. You can file a letter of appeal with your insurer, but you need more than a stern letter. You need proof that you’re right. The evidence you need depends upon the disagreement and your contract.
If they’re denying payment for a treatment because they considered it not medically necessary, or experimental/investigative, consider sending them proof to the contrary, such as statements from other veterinarians and veterinary groups that support your case, research papers that support the treatment, and even case histories of dogs with similar illnesses who recovered successfully with the treatment you chose for your dog.
If the plan you have chosen has a “benefit schedule,” it will be very difficult to win an appeal because you have already in essence agreed to accept specific, set reimbursements for any care needed by your dog. If you have a U&C contract, you’ll need to include tangible proof that the amount charged by your veterinary is “reasonable.” Consider sending them Internet searches that show similar charges, examples of other cases and fees similar to your bill, and cost-of-living comparisons, if you suspect the U&C didn’t take your geographic location into consideration.
Be prepared to fight. Rarely do you win on first appeal; instead, you will likely receive an initial rejection, repeating your contract provisions. If your case has merit, most insurers will give in with your second letter. However, you may have to appeal to your state’s insurance commissioner. Some states require a small fee (about $50) before they will examine your appeal, but it may be money well spent, as most companies want to avoid being frequently scrutinized by the state and they may give in to your request almost immediately upon receiving news of your appeal at this level.
What We Suggest
If you think you should insure your pet, the time is now. Every month you wait increases the premium. You don’t have to worry about changing veterinarians, as most allow you to see your regular veterinarian (but you should still see that in writing!). In fact, it’s important to read the entire contract – every word – and talk to a company representative with any question you have. Ideally, the representative can point out the places in the printed contract that clarify the things you had questions about.
We’d choose a policy with illness, accident, and prescription coverage. Otherwise, you’ll be frustrated when you file a claim. Avoid policies with per-incident limits or caps. Look for “chronic-care coverage” and discuss any caps with your own veterinarian to ensure the coverage is adequate.
We’d also suggest saving money by skipping riders you don’t need. The big one is wellness, but we also saw coverage for other basic dog-care items, like nail trims and boarding. Those costs shouldn’t need to be insured; they are just part of owning a dog.
We recommend insurers who base their coverage on the actual fees charged by your veterinarian. However, you are ultimately responsible for your veterinarian’s fee, and in most cases, you must be able to pay for services in advance, even in an emergency; the insurance company reimburses you at the schedule you have agreed to.
Veterinary medicine offers incredible therapies and treatments for the canine members of our families. Unless you’re very wealthy, these services can add up quickly. A simple savings account, as suggested by some consumer groups, is not likely to cover the cost.
If you get pet insurance and never need it, lucky you. But if your dog is diagnosed with a chronic illness and you don’t have the insurance, you may be faced with a terrible decision or a financial hardship.
Cynthia Foley is a freelance writer and dog agility competitor in Warners, New York.