Pet Insurance Dictionary: Understanding Insurance Lingo

Important Pet Insurance Terms

It can be hard finding the right pet insurance for your fur baby. And all of those odd pet insurance terms and phrases you come across can make your research all the more difficult. We’ve created a handy resource of key terms and definitions to make your life and research easier!

A

Accident – Covers injuries such as broken bones, cuts, bites, poisonings, and trauma from events like falls or car accidents.

Accident and Illness Coverage – A common type of pet insurance that provides reimbursement for veterinary treatment related to accidental injuries and illnesses that occur after the policy effective date.

Annual Limit – The maximum amount an insurer will reimburse per policy year, typically $10,000 or more.

B

Benefit limit – The maximum dollar amount an insurance company will pay per claim, condition, or annually. Limits can be $2,000-$10,000 or higher.

C

Chronic Condition – An ongoing illness like diabetes or allergies that persists and requires long-term treatment.

Claim – The request you submit to insurance company to get reimbursed for vet expenses. Claims can be submitted online, by phone, email, or mail.

Claims Adjuster – A claims adjuster reviews pet insurance claims and determines whether the claims should be paid and what amount is owed to the insured. Pet insurance is very similar to auto insurance or homeowners insurance. When your dog or cat gets sick or injured you submit a claim to the insurance company and they assess the loss and send you a check.

Clinical Signs – Observable changes in a Pet’s normal healthy state, bodily function or behavior. If your pet shows clinical signs for a disease or illness when you enroll in a pet insurance plan those health issues will be considered pre-existing conditions. This is why it’s so important to get insurance for your pet while they are healthy and symptom free.

Coinsurance – The percentage of the vet bill the insurance company will reimburse after the deductible is met. Typically 80%-90%.

Copay – The percentage of the vet bill you are responsible for paying after the deductible is met. Common copays are 10%-20%.

Coverage – Pet insurance coverage refers to the scope of protection in the insurance policy. Options range from accident only policies to comprehensive plans that cover everything. The broader your coverage and the higher your limits the more expensive your plan will be. We recommend all pet owners to get a least a major medical plan to ensure that any unforeseen medical issues are adequately covered. There are three different levels of coverage when considering pet insurance.

• Accident Only Policy – These plans are less expensive than major medical plans, but only cover claims for accidents. We don’t recommend these plans because illnesses are more likely and more expensive to treat.
• Accident and Illness Plans – Most popular. These plans account for over 98% of all pet health insurance plans purchased. Major medical plans cover everything except wellness care.
• Wellness Plans – Some companies allow you to add wellness coverage to a standard major medical plan. These plans cover expenses for routine care such as annual exams, heartworm meds, dental cleanings, etc.

D

Deductible – The amount you pay out-of-pocket for your pet’s vet expenses before the insurance coverage kicks in. Deductibles typically range from $100-$1,000 per year.E

Diagnostics – Covers x-rays, blood tests, MRI/CT scans used to diagnose accident or illness conditions.

Effective Date – The effective date is the date is the 1st day when coverage begins. After you enroll there is a waiting period until the effective date starts. Most companies have separate waiting periods for accidents, illnesses, hereditary and orthopedic conditions. It’s important not to confuse the effective date and the enrollment date. Many pet owners believe coverage starts the day they enroll and that is not the case. Coverage begins on the effective date after the waiting period is over.

Enrollment – Signing up for a new pet insurance policy. This may include answering health questions about your pet’s medical history.

Exclusion – Pre-existing conditions, dental disease, wellness care, and other excluded conditions.

G

Guaranteed Renewable – A pet insurance policy provision that guarantees the pet owner has the right to renew coverage at every policy anniversary date regardless of the age of their pet or the health status of their pet. With a guaranteed renewable policy the company cannot cancel coverage except for nonpayment of premium by the policyholder, however, the company can raise rates if they choose, provided they have specified this rate increase in the policy and are consistent with price changes. Policies with guaranteed renewable clauses provide continuous coverage without disruption, which gives you and your pet peace of mind.

H

Hereditary conditions – Illnesses with a genetic component, which may or may not be excluded by insurers.

Hereditary Disorder – A hereditary disorder, or genetic disorder, is a condition that is passed down to a puppy or kitten from their parents. Not to be confused with a congenital condition, which is a health issue that develop in the womb or shortly after birth. It’s important that the pet insurance company you choose covers hereditary disorders because they can be extremely expensive to treat.

Hospitalization – Covers expenses related to emergency vet hospital/clinic stays and monitoring.

I

Illness Coverage – Illness coverage helps pay for veterinary care when your pet suffers from a serious illness or health condition. Some of the most common and expensive veterinary care is to treat illnesses for dogs and cats. Unlike accidents, which are relatively straightforward, illnesses and long-term health conditions can require treatment over a long period of time. In most cases illnesses are more expensive than accidents and are more common so we encourage all pet parents to enroll in accident and illness plans.

Incident – Each individual accident or illness that your pet suffers from during the life of the policy. For instance, if your dog broke his leg in April and then swallowed a sock in September that would be considered two separate incidents. The definition of an incident is important because pet insurance companies tailor their policies based on incidents. Some companies have per incident deductibles, which means they charge a deductible for each incident. The alternative to a per incident deductible is a standard annual deductible. Other companies also have incident limits, which means they have a limit on how much they’ll pay for each individual limit.

L

Lifetime limit – The maximum amount an insurer will reimburse over the lifetime of your pet, often $100,000 or higher.

M

Maximum Limit – The max limit is the most a pet insurance company will reimburse you for claims. Some pet insurance companies have a per incident limit where the max limit applies to each individual incident. For example if your dog broke his leg the max limit would apply to treatment for the broken leg. Other companies have an annual limit where the max limit applies to all claims made during 12 month period. Before choosing a company it’s important to see what the company’s maximum limit is so you’re not surprised when you make a claim.

O

Orthopedic Condition – An orthopedic condition refers to health conditions that involve the musculoskeletal system. The musculoskeletal system is made up of the body’s bones (the skeleton), muscles, cartilage, tendons, ligaments, and joints. Most pet insurance companies have 6-12 month waiting periods for orthopedic conditions to avoid adverse selection. This is one of the many reasons it’s important to enroll your pet while they are young and healthy. However, if you’d like to reduce the 6-12 month waiting period many companies allow you to submit an orthopedic exam waiver after enrollment. This waiver will waive the 6-12 month waiting period if your pet is found to be healthy during the exam.

Orthopedic Exam – An orthopedic exam is an optional medical evaluation that can be done by any licensed veterinarian to reduce the waiting period or orthopedic treatment. During an orthopedic exam the veterinarian will examine your pet’s knees, elbows, hips and back to determine whether or not there are any pre-existing orthopedic conditions. If your pet passes the orthopedic evaluation with a clean bill of health then waiting periods for orthopedic health conditions like hip dysplasia and ligament tears can be reduced from 6-12 months to 14 days. Orthopedic exams are not offered by every insurer so check with the company before enrolling.

P

Per Incident Deductible – A per Incident deductible is the amount that must be paid out of pocket by the pet owner per incident. For example, if you have a $200 per incident deductible you will pay $200 each time you make a claim. So if your dog suffers from a broken leg the broken leg is the incident and you would be required to contribute $200 toward the treatment. If your pet has multiple incidents in one calendar year you would be responsible for the $200 deductible each time with this type of policy. Some pet insurance companies have an annual deductible where you only pay the deductible once per 12 month period regardless of how many claims you have. Whether you choose a company with a per incident deductible or annual deductible it’s important to note that the higher the deductible you choose the lower your pet insurance plan will cost.

Per Incident Limit – A per incident limit is the maximum a pet insurance company will pay per incident. For instance, if you have a $5,000 per incident limit and your dog needs surgery because he ate a tennis ball the most the company will pay for the surgery is $5,000. While some insurers have a per incident limit, other pet insurance companies have annual limits. These companies don’t have individual limits on claims, but they do limit how much they will pay out in a given 12 month period. It’s important to check the maximum limit before buying a pet insurance policy so you’re not surprised when you file a claim.

Pet Hospital – A pet hospital is just that, a hospital for pets! However, there are some key differences between pet hospitals and human hospitals. For example, pet hospitals are not required to be accredited like human hospitals. However, given the choice, you’d be crazy not to take your dog or cat to an accredited pet hospital.

Pet Insurance Agent – There are two types of pet insurance agents, captive agents and independent agents. Captive agents sell insurance from one pet insurance company. Independent insurance agents sell insurance from multiple pet insurance companies. The benefit of using a pet insurance agent is they can help you compare options and explain coverage. As a matter of fact, we’re licensed pet insurance agents who can answer your questions about coverage and help you find the perfect plan. Just like home and auto insurance, pet health insurance is regulated as property and casualty insurance so if you talk to a pet insurance agent ask for their license and what companies they represent.

Pet Insurance Policy – A pet insurance policy is just like an auto or homeowners insurance policy. It pays claims when something unexpected happens. Pet insurance is health insurance for your pet, so if your dog or cat gets sick or injured it will help pay for veterinary bills. Most plans pay 80-90% of your veterinary bill so if your pet suffers from a serious health problem the policy will reimburse you for the vet bills. Pet insurance policies contain six key sections. Each is important to understand what’s covered and what’s not.

Pet Medications – Pet medications can be expensive, particularly prescription drugs for chronic conditions. Pet insurance companies have different coverage options related to pet medication coverage so it’s important to understand what’s covered and what’s not. See how each pet insurance company handles pet medications and enroll in a plan before your dog needs expensive medication.

Policy Conditions – Not to be confused with pet health conditions, are provisions that either qualify or place limits on the insurance company’s promise to pay. If the policies conditions are not met by the insured (you) then the insurance company can deny a claim or limit payment. Some common pet insurance policy conditions include:

• Document proof of loss in a timely manner
• Protect property after a loss
• Cooperate by providing timely information and detail during the claims investigation

It’s important that you follow the policy conditions to ensure your claims are paid and paid in a timely manner. A pet insurance policy is a contract with the insurance company that outlines your coverage. Like most insurance contracts a pet insurance policy has six sections.

Policy Declarations – The section of a pet insurance policy that outlines the key coverages, terms, and conditions of the policy. The declarations serve as a summary of the policy. Key details include:

• Policyholder name and address
• Pet’s name, species, breed, gender
• Coverage type – accident only, accident & illness, etc.
• Policy effective dates and renewal frequency
• Deductible amount
• Reimbursement percentage
• Co-payment percentage
• Benefit limits for accidents, illnesses, and annually
• Exclusions such as pre-existing conditions
• Premium cost and payment schedule
• Insurer contact information

The policy declarations outline the unique coverages, costs, and terms that apply to a specific pet insurance policy. It serves as a quick reference highlighting the key policy features and coverages that the insurer will provide. Reviewing the declarations helps policyholders understand what is and isn’t covered by their selected pet insurance plan.

Policy Definitions – Every pet insurance policy has a definitions section. The definitions list important pet insurance terms used in the policy to help you understand coverage. The definitions may be included in the body of the policy or as an attachment. The definitions are extremely important because they provide clarity for what’s covered and what’s not covered. Policy Endorsements – A pet insurance company may change the language of a policy or adjust coverage with endorsements and riders. Typically endorsements and riders are written at the time or renewal to add, delete or modify provisions in the original policy. The pet insurance company is required to send you a copy of the changes. In most cases endorsements and riders enhance coverage but you pay for it at the time of inception.

Policy Exclusions – An exclusion is conditions that are not covered by the insurance policy. Every pet insurance company has different exclusion lists. Some companies have very few exclusions (good) while others try to exclude as much as possible (bad). Here is a list of common pet insurance exclusions.

• Pre-Existing Condition
• Bilateral Condition
• Elective Procedures

Make sure you check for exclusions before buying a pet insurance policy. It’s important to understand what’s covered and what’s not so when your dog or cat does get sick or has an accident you’ll know if you’re covered or not.

Policy Insuring Agreement – The insuring agreement summarizes the major promises of the policy. In summary the insuring agreement is the meat of the policy and describes what’s covered and what is not covered. In the Insuring Agreement the insurance company agrees to do certain things such as paying for covered losses and providing specific services.

Policy Period – The policy period is the period of time the insurance policy is in force. Pet insurance policies have a 12 month policy period beginning on the effective date. It’s important to note that with pet insurance your coverage will not start until after the waiting period is over. However, if you renew your policy in subsequent years there are no more waiting periods. Below is an example of how it all works.

• Effective Date: October 1, 2014
• Policy Period: October 1, 2014 to  September 30, 2015 (12 months)
• Waiting Period Accidents: 1 day from effective date
• Waiting Period Illnesses: 14 days from effective date
• Waiting Period Orthopedic: 6 months from effective date

Pre-Existing Condition – A pre-existing condition is any illness or injury that first occurred or showed signs prior to your policy starting. If your pet has suffered from a specific illness, injury or other health condition prior to enrollment then it will be considered a pre-existing condition and will not be covered by pet insurance. Unfortunately no pet insurance company covers pre-existing conditions, which is why it’s so important to enroll in a plan while your pet is healthy.

Premium – The monthly or annual amount you pay for your pet insurance policy. Premiums are based on factors like your pet’s breed, age, location, and coverage options.

Q

Quote – A pet insurance quote is an estimated premium amount provided by an insurance company for insuring your pet. Quotes are customized based on factors like:

• Your pet’s species (dog, cat, etc), breed, age, gender, and location
• Your desired coverage details – deductible, reimbursement rate, benefits limit
• Add-on options like wellness plans or routine care coverage

Getting a quote lets you preview potential pet insurance costs from different providers before committing to a policy. This allows you to compare pricing between insurers for the same coverage.

Quotes are non-binding – you are not obligated to purchase the quoted policy. However, the final premium may differ slightly after the insurer reviews your pet’s full medical history during underwriting.

Pet insurance quotes can be obtained online through insurer websites or third-party quote portals. You’ll need to provide basic information about your pet to generate customized premium estimates.

Quotes make it easy to shop for the best pet insurance deal. By comparing quotes, you can find the most affordable premium for the coverage that fits your needs.

R

Reimbursement – The payment you receive from the insurer to help cover the vet expenses per your policy. Reimbursement is sent after the claim is processed.

Renewal – Keeping your pet insurance policy active annually, which may involve rate increases as your pet ages.

S

Surgery – Covers medically necessary surgical procedures and aftercare to treat covered conditions.

U

Underwriting – The process an insurance company uses to assess risk and determine premiums when pricing a new policy.

V

Veterinarian – A veterinarian is a licensed professional who practices veterinary medicine. Most veterinarians are involved in general practice and treat animals of all types. Other veterinarians specialize in a specific group of animals such as dog and cat, livestock, zoo animals or equines. A veterinarian may also specialize in specific veterinary disciplines such as oncology, surgery, dermatology or internal medicine.

Veterinary Review – A comprehensive assessment of your pet’s health history. The point of a veterinary review is to determine if your pet has any pre-existing conditions. Pet insurance companies exclude pre-existing conditions from coverage so a veterinary review is a great way to find out what will be covered before it comes time to file a claim. Some companies (Petplan) will perform a veterinary review before you enroll. Other companies (Embrace) will perform a review immediately after you enroll and allow you to cancel your policy if you don’t like the results. In either case you will have to request a veterinary review because it’s not a standard service. The good news is that they are free and provide a very quick turnaround. If your pet has a history of health issues or you’re unsure about a specific health condition then a veterinary review is a good idea. Veterinary reviews are free and provide very little work on your end aside from requesting your pet’s medical records.

W

Waiting Period – The time between enrollment and when coverage takes effect, usually 14-30 days for injury/illness. Can be 6-12 months for cruciate ligament issues.

Wellness Plan – Optional preventive care coverage like vaccines, dental cleanings, microchipping, etc. Not typically included in basic policies.