Pet Insurance Explained: What it Does and How it Works

Pet parents view their pets as beloved family members and companions. That perspective doesn’t change just because their dog or cat is injured or becomes sick. As a caring pet parent, you want the best for your pet, and that includes the best medical treatment, medication and care possible.


Unfortunately, emergency care, surgeries, and even treatment for chronic illnesses can quickly add up to thousands of dollars in veterinary bills. Most unexpected veterinary costs for pets fall between $800 and $1500, and only 39% of Americans have enough money saved to cover a $1000 emergency. That leaves many pet parents in a heartbreaking situation: do you incur significant debt to cover your pet’s veterinary care or forgo treatment altogether?


The good news is that with pet insurance, pet parents never have to face that agonizing decision. Pet insurance helps pet parents like you stay prepared for unexpected emergencies and manage the financial difficulties associated with these circumstances. Here’s what pet insurance is all about, and how it can help you and your pet.


What is pet insurance?

Pet insurance is a healthcare policy you purchase for your pet which covers the cost of medical care and reimburses you for certain expenses and procedures. A pet insurance policy protects pet parents from paying costly medical care fees, or worse, having to choose to euthanize a pet because the veterinary costs are unaffordable. With pet insurance, you can bring your pet to the veterinarian for care without worrying about having enough money to pay the bills.


The majority of pet insurance plans are paid monthly and cost a few hundred dollars yearly. Through paying the premium on the insurance plan, you can have many medical costs reimbursed, with some exceptions such as with pre-existing conditions. Just as with any other type of insurance, the pet parent pays a small portion of the bill, while the insurance company pays the remainder. However, with pet insurance, you do have to pay out of pocket first, file a claim with your insurance company, and receive reimbursement afterwards.


Some pet parents may wonder if paying a few hundred dollars a year on pet insurance is worth it in the long run. Think of it this way: an illness or injury to your pet can cost hundreds to thousands of dollars of treatment, and you may not have the funds to cover unexpected bills at a moment’s notice.


For example, a diagnosis of cancer in a dog runs about $1500, chemotherapy upwards of $5000, and radiation treatment between $2000 and $6000. Research shows that 50% of all dogs will develop cancer after age 10, so it is a reality that you may need to finance cancer treatment for your dog someday. Even emergency hospitalization of a pet can cost $1000 to $3500 a day. A pet insurance policy can help make that financial burden easier to bear while you focus on what is most important: the health and happiness of your pet.

What does pet insurance cover?

Each pet insurance plan has specific coverage depending on what the insurance company offers and the type of plan the pet parent selects. Pet insurance policies do not cover pre-existing conditions; in other words, if your pet was sick before receiving coverage, the medical costs for that illness are not eligible for reimbursement. Some providers do offer coverage for curable pre-existing conditions, but usually require a waiting period to verify that symptoms have not recurred. Other insurance companies offer additional riders you can purchase and add to an existing policy.


So what does pet insurance typically cover? Here is a breakdown of what pet insurance coverage looks li


Covered by Pet Insurance?


Unexpected injury caused by an event not related to an underlying illness or disease.


Most pet insurance policies cover unexpected physical injuries provided the injury was not caused deliberately by the pet parent or household member.

Unexpected acute injury related to a sudden illness requiring medical care.


The majority of pet insurance companies will cover acute, unexpected illnesses, provided they are not pre-existing.

Emergency treatment for an injury or illness that requires immediate care.


Pet insurance policies generally cover emergency care; however, additional costs, such as administrative fees, boarding, and pet transportation, may not be included.

Chronic conditions, which once diagnosed, are determined incurable or lifelong conditions.

Yes, provided the chronic condition is not pre-existing.

Insurance companies have different definitions for pre-existing conditions, which may influence whether a chronic illness qualifies for coverage.

Hereditary (not present at birth) and congenital diseases (present at birth)

Dependent upon the policy.

Some policies will cover hereditary and congenital diseases, but only through additional purchased coverage. Other policies cover these conditions by default, while some other companies will not cover them at all.

Pre-existing conditions, or medical conditions that existed before the pet insurance coverage began.


No pet insurance company covers pre-existing conditions, although some company’s definitions of “pre-existing” may vary.

Breed-specific conditions are health problems or medical conditions found in certain breeds.

Dependent upon the policy.

Some insurance companies will not cover the treatment for breed-specific conditions.

Wellness or health maintenance, including preventative care

Dependent upon the policy.

Many insurance policies do not cover wellness or maintenance plans. Others will do so, but for an additional cost to the policyholder.

How does pet insurance work?

Some pet parents aren’t entirely sure how pet insurance works; while it may seem complicated on the surface, it’s actually an easy, five-step process:


  1. You purchase a pet insurance policy.
  2. You have your pet treated at a veterinarian clinic.
  3. You pay for your pet’s treatment.
  4. You submit a claim to your pet insurance provider.
  5. You get reimbursed by the provider based on the terms of your insurance policy.


To process your claim, your insurance provider may need copies of records from your veterinarian. Once your claim is approved, there is usually a waiting period of 2 - 3 business days to receive reimbursement, longer if you get the reimbursement by mail.


To help you understand some of the insurance terminologies that accompanies pet insurance policies, we’ve included some definitions below:

Deductible: The part of the veterinary bill that you pay, either per incident or annually) before the pet insurance policy’s reimbursement takes effect.


Reimbursement: The percentage of the bill paid by the insurer, after the deductible is paid. For most companies, this percentage ranges from 60% - 90%.

Annual limits: This term means that your coverage is capped at a certain amount. If you meet that yearly limit, you are responsible for paying until your coverage resets for the next year.


Premium: The fee you pay each month to keep your plan active. Higher monthly premiums mean you receive more coverage. For pet parents on a budget, however, low monthly premiums offer excellent amounts of coverage as well.

How much does pet insurance cost?

The cost of pet insurance is dependent on a series of factors, including your pet’s:


  • Species
  • Age
  • Breed
  • Size and weight
  • Location


The length and term of the plan can also dictate how much money a policy will cost, as can the company with whom you purchased the policy. Some providers offer multi-pet discounts should you choose to insure more than one pet.

Where can you use pet insurance?

You can use your pet insurance policy at any licensed veterinarian’s office or clinic in the United States.

Let Pet Insurance Review find the best policy for you.

With so much to consider in a pet insurance policy, where can you begin to find the right plan? Pet Insurance Review can help you find the best policies to meet your pet’s needs and its budget. Get a free, personalized pet insurance quote today, and let us help you ensure a healthier, safer tomorrow for your pet.



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  3. American Veterinary Medical Association. (n.d.). Cancer in Pets. Retrieved from
  4. Brooks, L. (2020). Average Cost of Emergency Vet Visits. Retrieved from


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