How to compare pet health insurance

How to Compare Pet Insurance Why are monthly premium prices so noticeably different?

I see low coverage plans for around $10 per month, going all the way up to $30 per month. High coverage plans range from around $35 per month all the way to $80 or more. What gives?

ANSWER: Pet insurance premiums vary widely for two main reasons. The first is because they’re based on specific factors related to each individual pet and policy. The second is related to the small details and variations contained in each and every policy.

Individual Pet and Policy Options Individual pet and policy options play a role in the cost of the premium. They include things like: • • • • • •

Age, type and breed of pet Reimbursement levels How you’re reimbursed, whether according to a set schedule or on the actual vet bill Amount of your deductible Where you live Type and level of coverage

But even if you get pet insurance quotes for the same pet in the same location with the same deductible and reimbursement options from different companies, you may get wildly different premiums. Here’s where the small details can make a huge difference in the prices across the board, as you already saw from the premiums listed in the comparison chart.

Examples of Small Details Let’s say you’re looking at pet insurance plans from two different companies. Both are set at a $100 deductible and a 90 percent reimbursement rate. Both cover accidents, illnesses and some hereditary conditions. But the prices are still massively different.

Here’s where you examine the smaller details to see where the difference lies. For instance, perhaps both plans cover accidents, illnesses and hereditary conditions, but: • • • • • • • • • • •

One plan has an annual deductible and the other has a per-condition deductible One plan covers many more hereditary conditions than the other One plan has bilateral exclusions for certain conditions, meaning the plan will cover the condition only once even if it occurs on both sides of the body One plan covers vet exam fees while the other does not One plan applies your reimbursements before the deductible which makes your out-of-pocket expenses higher than the other plan that applies your reimbursements after the deductible One plan includes prescription medications in the base policy while the other requires a rider for prescription coverage One plan covers prescription food and vet supplements while the other does not One plan offers reimbursement of boarding and kennel fees while the other does not One plan covers many more alternative treatment options than the other One plan covers prosthetics and mobility devices and the other does not You get the idea…

Exclusions Each pet insurance plan also comes with specific exclusions that affect the overall cost of coverage. Plans with an extensive list of exclusions are likely to cost less than those with few exclusions, simply because the plan will not be covering items outlined on that extensive list.

A good strategy is to not only look at what each plan covers, but to also examine what it doesn’t cover. You can do this by reviewing a sample policy of each plan before you enroll.

Pet Insurance Terms You Need to Know

Just like any type of insurance, the world of pet insurance is peppered with all kinds of jargon and specific terms that can be confusing. If you’re feeling stuck, try going back to the basics. If you’re ready to build on what you’ve learned already, here is a rundown on some of the most common terms and what they mean.

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Annual limits: Maximum amount of money you can be reimbursed every year. Some pet insurance policies have them; others don’t.

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Benefit schedule: A rundown on the amount of reimbursement you’ll get for specific conditions or treatments. Some pet insurance companies reimburse you according to a set benefit schedule instead of covering a percentage of the actual vet bill.

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Co-pay: Percentage of the vet bill you pay out-of-pocket. If you have a 90 percent reimbursement level, your co-pay is 10 percent of the vet bill.

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Congenital conditions: Health conditions your pet is born with. They can be hereditary, or passed down genetically. They can also result from abnormal development before birth. Not all pet insurance plans cover congenital conditions. Not all congenital conditions are immediately apparent and may show signs some time after birth.

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Deductible: Amount of money you pay out-of-pocket before your pet insurance coverage kicks in.

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Exclusions: List of conditions or limitations on your coverage. Read them carefully, as they vary widely from policy to policy.

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Hereditary conditions: Disorders or diseases your pet inherits genetically, often referred to as breed-specific conditions since they tend to affect certain breeds of dogs and cats. Not all pet insurance plans cover hereditary conditions.

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Incidents: “Incident” refers to the specific condition for which your pet is being treated. “Per incident” and “per condition” mean the same thing.

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Lifetime limits: Maximum amount of money you can be reimbursed over the lifetime of your pet insurance policy.

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Reimbursement level: Percentage of the vet bill the pet insurance company reimburses you after you pay your deductible. The reimbursement level determines your co-pay. If you have a 70 percent reimbursement level, your co-pay is 30 percent of the vet bill.

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Rider: Also called “endorsements,” riders are add-ons to an insurance policy that provide additional coverage at an additional cost. Different companies may offer different riders, such as a prescription medication rider, complimentary care rider, or breeding rider for pregnancy care.

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Pre-existing conditions: Health issues that your pet has already been diagnosed with or shown signs of before your pet insurance plan becomes active. Pre-existing conditions are not covered by any pet insurance plan.

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Waiting period: Set amount of time you’re required to wait after enrollment before your pet insurance policy becomes active. Pet insurance policies may have different waiting times for different conditions and coverage options. The waiting period for injuries and accidents may be as short as a day or two while other conditions may have a waiting period of several months.

Pet Insurance: Tricky True or False Some pet insurance options can be a little tricky, with options that look fabulous at a glance not always necessarily being all that fabulous for your particular situation. Check out a few tricky options we’ve run across during our insurance research — or if you're ready, start reviewing plans.

A plan with no annual deductible is automatically a great thing.

FALSE - A pet insurance plan with NO deductible whatsoever might automatically be a great thing, but most plans have some type of deductible. If a plan doesn’t have an annual deductible, it typically means it has a per-condition deductible. That means you’ll have to pay a deductible for every condition for which your pet is treated.

A per-condition deductible is not necessarily a bad thing, either, but it’s important to know the type of deductible your plan has so you know what to expect.

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Annual deductible: You pay a single deductible per year, regardless of how many vet visits or conditions are treated each year.

Per-condition/per-incident deductible: You pay a deductible for every different condition, or incident, treated. If you need treatment for three different conditions over the course of a single year, for instance, you’ll have to pay three deductibles that year. However, if you go to the vet five times over a two-year period for the same condition, you only have to pay a single deductible for that single condition.

Reimbursement levels and co-pays are two ways of looking at the same concept.

TRUE - Both refer to the amount of money the pet insurance company gives you back vs. the amount of money you pay out-of-pocket (after the deductible). For instance: • • •

If your reimbursement level is 90 percent, you have a 10 percent co-pay If your reimbursement level is 80 percent, you have a 20 percent co-pay If your reimbursement level is 70 percent, you have a 30 percent co-pay

A pet insurance plan with a 90 or 100 percent reimbursement level is always the best choice.

FALSE – While the highest reimbursement levels may be the best choice for getting the greatest amount of money back on your vet bill, it’s not necessarily the best choice for keeping your premiums low.

The higher your reimbursement level, the higher your premiums will be. If you can afford to pay for the higher level of reimbursements, go for it. But if you need to trim down your monthly premium, lowering your reimbursement level is one way to do it.

Wellness coverage is an absolute must, no matter what.

FALSE – If wellness coverage were a life-or-death matter, it’s likely every pet insurance plan would offer it as an option. You’ll notice in our comparison chart that some plans don’t. Companies that don’t offer wellness coverage generally leave it out to keep premiums lower.

Wellness coverage can definitely be beneficial, especially for new puppies and kittens that can benefit from having their extra vaccinations and spaying or neutering covered by it during their first year.

Most adult pet’s routine wellness care tends to stay the same year after year, making it possible to budget for their annual vet visits and vaccinations without insurance. It’s the unexpected emergencies and illnesses that can more easily blow your budget or leave you in debt.

We’re not saying wellness coverage is not worth it, as it certainly can be, but it may not be at the top of priority list when choosing a policy.

Tips for Keeping Pet Insurance Premiums Low Keeping your premiums low doesn’t have to mean skimping on coverage. You can still go for a plan that offers solid coverage that meets your needs with a few key strategies for reducing your premiums.

Choose a higher deductible: The higher your deductible, the lower your premium. Your monthly premium will be lower if you pick, say, a $500 deductible instead of a $100 deductible on your plan of choice.

Choose a lower reimbursement level: The lower your reimbursement level, the lower your premium.

Your monthly premium will be lower if you opt for 70 percent reimbursement and a 30 percent co-pay than it would if you went for a 90 percent reimbursement and a 10 percent co-pay.

Look for discounts: Certain pet insurance companies offer discounts for any number of different reasons.

These can include: • • • • • •

Ensuring multiple pets Enrolling online Paying annually instead of monthly Being a member of an organization, such as AAA Being a member of the military Pets that are spayed, neutered or microchipped

Cut out unnecessary extras: If you’re never planning on breeding your pet, paying more for an insurance plan that includes pregnancy care may not make sense. The same holds true for various riders or extended coverage options that may sound good in theory but may contain a bunch of extras you are unlikely to use.

Comparison shop: Your main aim is not necessarily to find the lowest premium across the board, but the lowest premium for a good value on the insurance coverage you need. Decide on the type and level of coverage you need and then compare prices from at least three different companies for that targeted coverage.

Shopping Around Comparison shopping is one of the prime ways to ensure you’re getting the top value for your money, and at Pet Insurance U we’ve given you plenty of resources and tools to make it as easy as possible. Browse through our comparison chart, check out our reviews of the top 6 pet insurance companies, and take advantage of all our pet insurance information to ensure you enroll in a plan that’s best for you and your pet.