The purpose of pet insurance is to mitigate the risk of incurring significant expense to treat ill or injured pets. As veterinary medicine is increasingly employing expensive medical techniques and drugs, and owners have higher expectations for their pets' health care and standard of living than previously, the market for pet insurance has increased.
How policies work
Many pet owners believe pet insurance is a variation of human health insurance; however, pet insurance is actually a form of property insurance. As such, pet insurance reimburses the owner after the pet has received care and the owner submits a claim to the insurance company.
UK Policies usually pay 100% of vets fees. Policies in the USA usually offer to pay 80-90%[citation needed] of the costs minus a deductible depending on the company and the specific policy. The owner will usually pay the amount due to the Vet, and then send in the claim form and receive reimbursement, which some companies and policies limit according to their own schedule of necessary and usual charges. In the event of a very high bill, some veterinarians will allow the owner to put off payment until the insurance claim is processed. Some insurers pay veterinarians directly on behalf of customers. Most U.S. policies require the pet owner to submit a request for fees incurred.[citation needed]
Traditionally, most pet insurance plans did not pay for preventative care (such as vaccinations) or elective procedures (such as neutering). Recently however, some companies in the UK and US are offering routine care coverage, or some times called comprehensive coverage.
In addition, companies often limit coverage for pre-existing conditions in order to eliminate fraudulent consumers, thus giving owners an incentive to insure even very young animals who are not expected to incur high veterinary costs while they are still healthy.
Some insurers offer options not directly related to pet health, including covering boarding costs for animals whose owners are hospitalized, or costs (such as rewards or posters) associated with retrieving lost animals. Some policies also include travel cancellation coverage if owners must remain with pets who need urgent treatment or are dying.
Some UK policies for dogs also include third party liability insurance. Thus, for example, if a dog causes a car accident that damages a vehicle, the insurer will pay to rectify the damage for which the owner is responsible under the Animals Act 1971.
Glossary
- 'Benefit schedule' – a document created by a pet insurance company that lists allowances paid for a given diagnosis and treatment.
- 'Deductible' - an amount that must be paid by the policy holder in a pet insurance policy for covered veterinary services. Higher deductibles usually translate to lower policy premiums.
- 'Exclusion' - a condition that is excluded, or not covered under a pet insurance policy.
- 'Policy Limits' - there can be several types of policy limits applied to a pet insurance policy. When a policy limit is reached the policy will normally no longer pay applicable claims. Typical policy limits are lifetime, annual and per-incident.
- 'Pre-certification' – when a pet owner to submits a requested treatment to their pet insurance company to see if the treatment will be covered, and at what benefit level.
- 'Pre-existing condition' - an injury or illness that occurred before the pet insurance policy became effective. Some pre-existing conditions are eligible for coverage after being cured and a specified period of time elapses. Other conditions cannot ever be covered regardless of time elapsed.
- 'Coinsurance' - the percentage of your claim for which you are liable before any applicable deductible is applied.
