Pet insurance explained

Pet insurance is a lot like health insurance for people. A policy has exclusions, levels of coverage, a deductible and limits on what it pays. Some companies offer several levels to choose from, and others sell a single plan for everyone. Policies are usually written by the type of pet.

The three kinds of coverage

• Accident only covers injuries from accidents.
• Accident and illness adds illnesses to accidents.
• Wellness covers routine care.

Each level covers and excludes specific services, and the price differs between them.

What's usually left out

Most pet insurance companies exclude pre-existing conditions, along with hereditary and congenital ones a pet was born with or inherited. Some won't take a pet past a certain age. Many have a waiting period before benefits begin, so an illness that starts in the first weeks may not be covered.

How it pays

Most policies pay on a reimbursement basis. You pay the vet, then file a claim and get money back. Companies work that out in one of two ways:

• A benefit schedule pays a set amount for each illness or injury, depending on the coverage level.
• A percentage pays back a share of what you spent.

Some companies let you choose your vet.

What sets the price

The monthly cost depends on the species, breed, sex and age of the pet, where you live, and the coverage and deductible on the policy.

Changing pets or owners

A policy usually can't be moved to a different pet. With the company's written approval, some can be transferred to a new owner along with the pet.

What to find in a policy

• Which level of coverage it is: accident only, accident and illness, or wellness
• Which conditions it excludes, including pre-existing, hereditary and congenital ones
• How long the waiting period is before benefits begin
• Whether there's an age limit for the pet
• Whether you can use your own vet
• The deductible and the limits on what it pays
• Whether it pays by a benefit schedule or a percentage of the bill

An annotated example

What to do next

Find the waiting period and the exclusions in your pet's policy, and check whether it pays back by a benefit schedule or a percentage of the bill.