What Does Pet Insurance Mean?

It’s more like property insurance than health insurance

According to the 2019-2020 National Survey of American Pet Owners (APPA), 67% of American households own a pet, which is equivalent to nearly 85 million households. These families spent a total of $ 95.7 million in 2019, and this figure is expected to increase to $ 99.0 million in 2020. Veterinary care was the third-largest category of spending by pet owners in 2019, at $ 29.3 billion. . Grow to $ 30.2 billion in 2020.

Americans note the high cost of veterinary care. More than 2.5 million pets were covered by a pet insurance policy in 2019 in the United States, at a combined cost of $ 1.56 billion. It’s a relatively new industry: pet insurance wasn’t a formal option until the famous dog Lacey received a pet insurance policy for the first time in 1982. However, according to Rick Faucher, president of the North American Health Insurance Association for Pets (NAPHIA), Since 2014 “Our industry has seen double increases, with an average annual growth rate in the United States of 22.6% … All indicators point to continued growth in our sector even in 2020, despite some COVID-related challenges that remain our market. He confronts them and others. ”

Finding the best pet insurance largely depends on your pet’s situation and the type of coverage you are looking for. Despite its growing popularity, only 20 companies offer pet insurance in North America in 2020, and 97% of them are members of NAPIA. 2 This is what you need to know.

The main concerns

Pet insurance works more like property insurance than medical insurance.
Unlike medical insurance, the policyholder must pay for their pet’s medical care costs directly and then be reimbursed by the insurance provider.
Pet insurance does not cover pre-existing conditions.
Pet insurance generally only offers financial rewards in the event of serious health accidents that result in costly veterinary bills.

Benefits of pet insurance

You love your pet like a family member, but the insurance industry sees Fido or Fluffy as more than just possessions. This is why pet insurance is more like property insurance than health insurance. However, before you remind someone that their pet is not a real piece, understand that this designation works to their advantage. Reading and understanding the policy is a piece of cake compared to health insurance policies written for humans. Consider these benefits:

Choosing a vet – As long as the vet is licensed, pet insurance companies won’t tell you who you can see and who you can’t. There are no out-of-network doctors like the ones that may be dictated by your health insurance policy.
Simple Policies – Most companies only have three tiers to choose from. There is only accident or basic coverage; Accident and illness, or universal coverage; And health coverage, which is for preventive measures 4
Cheap Insurance Premiums – Insurance costs vary by coverage and policy, but generally, wellness coverage costs $ 20 to $ 25 per month, accident coverage only covers $ 11 (for cats) and $ 16 (for dogs) per month, average accident and illness coverage $ 29 (for cats) and $ 49 (for dogs) per month.5 6 Of course, the cost depends on a variety of variables, including the breed and age of the dog. animal, where you live and the options you make as part of your policy.

If you understand the word insurance, you can get information about a pet insurance policy. You will pay a monthly or annual fee, you must pay a deductible amount (a certain amount before the policy takes effect), and you may have a copayment. Discounted amounts can range from $ 0 to $ 1,000 and copayments range from 10% to 30% of the cost.

There is a big difference compared to many human health policies. The first person who pays is you, not the insurance company. In other words, as the sign in some doctor’s offices says, “Payment is due at time of service.” After paying, file a complaint with your pet insurance company and wait for the check.

Is there insurance for pets?

If you have an unconventional pet, your choice of insurance companies may be just one or two. In fact, dogs accounted for 82% of all policies in the U.S. in 2020, while cats accounted for the remaining 18%, according to a survey by PawlicyAdvisor.com.8 If you have a bird, iguana, or another type for pet, check out From Nationwide Pet Insurance, which is perhaps the largest and most well-known provider of exotic pet insurance

What to see

First, if your pet has pre-existing conditions, your policy will not cover them.10 If your pet has abdominal pain, for example, some companies may try to restrict coverage to any condition that includes abdominal pain as a symptom. Before saying yes to your pet insurance policy, talk to the company and ask them to explain how they decide what constitutes a pre-existing condition. Having something harmless in your pet’s medical records can become a big problem if you file a claim later. On a related note, you may need to have your pet checked by a vet before getting coverage if a vet hasn’t seen her in over a year.

Then comes the waiting period. You can’t get pet insurance when you know your pet requires an expensive procedure. Insurance companies know this trick. That is why they establish wait times, which vary by state, but will generally be 24 to 48 hours for accidents and 14 days for illness to a year for certain medical conditions, depending on the type.

Ask for maximum payments. These can include limits for each incident, year or life of the policy. In general, higher-end policies have the highest payouts.

Finally, most policies will increase your premium to take into account the increased costs and the condition and age of your pet. However, some companies do not. Ask about the price increase before signing the policy.

Is Pet Insurance Worth The Cost?

According to one of the most prestigious consumer magazines, the answer depends on it. In 2105, Consumer Reports analyzed the policies of three major insurers in the pet insurance industry: Embrace, Healthy Paws, and Trupanion, and compared them to the age of vet bills by Guinness, a 12-year-old Labrador mix from the county. from Westchester, New York and Freddy. , A nine-year-old mixed-breed cat from Fairfield County, Connecticut The magazine found that for Freddie, who was otherwise healthy, just one policy would have paid more than the cost of medical care. However, for Guinness, who was diagnosed with melanoma, all three plans paid off.

The informational website ConsumerAdvocate.org found in 2017 that medical insurance for pets is not worth the cost. According to the report, the cost of routine care is usually minimal, especially early in a pet’s life, and the annual cost of insurance is more or less than what you can expect to pay directly to a vet.

Remember, pet insurance, or any insurance for that matter is not designed to make a profit (unlike the insurance company). You buy insurance to protect against catastrophes and you should not expect to make money.

The bottom line

When something really bad happens, the insurance is worth the years of premiums you paid. For relatively minor or routine problems, it’s best to put a monthly fee into an emergency cat or dog fund to pay for those unexpected bills. If you decide to purchase catastrophic care pet insurance, get the highest discount rate you can comfortably afford.

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