There are so many different types of insurance to purchase. Life insurance, auto insurance, home insurance, renter insurance, health insurance – the list goes on. And to complicate matters, many of the different types of insurance work in different ways. For example, health insurance usually covers preventive care, such as annual physical complaints. On the other hand, auto insurance doesn’t cover preventative maintenance like oil changes or tire changes – it only covers you if you have an accident.

In honor of National Puppy Day on March 23, we’re going to take a look at a form of insurance coverage you might be thinking about: pet insurance. We’ll explore what pet insurance is, how it works, and when it makes sense to help you decide if it’s right for you.

What is pet insurance?

As the name suggests, pet insurance is a type of health insurance policy that covers certain eligible pet expenses. In most cases you pay a monthly premium and you pay the procedure yourself in advance. Then you can submit a claim to the pet insurer for reimbursement. In many cases, there is a deductible that you must meet before you are reimbursed.

While many policies have some of the same similarities, each policy is different. As with most other types of insurance policies, it is important to read the policy itself and understand what is and is not covered before using it. That way, you won’t get into financial trouble, especially during an emotional time when your pet needs major medical care.

How does pet insurance work?

Each pet insurance policy may be slightly different, but most pet insurance policies work in a similar way. Most pet insurance companies will require your pet to be checked before the policy is issued – this is to avoid purchasing pet insurance for a pet that is already sick. After you sign up, there is generally a wait before coverage begins.

Once your policy is approved, you pay a monthly premium based on animal type, breed, age, location and overall health. When you want to use your pet insurance, you usually pay the provider first. This is in contrast to health insurance, where you often show your insurance card for the service and may not pay anything out of pocket, or only a small out-of-pocket fee. With most policies, you pay the full amount and then submit the expenses for reimbursement.

In most cases you will first have to meet an annual deductible. The exact amount of the deductible varies by policy, but often ranges from $0 to $1000 per year. After you have paid your deductible, the insurance company will pay out a certain amount of

Let’s say you buy pet insurance that has a $500 deductible, covers 50% of the cost after the deductible, and has an annual cap of $7,500. If your pet has a medical emergency that costs $9000, then you would pay the $9000 bill out of pocket first. The insurer will then reimburse you as follows:

You pay the first $500 (your deductible) The insurance company then pays 50% of the next $7,000 (up to the annual maximum of $7500) You are responsible for anything above the annual maximum of $7,500

In this scenario, the insurance company will reimburse you $3,500 (50% of $7,000).

Is Pet Insurance Worth It?

While most pet insurance policies cover cats and dogs, there are policies that cover all types of pets. In general, higher deductibles, lower funding ratios and lower annual maximum amounts will translate into lower monthly premiums. If you want a policy with a lower deductible, a higher reimbursement percentage and a higher annual maximum, you must be prepared to pay a higher monthly premium. You can mix and match any of these three items to find a combination of premium amount and benefits that works best for your situation.

One way to decide is to consider both the standard scenario and the worst case scenario. A standard case would be that your pet has no serious illnesses. A worst-case scenario could be illness or surgery of $10,000 or more. How would your finances be affected by any of these scenarios? Mint can help you with historical breakdowns of how much you’ve spent on vet and other pet-related bills. This can help you make a decision about what’s best for you.

It comes down to

No one plans to get sick, and that includes animals. Whether or not pet insurance is worth it for you depends on your overall financial situation. If you have a comfortable emergency fund, you may feel comfortable skipping pet insurance and planning to pay for pet medical emergencies from your savings. If a high medical bill is out of your budget, consider protecting your finances with pet insurance.

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Dan Miller (99 posts)

Dan Miller is a freelance writer and founder of, a site that helps families travel for free/cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.


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