The cost of pet ownership is rising faster than most dog and cat lovers are aware of. Studies from organizations including the UK-based People’s Dispensary for Sick Animals (PDSA) suggest that prospective pet buyers dramatically underestimate what they’ll spend on pet care. PDSA found that a lifetime of pet ownership costs seven times more than most survey respondents predicted.

According to the American Pet Products Association, spending on pets topped $100 billion in 2020. That eye-catching figure doesn’t take medical expenses into account, which can also easily take owners by surprise. Pet parents can get help managing some of these emergency and routine expenses by enrolling their pets in pet insurance policies.

Comparing Plans: What to Ask

There are plenty of pet insurance providers, but finding the ideal fit can overwhelm new pet owners who are exploring the market for the first time. Even veteran pet parents can find it challenging to separate world-class providers from the pack. Start the evaluation process with these three essential questions.

What’s Covered?

The pet insurance industry is growing and that means your menu of policy options is growing too. Just about every provider offers several types of policies:

• Accident coverage: Typically, the least expensive plans available will only cover expenses associated with accidents. These are sometimes the best (or only) option for pet parents on limited budgets or those who are hoping to enroll older pets.
• Accident and illness coverage: Slightly more comprehensive plans may cover expenses related to both chronic and acute ailments as well. Keep in mind that pre-existing conditions are almost never covered. That means you won’t be reimbursed for treating or managing illnesses that appear before your pet’s policy goes into effect.
• Wellness and preventive coverage: Pet insurance policies aren’t just helpful in the event of medical mishaps. Some companies offer plans covering the routine and one-time expenses that help pets thrive. Your wellness coverage may help you pay for microchipping, spaying or neutering, pest prevention, annual wellness exams, vaccinations, and other fees.
• Additional coverage: Does your pet have behavioral issues? Would you like to explore alternative therapies like acupuncture or massage? Is your dog’s breed prone to heritable health conditions? Depending on the provider you choose (and how much you’re willing to spend), you may be able to find policies covering a range of additional expenses. You could save considerably over your pet’s lifetime if, for example, you select a plan that covers heritable conditions like diabetes.

Make sure to select a provider who’ll make it easy to customize your coverage and build a policy that suits both your pet’s needs and pet care budget.

What’s Not Covered?

Determining what a provider won’t cover is just as important as determining what they will cover. Pay particular attention to each provider’s definition of “pre-existing conditions” and the particular way these conditions may affect your pet’s eligibility for coverage.

How Much Will I Pay?

You can’t evaluate pet insurance plans effectively unless your familiar with the relevant terminology:

• Premiums: The flat fee you’ll pay each month to keep your pet’s plan active.
• Deductible: The amount you must spend before your pet’s coverage kicks in and the insurance company begins to reimburse you for eligible fees.
• Coinsurance: The portion of eligible expenses that you are responsible for covering as the policyholder. The portion covered by your pet’s insurance provider may be referred to as your “reimbursement amount.”
• Incident limit: The maximum amount of money a policyholder can be reimbursed for a single incident. Not all providers apply incident limits and incident limits may vary from policy to policy and pet to pet.
• Annual limit: The maximum amount of money a policyholder can be reimbursed within a single year. Annual limits will vary depending on the provider, plan, and pet.

You know your pet and your pet care budget better than anyone. While an insurance agent or veterinarian can offer guidance, you’ll need to determine for yourself how much you’re comfortable paying.