Pet Insurance: What it Can and Can’t Do for you
Contributed by Attorney Kristi Street
If you’re thinking about purchasing insurance for your dog, cat, or other pet, you may be interested in knowing what different kinds of plans are out there. A Regulator’s Guide to Pet Insurance, published by the National Association of Insurance Commissioners (NAIC), offers some insight into pet insurance as it exists currently and as it has developed over the years.
Pet insurers usually offer different plan options or tiers, much like human health insurers. The plans also typically describe which veterinarians and clinics may be used, policy limits, copayments, deductibles, waiting periods, policy exclusions, a schedule or plan for recovery of benefits, and nondiscretionary arbitration provisions (requiring that a pet owner pursue arbitration rather than lawsuit for personal or economic injuries).
There are two primary coverage types for pet insurance. The first is “accident only,” which protects against expenses that might be caused by your pet. “Accident only” insurance may be of particular interest to dog-owning Kentuckians, as KRS 258.235(4) states, “Any owner whose dog is found to have caused damage to a person, livestock, or other property shall be responsible for that damage.” There are also penalties for owners of dogs, cats, and ferrets whose pet bites another person; under KRS 258.990(2), the owner must pay for any damages for personal injuries resulting from the bite.
The second primary coverage type is “accident and illness,” which covers not only accident expenses, but also expenses that might be incurred when your pet becomes sick or gets injured. This can include medical management, diagnosis, treatment, medical advice, office visits, prescription drugs, food, supplements, medical equipment, surgical procedures, physical therapy, and dental procedures. Further optional coverage may be available for preventative treatment or general health and nutrition, such as vaccinations, flea and heartworm medication, wellness exams, blood tests, radiographs, heartworm tests, screens, urinalysis, deworming, microchip, spaying or neutering, dental cleaning, or genetic certification.
But what isn’t covered? The regulator’s guide describes that, often, policies will exclude preexisting conditions, congenital conditions, and hereditary conditions. Some may even exclude conditions that were diagnosed or treated in prior coverage periods, when you renew your plan. Other typical exclusions may include: preventive treatment or wellness care; dental care; vaccinations; flea prevention; spaying or castration; behavioral training/therapy or treatment; procedures, services, or supplements for a condition not covered by the policy; services or procedures not performed or prescribed by a licensed veterinarian; over-the-counter food or supplies; boarding or accommodation; transportation; grooming; membership fees; experimental and/or investigative treatment that is not within the standard of care; diagnosis, treatment, tests, or procedures associated with breeding; etc.
Of particular note in regard to pet insurance are rating variables. Rating variables are different characteristics that may affect the cost of the insurance plan. Such may include your geographic area, deductible, copay, limit, species, pet age, breed, whether you have multiple pets, policy term (i.e., pro rata factor if other than one year), and potential discounts such as group marketing discount, waiting period length (discount for longer periods), renewal discount, claim-free discount, pet gender (i.e., females rated about 5% less than males), spay/neuter discount, wellness plan discount, predictive test discount, exam fee coverage (discount for exclusion), microchip/identification tattoo discount, service or therapy dog discount (or surcharge), military discount, animal health employee discount, shelter adoptee discount, automated clearing house (ACH) payment discount, premium paid-in-full discount (i.e., no installment plan used), and online enrollment/paperless policy administration discount.
Altogether, pet insurance is much like any other branch of insurance. In order to find what’s right for you, you need to shop around and compare different plans. Keep in mind what you want from your plan, what you’re willing to have excluded, and what variables are likely to affect your final cost, and you’re sure to find a plan that fits your goals.