When most people ask about pet insurance, their primary focus is often on the premium – how much is it going to cost. In fact, one of the most frequently used search phrases in Google is “cheap pet insurance.” Whole websites have been built around this keyword phrase.
The old axiom, “you get what you pay for,” certainly rings true for purchasing pet insurance. No pet insurance policy that offers broad coverage is “cheap.” Yet, adequate coverage for a reasonable premium is possible provided you do your homework.
There are basically 3 types of coverage:
- Accident-only policies – the least expensive
- Accident and illness policies
- Accident and illness policies with wellness care benefits
There is no wrong coverage when purchasing pet insurance, but you must realize what you are purchasing – what is covered and not covered. For broad coverage, I recommend pet owners purchase accident and illness coverage. I generally don’t recommend purchasing a policy with wellness care benefits because it can significantly increase the cost. Pet insurance is for random, unexpected significant expenses that you would have trouble paying for out-of-pocket. Wellness care expenses are usually neither random nor unexpected. You generally know when your pet is due wellness exams, vaccinations, etc. and you are already paying for these services out-of-pocket.
When comparing quotes from several companies, you must look at the coverage each company offers for that premium. This isn’t easy to do because it is unlikely that you’ll find two policies alike in what they cover. You’ll want to look at not only what they cover, but also the limits of the coverage. For example, all the companies offer coverage for chronic conditions, but limits on coverage will vary from company to company. Some cover it in their base policy while others offer it as an add-on rider for an additional premium.
The 3 factors that most influence the premium are the policy maximums, the deductible and the coinsurance percentage (copay). Here again, it is unlikely to find two companies with all these factors identical.
The bottom line is that there are many more factors to consider than just the premium when comparing pet insurance companies with one another. If the premium is your primary focus, you are likely to make an unwise choice of company and premium for your pet. The goal is to select a policy that will give you the least out-of-pocket expense including the premium should you have to file a large claim (e.g. $5,000). In order to do this, you’ll have to consider all the factors discussed in this article.