Excluding the cost of feeding, the single largest expense that dog owners encounter every year is typically veterinary care. We love our dogs and want to keep them healthy, of course. Depending on where you live, the cost of doing so, on average, can be about $300. And that’s just for routine exams and vaccinations. If your pet is injured or falls ill with a serious disease, costs can easily skyrocket into the five-figure range. That’s why we encourage anyone thinking of sharing their life with a dog to crunch the numbers—to be sure that pet ownership is within their means. You may also want to consider taking out a pet insurance policy on your four-legged companion. Pet insurance can help make providing your dog with excellent health care—which can sometimes mean the difference between life and death—more predictable and affordable. So let’s take a look at how pet insurance works.

Things You Probably Know About Pet Insurance

Pet insurance resembles human health insurance, auto insurance, and other types of coverage we routinely pay for. So chances are, you already know quite a bit about it. You pay premiums for pet insurance, either monthly or annually. There’s a process to making a claim and, when you do, you may be responsible for satisfying a deductible, as well. Here’s another parallel between human health insurance and pet insurance: pet insurance policies have coverage limits—the maximum amount an insurer will pay for certain services or over a period of time. Higher coverage limits come at an additional expense. Sounds pretty familiar so far, right?

But pet insurance policies typically offer clients more choices than their human equivalent. And the devil is in the dogtails. So let’s take a look at some of the ways you can customize a pet insurance policy to suit your dog’s needs and your budget.

Choosing What’s Covered

Unlike human health insurance policies, which treat health care needs that arise from different circumstances the same way, many pet insurers offer you a choice of what’s covered under your policy. Some policies cover treatment needs that stem from accidents only. Others offer exclusive coverage for illness-related veterinary care. And some companies offer combination plans that cover your dog’s health care costs regardless of why he or she needs care. If it’s within your budget, a combination plan will protect your pet more fully and give you the greatest peace of mind, as well. 

Wondering what kinds of expenses are covered under most policies? The list is surprisingly comprehensive:
Hereditary conditions

• Congenital conditions

• Chronic conditions

• Cancer treatment

• Diagnostic procedures including x-rays, ultrasounds, and blood tests

• Surgery

• Hospitalization

• Emergency care

• Specialist care

• Prescription Medicines

• Alternative care

Choosing Your Deductible

Most pet insurers offer a choice multiple, customizable plans. That’s another way they differ from human health insurance companies. Nowadays, nearly every pet insurance company operates online. When you visit one of their websites, you’ll have the opportunity to get a no-obligation quote, based on certain parameters you elect. That’s pretty handy because it allows you to compare the cost of several different plans quickly and easily in one place. One of the first choices you’ll be asked to make is how much you wish to pay as your annual deductible. Choosing a higher deductible will result in lower monthly premiums. For most dog owners, it makes sense to choose a deductible equal to the amount of money you can comfortably pay in any given year. Deductibles typically range between $250 and $1000, but some companies offer higher and lower options.  

Choosing Your Coverage Limits

Pet insurance coverage limits can be confusing. When comparing plans, it’s essential to review how each insurance company structures its coverage limits. Most policies will have an absolute limit: the maximum amount it will pay for veterinary care under any circumstances for as long as your dog may live. Plans that impose no lifetime limit on coverage are more rare, but they’re out there. These plans come with a higher price tag, of course, but offer the greatest protection. 

Coverage limits may take different forms. Some policies dictate annual coverage limits—the maximum amount they will pay out in a single year. Others may impose a per-condition limit. Per condition limits can be problematic if your pet suffers from a chronic illness. Some policies impose both annual and per-condition limits. When comparing pet insurance policies, pay close attention to the differences in their coverage limits to get an accurate assessment of which plan offers the greatest value.  
Choose Your Reimbursement Level

Most pet insurance companies offer pet owners the opportunity to elect the amount of money they’ll receive for each claim. Reimbursement levels are expressed as a percentage of each vet bill your receive—usually 70%, 80%, or 90% of your total bill. The lower the reimbursement level you choose, the lower your premiums will be. Choosing a lower reimbursement level is a good way to reduce your monthly expenses and for smaller vet bills, you may not feel much of a bite when you choose a lower reimbursement level. But keep in mind that if you’re pet requires surgery, becomes critically ill, or suffers from a chronic illness, the money you save by choosing a lower reimbursement level may leave you responsible for a considerably greater costs in the end. Once again, it makes sense to choose the highest reimbursement level and premium you can comfortably afford to pay for.  

Routine Veterinary Care Coverage

At a minimum, every dog should have an annual veterinary examination. The cost of that exam will vary, depending on whether Fido is up to date with his vaccinations, for example, and which tests your vet may choose to perform. Human health insurance companies cover wellness exams and encourage subscribers to have them because they know that, ultimately, preventive care reduces the probability of serious illness down the road. But that’s not the case with most pet insurance policies. Preventive care coverage is typically an option you can choose to add on to your basic policy. The cost of wellness coverage varies from insurer to insurer from as little as $10 per month to as much as $30 per month. Wellness coverage usually comes with its own total coverage limit and per-service limits as well. 

Is wellness care worth the extra expense? To find out, multiply the monthly cost of wellness care by 12. Then compare that to how much you spent on routine visits last year. If you don’t remember, you can contact your vet and request a copy of your bill. Which figure is higher? That’s one way to assess whether wellness care is a good value for you. Also be sure you understand exactly which wellness services are covered under any policy you’re considering. Plans may or may not include the cost of neutering your dog or routine dental care, for example.

Surprising Facts About Pet Insurance

• More and more employers recognize that pets are beloved members of their employees’ families. Many are now offering pet insurance as an employee benefit. Check to see if your employer is one of them.

• Nearly all pet insurance plans allow you to choose your own veterinarian. You don’t have to worry about paying more for choosing an out-of-network vet because pet insurance companies don’t have networks. In addition, many pet insurance companies will pay your vet directly and often immediately. That saves you the time of having to file a claim for every service your dog receives.

• Do you own more than one pet? Pet insurance companies usually offer a discount of about 15% when you insure more than one pet.

• Pet insurance companies offer a wide range of other discounts. Veterinary workers, active military personnel, and members of such organizations as AARP and AAA may all qualify.

• Sadly, some pet insurers put an upper age limit on insurability. They may decline to issue a policy on a senior dog or, when your faithful companion reaches a certain age, refuse to renew his coverage. So choose your plan carefully. You want it to be there when your dog is likely to need it most.

How Much Are Pet Owners Willing to Spend on Veterinary Care?

The short answer is  a lot. A recent survey of pet owners conducted by Money.com found that 82% of respondents would pay any amount of money they could afford to deliver life-saving care. And 67% said they’d spend any amount of money period. That’s a lot of love. Pet insurance is one way dog owners can be sure they’re able to support their pets in times of crisis. And many feel pet insurance pays for itself in pure peace of mind.  

Author Bio:

Susan Doktor is a journalist, golden retriever enthusiast, and principal at Branddoktor. She writes on a wide range of topics including pets, family life, and personal finance. Follow her on Twitter @branddoktor.