People ask me about pet insurance all the time. And I honestly don’t always know what to tell them. From my perspective, it’s fantastic: I don’t have to do anything, except maybe fill out a short form, and in return I see more pets getting the care they need.
People who actually have pet insurance, however, tell different stories. Some companies rival human insurance companies when it comes to red tape navigation; others reimburse pennies on the dollar spent. Still others are actually very good. I asked Laura Bennett, CEO and co-founder of Embrace Pet Insurance (one I recommend regularly, by the way) to give a bit more informed perspective about the pet insurance industry:
If you’d asked me 10 years ago what I knew about pet insurance, I would have snorted my coffee through my nose and said “is that like alien abduction insurance?!”
Times have changed since then! Now there are over 12 companies offering pet insurance in the US with all manner of products and service. The question I get now is what should one look for in a pet insurance company and their products; a much more interesting question to answer.
So, to help you answer that question, here are my top 5 pointers on choosing a pet insurance company and its policies:
- What does the policy cover?
No pet insurer covers something that’s already shown symptoms before you buy your policy so that one is easy to answer. But what about hereditary conditions (many purebred dogs get these and they can be darn expensive), ongoing chronic conditions (some insurers stop coverage when you renew), and wellness care (it may be something you want included or not)? These can make or break a pet insurance policy when you come to a claim for one of these conditions.
- How does the pet insurance pay its claims?
With a check – ha ha ha! (sorry, couldn’t help myself there)
Actually, this is more about what does the insurer base the claim payout on. For example, it could be a benefit schedule (a list by diagnosis), “usual, customary, and reasonable (UCR) charges” (a list by procedure that varies by region) or the vet bill you actually paid. There’s no right or wrong answer because a policy with a benefit schedule or UCR payouts often have lower premiums since their payouts are lower than if the payout is based on the bill you paid. But you should know what to expect come claim time to avoid disappointment.
- How will your premiums and benefits change over time?
Your premiums may go up as your pet ages, with veterinarian inflation (currently about 5% a year but until recently, it was 7%), or with the insurer’s overall book of business changes. In addition, coverage may be automatically reduce over time to offset increasing costs. Be sure to read the fine print and ask a lot of questions on this one – no insurer guarantees their current premium or benefit levels. If they say so, get them to write it down for you.
- What do existing customers think of their experience?
Every pet insurer is going to tell you its products and service are the best – of course they are! What you really want to know is what their customers really say. The most popular review website is Pet Insurance Review. Don’t focus on the actual scores the companies are getting. After all, the pet insurer could just be asking the people who got large payouts to go review them on the site and skew the result. I’d focus on the negative reviews; every pet insurer has them. What are the themes of the complaints? How are people treated? Is the complaint about something very specific to that person or common among other complainants? The answers to those questions will help you get a flavor of what you can expect as a policyholder of that company.
- How financially sound is the insurance company behind the pet insurance product?
Features and service are great but if the company isn’t around in 10 years just when you need your policy, then it’s a moot point what you bought. Ask who is underwriting the insurance and what their AM Best rating is. There is no guarantee that a highly rated company will be around in 10 years but it is more likely than a lower rated company.
I could go on but that covers the main points to get you started on your research to find the best pet insurance policy for you.
Laura Bennett is the CEO & Co-Founder of Embrace Pet Insurance and currently the Chairman of the Board of NAPHIA, the North American Pet Health Insurance Association. She has 3 cats, 2 young daughters and a good humored husband who likes to cook. She is also the first pet health insurance actuary in US and started the first ever blog on pet insurance. In her spare time, she runs slowly (her newest effort to stay healthy), makes pancakes with her girls on the weekends, and dreams up ways to make her house more energy efficient.