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How Does Pet Insurance Work?

This simple way to save money could be right for you and your dog or cat.

C. Tarantino

April 3, 2023

Although there’s no way to dodge vet bills entirely, pet insurance is one way to avoid the heaviest penalties. From how it works to how it can save you thousands of dollars, learn the basics of pet insurance.

What is Pet Insurance?

Much like car, life, or home insurance, pet insurance is a contract between a pet owner and a pet insurance company that’s designed to benefit both parties.

When you sign up for a pet insurance policy, you’re agreeing to pay your pet insurance provider a monthly or annual set of premiums. In exchange, they’ll reimburse you for all or part of any covered veterinary bills that your pet rings up.

The Three Types of Pet Insurance Policies

Most pet insurance providers offer three types of pet insurance policies:


Typically the least-expensive option, accident-only pet insurance reimburses you when your pet is treated for a common injury, such as a broken bone or toxic ingestion.

Accident and Illness

Priced a bit higher than accident-only, accident and illness policies reimburse you for veterinary treatments that treat your pet’s injuries and illnesses, such as some cancers, kennel cough, and bite wounds.


Preventative care policies reimburse you for medical treatments that occur before your pet gets sick or injured, such as a routine checkup. However, it’s important to know that most preventative care policies cannot be bought on their own. Instead, they must be purchased in addition to another policy (for example, your base plan may be “accident-only” with a preventative add-on).

How Do You Use Your Pet Insurance Policy?

Once you apply for a pet insurance policy and are accepted, there are still a few hoops you need to jump through before you can start cashing reimbursements. Here’s what to expect after approval:

1. Get Through Your Waiting Period

After signing your contract, most pet insurance policies have a waiting period before your coverage truly starts (usually around 14 days). Any injury or illness that starts before the end of this waiting period will be considered a pre-existing condition and not meet the requirements for coverage.

2. Pay the Vet Directly

If your pet gets sick or injured, you’ll pay your vet bill out-of-pocket, even if your pet meets coverage requirements.

3. File a Claim

Submit a claim to your pet insurance provider after you pay your vet bill, either online or through an app. Filing is usually as simple as sending a photo of your veterinary receipt.

4. Wait for Approval and Reimbursement

If your pet insurance company approves your claim, you’ll be reimbursed (up to 90% of the covered costs) by either direct deposit or check.

What Kinds of Animals are Covered by Pet Insurance?

Most pet insurance companies will only provide coverage to kittens, cats, puppies, and dogs.

Select pet insurers may provide coverage for birds, reptiles, and rabbits.

What Does Pet Insurance Cover?

Although coverage details will be different for every pet insurance provider, these scenarios are commonly reimbursed by most pet insurance companies:

  • Accident-Only:
    • Broken Bones
    • Sprains
    • Bite Wounds/Cuts
    • Toxic Ingestions
  • Accident and Illness:
    • Accident-Only, plus:
    • Diabetes
    • Cancers
    • Hyperthyroidism
    • Respiratory issues
    • Digestive problems
    • UTIs
  • Preventative:
    • Routine Care
    • Vaccines
    • Parasite Tests
    • Heartworm, Flea, or Tick Preventatives

What Does Pet Insurance Not Cover?

Pet insurance policies can’t cover everything. In order to make a profit, pet insurance companies can’t afford to reimburse pet owners with pets that are already sick, already injured, or who incur an ailment that is extremely expensive to treat.

Although every pet insurance company is different, you probably won’t find the following scenarios covered:

  • Pre-existing Conditions: If your pet is injured or sick before you sign up for coverage, that injury or illness is labeled a “pre-existing condition” and will not be eligible for reimbursements.
  • Genetic or Congenital Diseases: Some pet breeds are at an increased risk of catching certain illnesses due to their gene pool. Many of these genetic diseases will not be covered.
  • Cruciate Ligament Injury: If your pet injures a ligament on one side of its body, the ligament on the other side of its body is usually not reimbursabl
Accident-Only Accident and Illness Preventative
Broken Bones X X
Sprains X X
Bite Wounds/Cuts X X
Toxic Ingestions X X
Diabetes X
Cancers X
Hyperthyroidism X
Respiratory issues X
Digestive problems X
Routine Care X
Vaccines X
Parasite Tests X
Heartworm, Flea, or Tick Preventatives X

How Much Does Pet Insurance Cost?

Every pet insurance policy has a unique price point, designed to fit a specific customer. Keeping that in mind, most pet insurance policies premiums cost a minimum of:

  • $20 a month for dogs
  • $15 a month for cats

That said, premiums for both dogs and cats can cost well over $100 per month, depending on a number of factors. These pet factors play the largest role in premium pricing:

  • Species
  • Breed
  • Age
  • Location
  • Policy Type
  • Policy Details

Policy Details You Can Customize

You have the chance to customize some of your policy details, which usually has a direct impact on your final premium pricing. You can alter the following details:


This is the amount of money you have to pay out-of-pocket for a covered vet bill before your reimbursement coverage kicks in. Deductibles typically reset annually. The lower the deductible, the more expensive the premiums.

Reimbursement Percentage

This is the percentage of a covered vet bill that you’ll be reimbursed following an approved claim. Most pet insurance providers offer a reimbursement percentage of up to 90%. The higher this percentage, the more expensive the premium costs.

Annual Coverage Limit

This is the maximum amount of reimbursement money you can receive in a year. This limit may be set for specific vet treatments, or it may be shared across all of your pet’s vet bills. The higher the coverage limit, the more expensive the premiums.

How Pet Insurance Protects You and Your Pet

Pet insurance protects both you and your pet by:

  • Providing affordable preventative care: Preventative add-ons make most routine treatments and tests reimbursable, meaning you never have to hesitate when taking your pet to the vet.
  • Creating a financial safety net: If your pet requires a costly treatment—such as surgery or rare medication—your pet insurance policy can save you up to 90% on your final bill.

Find the Right Pet Insurance Company for You

Thinking about finding a pet insurance policy for your favorite furry friend? If you have a dog or cat, we know where you can start your search.

You can find coverage information, pricing, and detailed reviews for the top-rated pet insurance providers on our list. Save yourself the research time and find all of the best-reviewed providers under one roof.

Browse Pet Insurance Policies