What Does Pet Insurance Cover? – The Motley Fool

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Many households include pets as a part of their families. An impressive 70% of households in the United States own a pet and will spend an estimated $32.3 billion on vet care and products. As people spend more money on their pets, purchasing pet insurance is also on the rise.
The average cost of emergency veterinary surgery for dogs and cats can run between $1,500 to $5,000. With 4 out of 5 pet owners unable to afford a $5,000 vet bill, pet insurance can be an affordable way to help defray these costs. But, what does pet insurance cover and is it worth the cost?

Pet insurance typically covers pets for accidents, injuries, and illnesses. Regular vet check-ups, vaccines, preventive medications, and other routine care are expected during the life of a pet. These costs can be budgeted, so they are not typically included in coverage unless added as an additional rider. Pet insurance is most appropriate for helping with unexpected costs, such as an accident, injury, or illness.
Pet insurance can help offset some of the healthcare costs associated with a pet. There are different pet insurance plans based on the pet, the type of coverage, and the insurance company.
Depending on the plan, pet insurance policies can cover:
There are three types of pet insurance coverage: accident-only, accident and illness, and wellness coverages. Each level determines the type of care covered as well as the cost.
Although most insurers offer the three types of coverage, each plan will have differences within each plan, so it is important to shop around to compare plans.
Insurance companies offer additional coverage options such as emergency treatment overseas and liability coverage for injuries caused by a pet. In addition to the different endorsements pet owners can add to the policy, pet owners have other ways to customize their plans.
When looking for pet insurance, pet owners should consider several factors.
The cost of pet insurance depends on many variables, such as the type of pet, breed, sex, age, location, the different types of coverages, and the deductible.
Wellness coverage typically costs $20-$25 per month and is rolled into comprehensive coverage policies. For most people, the cost of these policies are what they would pay out of pocket anyway, so it may not be worth getting a standalone wellness plan.
If your pet develops chronic illnesses later in life, then a pet insurance policy can be well worth the cost. Hospitalizations can cost $800 to $1,500 per night. One trip to the emergency room for a dog would be worth the $600 in average annual premium. In addition to offsetting financial costs, pet insurance can provide you peace of mind for a beloved member of your family.
The best pet insurance can save you thousands of dollars a year on emergency treatment and prescription medication. Since it doesn't cover preventative care, it is important that pet owners ensure their pets are eating a healthy diet, exercising regularly, and not skipping annual wellness checks.
Most pet insurance policies do not cover pre-existing conditions. So the earlier you cover your pet, the greater chance you have of covering chronic illnesses that may develop later in life. Especially for major illnesses, a pet insurance plan can cover the total premiums paid over the life of your pet. To find the best pet insurance company for you, get quotes from several pet insurers and compare costs and coverages.
Since pets are considered property, there are more restrictions and exclusions than healthcare insurance for humans. Exclusions are based on the type of plan. It is important to understand and review what a pet insurance plan will not cover. Here are the most common exclusions:
Any medical condition that a pet has before the policy starts is subject to exclusion. Some pet insurance companies review the past 24 months or a pet's entire life to establish pre-existing conditions. This also includes hereditary disorders. Some plans do not cover certain breeds due to the fact they are predisposed to certain medical conditions.
Most plans have a rider that offers preventative care. If not included, however, pet owners will have to pay for routine veterinary care out of pocket. If pets get sick due to pet owners not vaccinating their pets, then treatments will likely not be covered.
Most policies do not cover cosmetic surgeries or expenses not directly related to veterinary care. This typically covers tail docking, ear cropping, nail trimming, and cosmetic dental restoration for teeth such as veneers and crowns.
A bilateral condition is a condition or disease that affects both sides of the body. If pets have a problem with parts of their knees, hips, and other conditions that can impact both sides of a pet's body, then they are not covered. Because a pet runs a higher risk of the same condition on the other side of the body, if a pet has a pre-existing instance of a bilateral condition, the other side is typically not covered. Certain policies restrict the condition to just the first year. So if the problems arise after 12 months, then they will be covered.
Pet owners typically have to pay for costs related to pregnancy, breeding, or whelping. 
Insurance companies won't cover deliberate injuries by a pet owner or anyone in the household. Injury and illnesses from fighting, racing, cruelty, or neglect are also not covered.
Most pet insurance policies have a traditional waiting period of two weeks. Some injuries, like bilateral problems, have other specific time periods.
Pet health insurance is available for all types of pets. They include common animals, such as dogs, cats, and rabbits, as well as uncommon pets, such as ferrets, exotic birds, and various rodents.
Certain breeds may be more expensive to cover since they are more expensive to care for. Check the insurance company to see if your pet is covered. Some insurers will cover certain exotic pets while others will not.
Pet owners spend nearly $4,500 a year on care for their pets. This amount is 61% higher than what they expected the costs to be. Having the right type of pet insurance can help offset these high costs.
Pre-existing conditions, preventative care, grooming, and expenses not directly related to veterinary care are common exclusions for most pet insurance plans. Exclusions are also based on the type of plan.
Most pet insurance plans will cover some medication based on the type of plan. Some companies offer coverage for prescription food, prescription supplements, and FDA approved medication. Preventative medications such as flea treatments are not covered unless the plan includes a wellness rider.
David S. Chang, ChFC®, CLU® is an award-winning entrepreneur and financial planner with over two decades of experience in the personal finance space. He is a graduate of the United States Military Academy at West Point and a Lieutenant Colonel in the Army National Guard. He is an East-West Graduate Degree Fellow and has an MBA from the UCLA Anderson School of Management.
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