what is pet insurance?

What is Pet Insurance?

Anyone who brings a pet home is usually overjoyed when welcoming a family member into their homes. These furry companions emit nothing but love, which is why they have officially become honorary family members, now living with us under the same roof.

The pet care industry has grown immensely over the years, and with it followed pet insurance, a version of health insurance for animals.

This optional protection helps protect our furry friend and ourselves from any unforeseen financial burden that surprise veterinary bills may bring.

In this Wealth Rocket article, we'll dive into the topic of pet insurance, answering all of your questions, from what it is and how it works, to choosing the right policy for you and your four-legged friend.

Table of Contents

What is Pet Insurance?

Pet insurance is insurance that protects your pet in the event of a medical emergency or medical non-emergency. It provides coverage that lessens the financial burden that comes with a costly vet bill.

The minimal annual costs of pet ownership are more expensive than most realize. In the first year alone, spending money on the basics like food, collar, leashes, toys, and food bowls is just the beginning. Then comes routine care, including preventive vaccines and annual exams.

Lady with her pets

That's why pet insurance companies have become so popular among pet owners. They help take on the financial burden of any unplanned expenses, such as accidents and illness.

Different from (human) health insurance, pet health insurance is better compared to property insurance.

Ultimately, the pet owner chooses a plan and pays a monthly premium for the animal's lifespan. If the pet requires any unexpected veterinary care, the insurance company will help pay back a larger percentage of the final bill.

There are often some exclusions, like pre-existing conditions, dental issues, and specific disorders. The goal is to reduce any extra out-of-pocket expenses of an almost certainly hefty bill.

Dog and cat with family

How Does Pet Insurance Work?

Pet insurance works like regular insurance. When it’s time to use the insurance, the first step is to pay the vet clinic out of pocket, then submit a claim with the insurer, who will issue a reimbursement once the claim is approved.

There are a few terms you should become familiar with before purchasing any form of pet insurance. After all, there is so much information to sift through when trying to find the right partnership.

When signing for a pet insurance plan, companies will always have a waiting period between your pet’s enrolment and when the insurance kicks in. This rule helps deter pet owners who sign up when their pet is already ill.

The idea is finding a plan that benefits both your pet and your wallet can be stressful. Here is a list of some helpful points:


A premium is a monthly premium fee that covers the cost of the insurance. The more you pay each month, the more is covered.


A deductible is a cost you must pay yearly before the insurance kicks in. The lower the premium, the higher the deductible. A deductible range can be between $0 to $1,000.


A percentage agreed upon between the insurance company and the policyholder, to which the insurer will not reimburse.


A cap is the maximum amount an insurance company will pay the customer.


Exclusions are expenses that the insurance provider will not cover, such as pre-existing conditions.

If you want to learn more about the ins and outs of pet insurance, check out Wealth Rocket’s guide to How Pet Insurance Works.

How is Pet Insurance Cost Calculated?

Monthly policy fees and premiums vary depending on very specific factors. All companies rely on tiny details which depend on your pet, such as location, species, breed, and age, among other factors.

If there are any previous notes regarding illness or injury before purchasing the pet plan, insurance companies will generally not offer any level of support.

Here’s a breakdown of some of the most common causes of cost.


Big, highly populated cities have higher vet clinic costs and higher insurance premium rates.


Specific breeds may have common known issues which will require veterinary care. Some insurers might refuse to cover ailments that specific breeds are prone to and usually don’t cover pre-existing conditions.


Age is a major contributing factor to the price of pet insurance. For example, medical issues are next to none in younger pets, while older pets may experience more health issues.

What Does Pet Insurance Cover?

Pet insurance companies offer support during tough times, but exam fees for yearly check-ups, routine vaccines, and medications are paid out-of-pocket by the pet owner.

Pet insurance comes in two variants: comprehensive and accident only.

Comprehensive plans are a little more complex, offering different levels of insurance coverage, supporting both accidents and illnesses that may arise throughout a pet’s life.

Accident-only plans exist to help people who are forced into a stressful situation when the unexpected occurs.

The weight of emotions that comes over anyone when a pet is in pain while attempting to calculate financial obligations is not easy.

Some companies even offer add-ons to basic plans. Paying more of a monthly fee will reel in more support from the insurer.

How to Choose the Right Pet Insurance Policy

Selecting the right plan is individual to each animal and their human. The easiest way to start the process of finding the right pet insurance policy for your pet is to ask a vet.

Researching insurance company review on the internet is another route. At the same time, word-of-mouth references can help field whether or not specific policies will work with your pet’s needs and your budget.

All pet insurance companies will offer free quotes on their websites. Your pet’s quote will be in after five minutes of your time entering your pet or pets’ information. Trupanion and Petsecure are some of the many popular pet insurance providers available in the US and Canada.

Our Final Thoughts

The rise in popularity of pet insurance has happened for no other reason than it adds support to any pet owner.

Whether it be using the customer service department as a sounding board to help make sound decisions for an animal’s care or for financial support in emergency times.

All pet insurance companies have their pros and cons, but one will always benefit your pets’ needs more than others.

Don’t rule out the insurers who offer higher premiums and lower deductibles. Remember that the more fees paid upfront result in more illness coverage and support in the future. Some companies offer an unlimited payout cap, which may be worth the ease of mind.

The pet insurance industry grew for love for animals, wishing the best treatment for our four-legged friends. We spend big money on trendy collars, and matching leashes, so why be frugal when it comes to our pets’ health. They deserve the best love.

Frequently Asked Questions

Both the cost of veterinary care and pet insurance differs depending on your pet and the plan chosen for them. On average, monthly insurance policies for a dog are $47 per month. For a cat, insurance hovers around $29.50 a month.

Companies calculate a monthly price based on factors that include your location, breed, and age.

No, pet insurance is not mandatory. Animal insurance will help financially plan for worst-case scenarios if your pet falls ill or is involved in an accident. The goal of pet insurance is to alleviate any added stress when your furry friend falls ill or is involved in an accident.

The majority of pet insurance companies in North America only offer support for cats and dogs.

Unfortunately, not all veterinarians can offer the necessary support for exotic animals like birds, fish, amphibians, and reptiles, but they aren’t easy to find. There are specific companies that offer determined insurance plans.

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