Pet Insurance Guide

Lesson 9:
Additional Things You Need To Know Before You Buy

(Not All Pet Insurance Plans Are Created Equal)

  1. Read the Policy Before You Buy, After You Buy and at Each Renewal.
    (Make sure you understand all exclusions and requirements)

    Exclusions are medical conditions that are not covered by the plan.

    Requirements are things you must do to remain insured (e.g. annual exams, animal must reside a place of residence listed on policy, submission of medical records, and adherence to the vaccination recommendations).

    Even if you use the comparison sheets on this website to help you make a decision about your pet insurance purchase, it is still very important that you read a sample policy of the plan before you buy. The written policy contains the terms and conditions of the plan you are buying. The written policy is where all the hidden exclusions and requirements are.

    YOU MUST READ THIS DOCUMENT before you buy so that you are fully aware of what is not covered by the plan and what is required of you to maintain coverage. I've found some very surprising exclusions and requirements that are not listed in the marketing materials. Some companies have sample policies available online. For those that don't, you can request one via email.

    In addition to reading the sample policy before you buy, it is equally important that you read the actual policy you receive after you purchase the policy as things may be different after you apply. The underwriter may choose not to cover you for certain things after they receive your application.

    Use the company's "Money Back Guarantee" period (if present) to review the actual policy they send you. If there is anything in the policy that you do not agree with, you can cancel the policy during this "Money Back Guarantee" period. You will get your money back, provided you did not file a claim.

    Also, make sure you read the new policy your receive at each renewal as things can change at each renewal as well.

    If a sample policy is not available for your review prior to purchase, I'd be a little concerned about buying this policy...But in this case you could still protect yourself using the "Money Back Guarantee" period (if present) to review the policy they send you after you buy.

    Be wary of vaguely worded exclusions or limitations which could pose a problem later. Make sure all oral promises are put in writing.

  2. Ask for a list of exclusions based on your pet's past medical history and breed.

    Usually you have to purchase the policy first to receive this type of review and you will have to submit medical records. Also, not all pet insurance companies offer this option....but if they do, it will give you a list of the exclusions you can expect based on your pet's prior history. If you don't like what is on this list, you can cancel the policy within the money back guarantee period.

    Just make sure that the pet insurance company will have this review done well before the money back guarantee expires so that you have adequate time to review it.

  3. Pet Insurance Companies are Businesses

    As businesses, their top priority is to make a profit for their stakeholders (e.g. investors/shareholders). They can and may change your rates and terms to meet that top priority. A change of business ownership or underwriters can also be a catalyst for changes in your rates and terms.

    When you purchase pet insurance, make sure you have a realistic understanding of this and how it can affect you.

  4. Know Which States are Covered

    Not all pet insurance companies are licensed to sell insurance in all states...Therefore, before buying a pet insurance plan, make sure the company sells plans in your state and any state you may be thinking of moving to. Also, make sure the coverage will be the same in the new state.

    Think of this scenario:

    Let's say you have a pet insurance plan and you move to different state. If your current pet insurance company is not licensed in the state you are moving to, you may not be able to keep your current insurance plan.

    If you apply to another pet insurance company (one that is licensed in your new state) and your pet has diseases that were covered by the old plan, these diseases may not be covered by the new insurance company as they will be deemed pre-existing by the new company.

    The bottom line - try to do as much pre-planning as you can.

  5. Get Pet Insurance as Early as Possible

    As stated in Lesson 7, there are core pieces of coverage that you must have in your pet insurance policy to get the most for your money. If your pet is older or has pre-existing conditions you may not be eligible for full coverage.

  6. Know Who the Underwriter Is

    The underwriter is responsible for paying claims, so it is important for the underwriter to be as financially healthy as possible.

    Research a underwriter's financial health by using A.M. Best's Rating Center. A.M. Best is the largest and longest established insurance rating and information agency.

    When doing this research, make sure you use the underwriter's name not the name of the insurance company. Be aware that some pet insurance companies are their own underwriters, in these cases you may be typing in the name of the company. The underwriter's names are listed on the comparison sheets or can be requested from the pet insurance company.

    To research an underwriter you can...
    1. Use the information in the comparison sheets
    2. Go to A.M. Best's Website.

      Enter the name of the underwriter in the text box labeled 'Search for Insurer by Name' and click the 'Search Now' button at the bottom of the page.

      Once you are on the 'Search Results' page, click on the name of the underwriter to get the full ratings report.

      You may be asked to login or create a new account. It is free to create an account.

    Once you are at the ratings report, you want to look at the underwriter's Financial Strength Rating (e.g. A++, A, A-, B++, etc) and the Outlook (e.g. Positive, Negative, Stable)

    For an explanation of what the Financial Strength Rating means, go to:

  7. Know the Year the Company Started in the USA

    I say in the US because pet insurance is relatively new in the United States compared to other countries.

    Even if a company has a successful business in other countries, it doesn't necessarily mean they will be successful here.

    If they do not make enough money, their underwriters can pull out. The longer they have been in business in the US, the more experience they have providing policies in the US.

    Based on what I've seen since 2008, it can take time for a company to settle in on consistent premium pricing and policy terms.

  8. Know the Enrollment Age Range

    This is the age range a pet must be to sign up for a new policy. There is usually a low end and a high end. There can be one range for dogs and one range for cats. There can be ranges for certain breeds.

    Check to make sure the plan covers the current age of your pet.

    Even if your pet is too old for the high end of the age range, they still may be able to get limited coverage.

  9. Know What the Waiting Periods Are

    The Waiting Period is the time you have to wait before coverage starts. If something happens to your pet during the waiting period, that condition will not be covered by your policy.

    There can be one waiting period for accidents/injuries and another for illnesses. There can also be waiting periods for specific injuries or illnesses like Cruciate Ligament Injuries and Intervertebral Disk Disease.

    If you purchase a pet insurance policy and your pet gets sick during the waiting period, do not wait until after the waiting period to seek treatment and subsequent reimbursement because:

    1. This is detrimental to your pet
    2. It is considered insurance fraud

    Make sure you have a clear understanding of the waiting periods for the policy you purchase.

  10. Is There Coverage When You Travel Out Of State?

    If you travel with your pet, this is a factor you may want to pay attention to.

    Most plans will cover your pet for eligible expenses if your pet must visit a veterinarian in another state.

    Some plans go further and cover eligible expenses for veterinary visits while you are traveling with your pet to certain countries.

    This coverage is for vacations or if you need to see a specialist in another state/country. If the pet insurance company gets the impression you are living there your claim may not be covered.

    Some companies have a maximum number of days your pet can be in another state/country. If you go over this maximum number of days, coverage will be denied

    Make sure you get a clear understanding of what the out-of-state/country policy is.

  11. Will the Price Increase as Your Pet Ages?

    For most plans, the price of your premium will increase as your pet ages.

    These increases can be annually or occur at certain ages

    Make sure you ask what the price increases will be and when they will happen. Make sure you understand when and how much your premium will increase as your pet ages.

  12. Can the Price of your Premium Increase if you File a Claim?

    Ask if filing a claim will increase your premium.

  13. Can the Price of your Premium Increase for other Reasons?

    Pet insurance companies can increase the premium for your pet for reasons other than the ones mentioned above.

    These additional reasons include but are not limited to: inflation, you moving to another city (even a city within the same state), change of underwriter, and the company's need increase their bottom line.

    Before buying, make sure you fully understand how, when and by how much your premium will increase over time and make sure you are prepared for those increases.

  14. Do you Get to Choose the Veterinarian You Want to Use?

    Most plans allow you to choose the veterinarian you want to use in the US. Some plans will allow you to use choose a veterinarian in other countries.

  15. Does the Company Offer a Money Back Guarantee?

    Plans with money back guarantees are helpful because they allow you to review the terms and conditions of the policy to make sure there are no hidden or unexpected exclusions or requirements.

    (See #1)
  16. Is There a Surcharge for Visiting an Emergency Clinic or a Specialist?

    Some companies may charge an extra fee for these types of veterinary visits. While some will increase the co-pay you must pay.

    Make sure you understand the surcharge policy for these types of services before you buy.

  17. What is the Pre-existing Conditions Policy?

    Pre-existing conditions are illnesses or accidents/injuries that occur before you apply for a policy or that happen during the waiting period.

    Any illness or injury that occurs during this time will not be covered by your plan.

    Some plans have additional conditions in their pre-existing conditions policy.

    For example:

    • Symptoms and clinical signs can be used to label something pre-existing. If your pet had a cough before you applied for pet insurance and this cough was discussed and written in the pet's medical record, there is the possibility that all future cough conditions, no matter what the cause, would be considered pre-existing - even if there was no treatment given.
    • If you change plan levels, there is a possibility that all medical conditions that you filed a claim for in the old plan will be considered pre-existing in the new plan.

    ...So make sure you fully understand the company's pre-existing conditions policy before you buy it. If think your pet may have a pre-existing condition, call the company and ask how it will be handled.

  18. What is their Bilateral Conditions Policy?

    A Bilateral Condition is any condition that can happen on both sides of the body.

    The condition does not have to happen on both sides at the same time. One side could develop the condition, and the other side could develop the condition years later or not at all.

    If the condition happens on both sides of the body, some pet insurance companies will bundle it into one incident. Even if it happened at two different times.

    The most common examples of bilateral conditions given by pet insurance companies include but are not limited to - Hip Dysplasia (could happen in both hips) and Cruciate Injuries (could happen in both knees).

    "Bilateral Conditions" is a term that is specific to the pet insurance industry and how companies handle these conditions can be confusing.

    Let's say a pet has a cruciate injury on his left knee that is pre-existing, if that same pet gets a cruciate injury on the right knee years later, after the policy begins, some companies will bundle this right knee injury with the left knee injury and call it pre-existing as well. Because it is considered pre-existing, it will not be covered.

    Also, for some companies, bilateral conditions share the same Maximum Payout Per-Incident.

    Let's say a pet is diagnosed with a cruciate injury on the left knee during the first year of the insurance policy. He then gets a cruciate injury on the right knee two years later. If the company uses a Maximum Payout Per-Incident structure, the amount of money reimbursed to the owner for the right knee will be whatever is left over from the left knee injury because they are bundled as one incident.

    Try to get as clear as you can on the company's bilateral condition policy. I had a very hard time getting some companies to be clear with me about their bilateral conditions policy. I don't think they were trying to hide anything, I just think it is a complex topic that is not clearly defined.

    I would like to see pet insurance companies do a better job of clearly defining their bilateral conditions policy when it comes to exclusions and Per-Incident Payout Structures. I would also like to see the insurance companies clearly list all the diseases and injuries that will be consider a bilateral condition for the purpose of exclusion and/or for the purpose of payout in a Per-Incident Payout Structure.

    Are ear infections considered a bilateral condition? They can happen on both sides. There are a lot of diseases and injuries that can happen on both sides of the body. Will these be treated as bilateral under the bilateral conditions policy as well?

    In my opinion this is a confusing, gray area.

  19. What is their "Preventable Diseases" Policy?

    Many companies have a clause in their policy that states they will not cover diseases that are preventable by vaccines (Parvo, Bordetella, etc) and prophylactic treatments (heartworm, fleas, whipworm, etc)

    Most of these clauses are vague and leave a lot of unanswered questions. For example, some pets can get sick from bordetella even if vaccinated, will their diseases be covered by the policy? What if your pet has allergic reactions to vaccines and you and your vet decide to minimize the number of vaccines your pet receives, what happens in these cases?

    Make sure you have a clear understanding of the company's stance on this subject.

  20. How is Reimbursement Determined?

    Many people think that the amount of money they will get back from their pet insurance company is based solely on the medical costs they submit with their claim.

    This isn't always true. There are three structures a pet insurance company can use to determine how much they will pay you:

    1. The Actual Veterinary Bill
    2. Usual, Customary, and Reasonable (UCR)
    3. Benefit Schedule

    Actual Veterinary Bill

    Pros: This is the best structure because your reimbursement is based on what you paid.

    Cons: Because the amount of money that a company pays out tends to be higher, companies that use this method tend to have higher premiums.

    Usual, Customary and Reasonable (UCR)

    When a company is using UCR they are using compiled data that states what prices should be based on the procedure and the geographical location. Some companies have their own proprietary compiled data and some use the Veterinary Fee Reference published by the American Animal Hospital Association (AAHA)

    Pros: There is a higher chance that a company using UCR with the Veterinary Fee Reference by AAHA is more likely to be closer to the fee you actually paid than a company that uses a benefit schedule, but a company utilizing UCR is not required to use the Veterinary Fee Reference by AAHA and can use any compiled data, even their own.

    Cons: The amount of money you get back will more than likely be less than the actual vet bill.

    Benefit Schedule

    When an insurance company uses a Benefit Schedule to determine how much they will pay, they have predetermined amounts that they will pay for certain medical problems. These are usually set in stone and usually do not take into account geographical location.

    Pros: You can get an idea of what your reimbursement will be before you go in.

    Cons: Benefit schedules break the reimbursement down by the amount of money you get back for diagnostics and/or treatment of a certain disease or injury. In these cases, you need a medical degree to piece everything together to get an idea of what you will be reimbursed.

    note    I have found that some companies will say they use the actual vet bill (on their websites or via their customer support rep), but the sample or actual written policy states UCR.

    It is the written policy that governs. If the phrase UCR (or some variation of it - "usual and customary", "customary") is used in the written terms and conditions of the policy, it can be implemented at any time despite what someone tells you.

    These same companies may also tell you that they do not use UCR unless the fees are outrageous compared to other prices in the area. This is an "internal" policy (a policy that the company has adopted that allows for leniency in the written terms and conditions in the policy). This "internal" policy may be true at this time, but it doesn't guarantee that it will be true in the future. If this "internal" policy is not written in the terms and conditions, it could change at any time.

  21. How Long Does Reimbursement Take?

    Because you pay the vet upfront and then get reimbursed by the pet insurance company, it is important that you know just how long that reimbursement will take.

  22. Know How Long You Have To Submit Your Claim.

    For most companies, you have a limited amount of time in which to file your claim. The most common time frames are 90 and 180 days. For some companies it is 30 days.

    Know what this time frame is. If you file a claim after this date, the claim will be denied.

  23. Is the Policy Term '12-Months' or 'Month-to-Month'?

    'Month-to-Month' policies open up the opportunity for companies to change your original terms or premiums after 30 days. '12-Month' policies help keep your policy's terms and premiums locked in for a year.

  24. What are Other People Saying About the Pet Insurance Company?

    It's important that you get unbiased information regarding the pet insurance company you are thinking of using.

    Good places are:

    2. The Better Business Bureau (BBB)
    3. Your State's Department of Insurance Regulation
    4. Google - Search Phrase
    5. Your Veterinarian

    Do not rely on one source to help you make a decision, review at least 2 or 3 of the above sources.

    A website with pet insurance reviews by customers. This is very helpful because it gives you an idea of the experience you can expect from the pet insurance company after you buy. When using reviews, look for consistent reasons for dissatisfaction and/or satisfaction.

    The Better Business Bureau (BBB)

    Use this information to check for consumer complaints against the company. You can also use the website to file a complaint.

    Your State's Insurance Department

    Each state has an insurance department whose task it is to regulate insurance companies.

    Contact information for each state's insurance department can be found here.

    Use this information to see if there have been any problems with the insurance company in your state.

    You can also use your state's insurance department to file a complaint.


    You can use Google to search additional reviews about each pet insurance company by using the search phrase - 'Name of Company' + Name of Pet Insurance Company + 'Customer Reviews'. (e.g. Acme Pet Insurance Customer Reviews). When using reviews, look for consistent reasons for dissatisfaction and/or satisfaction.

    Your Veterinarian

    Some veterinarians are well versed in pet insurance and some are not. The best way to use your veterinarian is to ask them their experience with specific pet insurance companies.

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