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How Does Pet Insurance Work?

Author Icon Written by Brenda Woods Updated 03/28/2024

Pet insurance is a health plan for your furry friends that helps you save money on their health-related costs. When unexpected expenses pop up as a result of an accident or illness, pet owners can submit claims through a simple process, providing them with peace of mind during a stressful event. In this article, we’ll cover the benefits of pet insurance, how to submit claims, and the best pet insurance plans. So, if you’re wondering how pet insurance works, keep reading to learn more.

How It Works

Pet owners who elect to pay for pet insurance coverage may receive reimbursements on eligible veterinary expenses. Although every policy is different, most plans have a similar reimbursement model. Below is a step-by-step guide to how a pet insurance coverage works:

  1. Visit your licensed veterinarian for an illness, an accident, or a wellness visit, and pay your bill at the time of service. Remember to hang onto your receipt.
  2. Submit your claim and receipt to your pet insurance policy. Most insurance policies allow clients to submit online, but check with your provider to confirm.
  3. Receive your reimbursement on eligible expenses once you’ve reached your deductible. Claims are typically processed five to nine days after submission.

There are some terms you’ll need to understand as you research different pet insurance providers.

Waiting Periods

To prevent pet owners from purchasing pet insurance plans after their pet has an accident or is diagnosed with an illness, providers institute a waiting period between enrollment and when you can first file a claim. Typically, this will be at least 48 hours for an accident claim and 14 days for an illness claim. However, the waiting period may be up to a year for some orthopedic or hereditary conditions like hip dysplasia.

Policy Limits

Most policies put an annual limit on the dollar amount they’ll cover each year. Sometimes there is also a lifetime payout limit for the covered pet or a limit per incident or illness. A few plans have no limits, but they typically have very high premiums.


Your pet insurance deductible is the amount you’ll have to pay out of pocket before your pet insurance policy kicks in. Deductibles may be annual, so you’ll have to reach that amount every year before the provider starts paying. Typically, a low annual deductible plan will have a higher monthly premium and vice versa.

Alternatively, deductibles may be assessed per health problem. That means you’d have to pay separate deductibles on, for example, a broken leg and an arthritis diagnosis. However, once you reach the deductible for arthritis, the company will apply your reimbursement percentage to all future arthritis-related treatments.


Most pet insurance companies require you to pay the full cost of the vet bill up-front, and then you can file a claim and wait for reimbursement from your provider. The benefit of this system is that there’s no such thing as an “out-of-network” veterinarian—you can choose your vet. However, you will have to pay them directly when services are rendered.

Most plans will reimburse between 70% and 90% of this amount, presuming you’ve met your deductible but haven’t exceeded your coverage limit. Ultimately, that means a policyholder’s co-pay will be between 10% and 30% of the final bill.

Common Exclusions

No insurance plan will cover all health conditions. Pet insurance providers specifically exclude preexisting conditions—those that occurred or were diagnosed at any time before the end of the waiting period. Additionally, most policies exclude the following:

  • Boarding
  • Breeding/pregnancy care
  • Cosmetic procedures, such as tail docking and declawing
  • Elective procedures, such as spaying and neutering
  • Funeral/memorial costs
  • Grooming
  • Transportation

Additionally, coverage for congenital conditions, hospitalization, microchipping, dental care, and behavioral treatments may be excluded, or they may only be available as add-ons. Make sure you check any plan’s exclusions before you commit to it.

Claims Process

With nearly all plans, you’ll pay your veterinary bills at the time of service and then file a claim with your insurance provider afterward. A representative assigned to your claim will then decide whether it falls under the terms of your insurance policy. You’ll be paid back at the reimbursement level stated in your chosen plan if it does. Typically, you’ll receive your reimbursement five to nine business days after filing your claim.


Saving money on veterinary care is the primary benefit of pet insurance coverage, particularly when it comes to catastrophic care for injuries or illness. For example, according to Consumer Reports, veterinary cancer treatment can easily surpass $5,000. Likewise, surgery to repair a torn ligament can be in the range of $3,300. If you have pet health insurance already in place, you can be reimbursed for a large portion of this cost.

What Type Is Best?

Although companies differ in terms of their plans, there are several different general types of pet insurance coverage. First, nearly all providers offer plans with accident-and-illness coverage. This type of coverage doesn’t extend to routine care visits, but it will cover large bills resulting from things like broken bones or digestive illnesses.

Alternatively, some plans only cover accidents, such as injuries, ingesting toxic substances, or choking. Some companies also offer wellness coverage that applies to preventive care. These wellness plans help pay for regular exam fees, vaccinations, heartworm medication, and even some lab tests.

Accident-and-illness coverage will typically save you the most money since fees for diagnosis, medication, X-rays, and more add up quickly. Wellness coverage will generally allow you to break even over the course of a year, costing about as much as a year’s worth of wellness care. However, it will allow you to spread out the cost evenly by month instead of paying larger sums at once.

Is There Pet Insurance for Exotic Animals?

According to the North American Pet Health Insurance Association, dogs are the most insured of all pets—at about 80%—and cats come in second at nearly 20%. Although most pet insurance companies only offer plans for cats and dogs, Nationwide offers insurance for birds and exotic pets, including ferrets, iguanas, turtles, and more. Their policy for exotic pets is a reimbursement model with exclusions similar to other pet insurance plans.

Is Pet Insurance Worth It?

You’ll probably pay about as much to the insurance provider as you would to the vet for routine veterinary care, like general wellness checkups.

However, when it comes to accidents and serious illnesses, you may save a substantial amount of money if you have pet insurance. Since there is a waiting period and exclusion for preexisting conditions, you’ll have to have purchased your policy before these incidents happen.

Our Picks


Sample premium price*




Number of plans or add-ons




States available




Reimbursement percentages

70%, 80%, or 90%

70%, 80%, or 90%

70%, 80%, or 90%

Accident waiting period

2 days

14 days

2 days

*Quotes based on a 4-year-old, medium-sized, mixed-breed dog in Raleigh, N.C.

Lemonade: Best Overall

Lemonade is our top pick based on its excellent balance of value for the money and comprehensiveness of coverage. Although it offers a single accident-and-illness plan, you have the option to add on coverage for preventive care, vet visit fees, or physical therapy. In addition, the cost of pet insurance from Lemonade is some of the lowest available and generally ranges from $15–$30 a month for dogs and $9–$15 a month for cats.

Spot: Most Customizable Plans

Spot offers two pet insurance plans: one just for accidents and another covering both accidents and illness. You can also add Gold or Platinum Preventive Care options for a flat rate with either plan. You can further customize your coverage by choosing the amount of your deductible and your total coverage limit, and Spot even offers plans with unlimited coverage. Add your contact info to this simple form to find out how much a Spot pet insurance plan could cost you.

Embrace: Best Deductibles

Embrace pet insurance tends to cost a little more, but you can choose from five deductible options and coverage limits. There’s a single accident-and-illness plan, though you can also add a routine care plan to your coverage. Additionally, your deductible will decrease over time with Embrace’s Healthy Pet Deductible benefit. For more information or a free quote, visit Embrace’s website and fill out this easy form.

Our Conclusion

By reimbursing you for a percentage of large, non-routine vet bills due to accidents or illness, pet insurance can provide you with peace of mind and budget protection. Still, it’s important to know what your policy will or won’t cover. Make sure to get at least three pet insurance quotes, and take a careful look at the details of the coverage you can receive. Your premiums may depend on your pet’s age and the specific conditions that the policy covers.

FAQ About How Pet Insurance Works

What does pet insurance cover?

Pet insurance generally covers the veterinary health care your pet needs after sustaining an accident or being diagnosed with an illness. These may include scans, blood tests, outpatient care, surgery, or medications, but it will depend on the specifics of the plan you choose.

What does pet insurance not cover?

Pet insurance does not cover any preexisting conditions. Additionally, providers don’t cover elective or cosmetic procedures or any treatments not performed by a licensed veterinarian. Healthcare-adjacent costs—like boarding, transportation, and grooming—tend to fall outside the policy, though some providers may cover hospitalization in some circumstances.

Can you claim pet insurance immediately?

You can claim pet insurance immediately. Most pet insurance providers make it quick and easy to file claims on your policy. Many have apps that allow you to file from your mobile device, and some have customer service available outside of business hours, but it will take a few days to several weeks to receive reimbursement.

How long does pet insurance take to pay?

This will depend on your insurance provider and the complexity of your claim. For example, if the process is automated and the claim is straightforward, it may only take a few days. However, if the claim is complex and reimbursement is processed by check, it may take several weeks.

Our Rating Methodology

Our team is dedicated to thorough, in-depth reviews of each product or service that we detail in our content. Determined to build trust with our readers through transparency, accuracy, and accountability, we’ve built a detailed rating system to score pet insurance brands. Included in this methodology are the following six factors with their respective scoring weights:

  • Coverage (25)
  • Plan options (20)
  • Monthly cost (20)
  • Company reputation (15)
  • Customer service (10)
  • Species eligibility (10)

Our researchers keep all data in each company’s score up to date, making any changes to our content when necessary to provide our readers with the most accurate information on relevant metrics, such as plan options, customer service, reputation, and monthly cost.

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