Common Challenges in Pet Insurance

Published: 9/1/2021

Here at Wag!, we believe pet insurance is always worth the investment. Even pets with a clean bill of health can get sick or injured in the blink of an eye, placing a major financial burden on you. However, we also know that navigating pet health insurance isn't always a walk in the park. We've broken down a few of the most common challenges pet parents face when applying for insurance and submitting claims.


Pets with pre-existing conditions

Can you get pet insurance if your pet is already sick? Of course! Just be aware that very few, if any, pet insurance providers cover pre-existing conditions. Those that do are generally pet insurance alternatives that offer cost-sharing options or discounts on qualifying veterinary services.

Why don't pet insurance companies cover pre-existing conditions? To prevent insurance fraud. It wouldn't be fair to the insurance company to pay for a condition the pet parent already knew about when they applied for a policy.

However, pets with pre-existing conditions may find it harder to qualify for coverage, even for newly diagnosed conditions. In online reviews, frustrated pet parents complained their insurance company rejected claims for new conditions, stating they were caused by or related to a pre-existing condition. Judging by the number of complaints with organizations like the Better Business Bureau and TrustPilot, this seems to be a relatively common issue.

Ultimately, the decision to approve or deny a claim is at the insurer's discretion. If your insurer says your claim relates to a pre-existing condition (even if it doesn't), it's up to you and your vet to prove that's not the case.

Does this mean your insurance provider will reject all your claims if your pet has a pre-existing condition? Definitely not! It's just something you should be aware of when comparing your pet insurance options.


Upfront payment

Most pet insurance companies will reimburse you instead of paying your veterinarian directly. This means you'll usually need to pay the full amount by the due date, submit a claim to your insurance provider, and then wait for the claim to be approved and reimbursed. The only exception at the time of writing is Trupanion. This provider offers software for veterinary clinics that allows vets to submit claims on the pet parent's behalf and receive direct payment within minutes.

For pet parents who have a pet care savings account, pet credit card, or a reliable source of income, paying vet bills upfront may not be an issue. But with the cost of veterinary care steadily rising, pet parents battling financial issues may find it hard to foot the bill for emergency treatment. Fortunately, most claims are approved and reimbursed within 3 days, which leads us to the next challenge.


Claims processing times

The claims approval and reimbursement process can take a long time. Although some insurance providers process and approve claims within 24 hours, others may take up to 60 days to reimburse you.

Fortunately, insurance providers like Trupanion are setting a precedent to change that. With Trupanion's Express software, your veterinarian can submit a claim and receive approval and payment before you even leave the clinic. Hopefully, other insurance providers will soon follow suit and roll out similar solutions to make things easier on pet parents.


Coverage limits, reimbursement rates, and deductibles

If these pet insurance terms sound Greek to you, here's a quick rundown:

  • Coverage limit: The maximum dollar amount of vet care costs that are eligible for reimbursement.

  • Reimbursement rate: The percentage of vet care costs you'll be reimbursed for per claim once your deductible is met.

  • Deductible: The amount of vet care costs you're required to pay before insurance kicks in.

Some pet insurance providers offer customizable deductibles, coverage limits, and reimbursement rates. Other providers offer different policies with fixed rates instead. Let's talk about each one in more detail.

Coverage limits

There are 3 types of coverage limits: annual, lifetime, and per-condition. Annual coverage limits are more common than per-condition and lifetime limits.

Here's how it works. Let's say your annual coverage limit is $10,000. Any veterinary expenses that exceed $10,000 within that year must be paid out of pocket.

If your plan has per-condition coverage limits, you're allowed to claim up to the maximum amount set for each condition. Say, for example, your dog has hip dysplasia and your per-condition coverage limit is $5,000. This means you're allowed to claim up to $5,000 in veterinary expenses for hip dysplasia. If your pup is later diagnosed with liver disease, you can claim up to $5,000 in expenses for that condition. Costs that exceed the limits must be paid out of pocket.

Finally, if your plan has a lifetime limit, you'll only be reimbursed for the maximum amount of eligible expenses throughout your pet's lifetime.

Coverage limits start as low as $2,000 per year. For some plans, coverage limits don't apply at all. However, deductibles and monthly premiums tend to cost more for plans with no payout limits.

Reimbursement rates

Very few pet insurance providers will cover 100% of your vet bills, even after you've met your deductible. Instead, they'll cover a percentage of eligible costs. Most reimbursement rates are between 70% and 90%.

Here's an example of how that works. Let's say your first vet bill after getting pet insurance is $1,000. Your annual deductible is $250, and your reimbursement rate is 90%.

  • $1,000 total cost - $250 deductible = $750

  • 90% of $750 = $675

After you meet your deductible, you'll be reimbursed $675 of the total bill.

Let's say you're hit with another $1,000 vet bill shortly afterward. Since you've already met your annual deductible, you'll be reimbursed 90% of the total bill, or $900.

Crunching the numbers can get a little confusing. But pet insurance is an invaluable safety net that can put thousands of dollars back in your pocket if your fur-baby becomes seriously injured or ill.

Deductibles

Similar to coverage limits, there are 2 main types of deductibles: annual and per-condition. They work in almost exactly the same way. If your plan has an annual deductible, you're required to pay that amount toward your pet's vet bills per year before insurance kicks in.

Same goes for per-condition deductibles. Let's go back to our hip dysplasia example from the coverage limits section above. If you've met your deductible for hip dysplasia but your dog is diagnosed with liver disease, you'll also need to pay the deductible for that condition before insurance kicks in.


Pet insurance can be difficult to navigate even for experienced pet parents. In the market for a policy? Secure pet health insurance today to avoid high veterinary care costs. Brought to you by Pet Insurer, Wag! Wellness lets pet parents compare insurance plans from leading companies like FIGO and Nationwide. Find the “pawfect” plan for your pet in just a few clicks!

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