What is Pet Insurance?

If you have a pet then chances are fairly good that you have gone to a local pet store (such as PetSmart) or to the veterinarian's office at least once in the past year, and if so then you have probably heard the phrase pet insurance before. You would think that the phrase pet insurance is pretty self explanatory, and generally speaking you would be right. The thing is though, that you should at least make an attempt to understand what pet insurance is before you rush out and purchase something that may not actually be right for you.

• What it is. Pet insurance, as the name implies, is rather simply an insurance policy that has been written for, and on behalf of, pets. Where the difficulty arises is that it is not, as many people believe, a variation of the health insurance that people use. Instead what it really is, is a variation of property insurance.
• How it works. There is a bit of difference between the way that most pet insurance policies operate, and the way that human health insurance works. Typically human health insurance works by having the doctor send the bill (minus an initial copay) being sent to the insurance company, and then having whatever isn't covered paid by the patient. Pet insurance works by first having the pet owner pay the bill for the care, and then being reimbursed for a portion (if not all) of the care.
• General differences. As with most things, there are some differences in how pet insurance works. As you have already seen, there is at least one major way that pet insurance is different from human health insurance, but there are also some differences between types of policies. The vast majority of differences lie in where the parent company comes from. For example, if the company is a British one (as the very first policies were) then chances are the policy will reimburse the pet owner 100 percent of what was spent on the pet care. Policies that originated in the United States or Canada though typically pay off only a percentage of the bill (though some will pay up to 90 percent).
• Is it worth it? There really is no definitive answer to the question of whether or not pet insurance is worth it. In large part the final answer is going to be up to the individual pet owners. While there are some definite benefits to having pet insurance, there are also quite a few drawbacks as well. For example, not all pet care is going to be covered by the pet insurance. One of the more common things that most pet insurance policies will not pay for is preventative care, such as vaccinations. This means that you will still have to pay for those visits and care out of your own pocket regardless of whether or not you have pet insurance.