With so many insurers in the Pet Insurance business it may be hard to decide which plan is right for you. Too often people only look at the percentage of reimbursement, monthly cost and deductible when trying to decide which plan they should select. This is because these are the items that are front and center on every company’s website and every broker’s blog page. These are the items that insurers and brokers want you to focus on so you don’t focus on the hidden details that can make a plan a bad choice for you.
8 Things You Should Know Before You Buy
Take a look at these 8 things you should know about pet insurance before you buy, but you probably don’t.
1. Your premiums will increase over the lifetime of your policy
Most people use the cost of the plan at the time of enrollment to decide which plan to pick. This is because with a lack of additional information we often make the decision based on affordability.
Don’t get tricked!
Pet insurance companies have been known to lure consumers in with low monthly rates only to have those rates increase significantly after the first year or two of coverage. It doesn’t stop there. These same companies will continue to increase the rates until they become prohibitively high.
Why you ask? Insurance companies often cite the higher cost of claims as the pet ages, but does it really cost more to insure a 3 year old dog compared to a 1 year old? Too often people find themselves without coverage when they need it after years of paying because it became too expensive.
Know what factors the plan uses to determine annual increases before buying:
- Age – Many plans base the increase on the age of the dog whether or not it is justified. Although all policies holders will see an increase in the cost of coverage as their pets age, look for an insurer that does not increase costs annually purely due to age. This information can be hard to find. Sometimes you can find it in the FAQ. If all else fails try calling the company, but get the answer in writing. If the company you are interested in states they increase rates based on age find out how often.
Tip: If you can’t find the information on rate increases in the FAQ, try typing in “What will cause your premiums to change?” or “Will my rates increase?” in the search function of the website
- Claims – Some companies will increase the cost of coverage after a claim. Stay away from these companies. This information may be hard to find on a company’s website.
Tip: Try checking review sites to see if you find that a company has a history of increasing premiums after claims.
- Health Trends – Most insurers will increase the cost based on health trends. Just like with human health insurance coverage if there is an upward trend in health care costs, the increase is passed on to the policy holders. This could be caused by an increase in the veterinary costs due to inflation, the increase cost of care for an older pet or new technology and services of veterinary care.
2. Age may determine the type of plans available
Age not only affects the premiums but can also determine the coverage you are eligible for.
For example: Nationwide Pet Insurance only offers Major Medical for dogs under 1 year of age. Their Major Medical plan benefits are paid on a schedule. This means that they cap the amount of benefits you can receive based on this schedule. To get the full benefits advertised on their website you need to upgrade your plan to one of their whole pet plans after your pup turns one.
On the other end of the age spectrum once your pups turns 10 under Nationwide, they no longer qualify for the major medical plan. All this information is front and center on Nationwide’s pet insurance site, but may not be fully dislosed if enrolling by phone.
Tip: When researching plans make sure to check if the plan is limited based on current age and future ages. If speaking to a representative always get the information in writing!
3. Exams may not be covered
One of the most surprising things I discovered was that many pet insurance plans do not cover exams. I don’t mean just wellness exams. Even the some of the best insurers don’t cover exams for sickness and injury. Exams are often the largest cost when a pet is sick. If this is important to you, look for a plan that covers exams.
4. Payments may be based on R&C
Does the plan state that they will pay “Up to 90% back on vet bills”? Sounds too good to be true? It just may be. Some insurers calculate the percentage of reimbursement on what is considered the customary and reasonable cost of the procedure. This is often less than what you actual paid.
Tip: When looking over your policy make sure you know how payments are determined.
5. Taxes may not be reimbursed
Some insurer will only pay for the actual cost of the procedure or treatments, not the cost of the associated tax. For some states this can be as much as 18% added to your cost. This information is generally not that hard to find, since it is often used as a way to differentiate plans. Just look under “What’s covered” or “What’s Not Covered” on their websites.
Tip: Check to see if your state charges tax on veterinary medical or non-medical services
6. Maximum Plan Limits
Maximum plan limits can take many forms. The plan might have an annual maximum limit which means that once they have paid out the annual amount they will not pay anything else for the remainder of the plan year.
There are also lifetime limits which like annual limits cap the amount paid on a policy for the lifetime of that policy. Some insurers will place maximum payout limits on procedures. These types of limits are often called a schedule of payments.
Tip: Even plans that state they cover up to 90% of claims can have maximum limits to cap the amounts they have to pay out. All limits should be stated in the policy.
7. Deductibles for Wellness Plans
Some plans will lump their wellness plans and sick/accident plans in one plan with the same deductible. If you have a healthy pet that only sees the vet for an annual check-up you may not exceed the deductible making the wellness portion of the plan useless.
8. Pre-existing conditions
All plans have limits on pre-existing conditions but how they are determined can vary from plan to plan. Make sure you understand what a pre exisiting condition is under the plan you are interested in. In some plans it may be a condition that was discover the plan year prior even though you are covered by the same insurer for both years.
The bottom line
Before purchasing any insurance plan ask for a copy of the policy. Then make sure you read and understand everything in the policy. If you don’t understand something, ask questions and get the response in writing.
For more tips on buying pet insurance check out my other posts:
- Is Pet Insurance worth it?
- Pet Insurance – 5 Ways to Find a Discount
- 9 Common Mistakes When Buying Pet Insurance
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