What is Pet Insurance?

Full Definition

Pet insurance is a policy that covers some or all of the veterinary costs of treating an insured cat, dog or other pet for illness or injury, in return for a monthly or annual premium, and typically comes in one of four main types offering progressively broader protection. Accident-only policies are the most basic and cheapest, covering injuries but not illness; time-limited policies cover both accidents and illness but only for a set period (commonly 12 months) per condition, after which further treatment for the same condition is excluded; maximum benefit policies cover a condition for as long as needed but only up to a fixed total payout per condition, after which that condition is excluded from future claims; and lifetime cover, generally the most comprehensive and expensive, resets the claim limit each year and continues covering ongoing or recurring conditions for the life of the policy, provided it is renewed continuously without a break. Nearly all pet insurance policies exclude pre-existing conditions the pet had before the policy started or during any prior break in cover, and most include an excess (a fixed amount, and often also a percentage of the claim for older pets) that the owner pays before the insurer covers the rest, with premiums generally rising as a pet ages and its claims risk increases. Because switching insurer part-way through a pet's life usually means any conditions already treated become a pre-existing exclusion with the new insurer, many owners find it cheaper in the long run to stay with a lifetime policy from a relatively young age rather than repeatedly switching to chase a lower headline premium.

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