Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!
What Is Pet Insurance and How Does It Work? (2025 Guide)
December 12, 2024
Pet insurance is basically health insurance for your pet. If your furry friend gets sick or injured, a pet insurance plan helps pay for the vet bills. In this beginner’s guide, we’ll break down what pet insurance is, how it works, and what to consider if you’re thinking of getting coverage in 2025.
With vet care costs on the rise – and 1 in 3 pets needing emergency vet treatment each year – understanding pet insurance can save you from tough financial situations while keeping your beloved pet healthy.
How Pet Insurance Works (Basics)
Pet insurance works on a reimbursement model: you typically pay the vet bill upfront, then file a claim to get paid back a portion. Here’s a step-by-step of how it works:
- Pay a Premium: You pay a monthly or annual premium to keep the policy active. The average cost in 2025 is about $50–$60 per month for dogs and $30–$40 for cats, though this varies.
- Visit Any Vet: Unlike human health insurance, there are no networks – you can visit any licensed veterinarian. This is because pet insurance reimburses you, not the vet directly.
- Meet the Deductible: Most plans have an annual deductible (e.g. $200) – the amount you pay out-of-pocket each year before insurance kicks in. Some plans offer choices for higher or lower deductibles.
- Claim and Reimbursement: After paying the vet, you submit a claim (often online or via an app). The insurer reviews it, and if approved, reimburses you a percentage, typically 70% to 90% of covered costs.
- Coverage Limits: Many policies have an annual limit (like $5,000 or even unlimited) on how much they’ll pay per year. A few may also have per-incident or lifetime maximums. Choose a limit that covers worst-case scenarios (some surgeries can cost $5,000+).
What Does Pet Insurance Cover?
Most pet insurance plans cover unexpected injuries and illnesses. This typically includes:
- Accidents: Broken bones, bite wounds, ingesting something toxic, etc.
- Illnesses: From common infections or diarrhea to serious diseases like cancer.
- Hereditary Conditions: Many plans cover breed-specific issues (like hip dysplasia or heart conditions) if the policy is in place before symptoms appear.
- Diagnostics and Treatment: X-rays, blood tests, surgeries, hospital stays, medications, and even cancer treatments are usually covered if related to a covered condition.
- Emergency Care: ER visits and specialist care (e.g. seeing a veterinary dermatologist or surgeon).
Importantly, coverage kicks in only for conditions that arise after you’ve purchased the policy. Any health issue your pet already had before enrolling is considered pre-existing and won’t be covered by any pet insurance (this is a universal rule).
Kudos simplifies comparing auto insurance rates, quickly finding the best rate tailored for you. It’s easy and completely free. While you safeguard your pet’s health, let Kudos help safeguard your ride with cheaper insurance – freeing up more money for pet care!
What’s Not Covered
Pet insurance is mainly for unforeseen problems – it doesn’t usually cover routine or preventive care by default. Expect the following to come out-of-pocket (unless you add extra coverage):
- Routine Wellness: Annual exams, vaccines, spay/neuter, teeth cleaning, and flea/heartworm prevention are typically not covered under standard plans. Some insurers offer wellness add-ons for an extra fee to cover these.
- Pre-Existing Conditions: Any illness or injury noted before coverage starts (or during a waiting period) is excluded. If your dog has an existing allergy condition, insurance won’t pay for related meds or vet visits.
- Breeding/Pregnancy: Care related to breeding or pregnancy is often excluded.
- Cosmetic or Elective Procedures: Things like ear cropping, dewclaw removal, or non-necessary procedures aren’t covered.
- Certain Behavioral Treatments: Some plans exclude behavioral therapy or training unless specifically added.
Always check each policy’s list of exclusions. They can vary – for instance, one plan might cover hereditary conditions, while another might not. A good plan is one that’s comprehensive for accidents and illnesses, which is the focus of most pet owners.
Types of Pet Insurance Plans
Not all pet insurance is one-size-fits-all. There are a few types of plans you’ll encounter:
1. Accident-Only Plans
These cheaper plans only cover injuries from accidents (like broken legs or ingestion incidents). Illnesses (like ear infections or cancer) are not covered under accident-only plans. These are budget-friendly but limited.
2. Accident & Illness Plans
The most common type – covers both accidents and illnesses, from minor ear infections to major surgeries. This is the broadest standard coverage and what most people think of as “pet insurance.”
3. Wellness Add-Ons
As mentioned, routine care isn’t standard, but many insurers let you add a wellness package to help pay for vaccines, dental cleanings, etc. This increases your premium but can be worth it if you want predictable coverage for routine care.
3. Comprehensive (Illness, Accident + Wellness)
A few companies offer full-scale plans that bundle illness/injury coverage with wellness in one package. Ensure it’s cost-effective – sometimes bundling is pricier than it’s worth, so compare the standalone costs.
For beginners, an Accident & Illness plan is usually the best value because it covers the scenarios that could otherwise cost you thousands. You can always pay routine care out of pocket or add wellness coverage if you find the extra cost worthwhile.
Why Consider Pet Insurance?
Veterinary care costs are rising every year. Advances in vet medicine mean better treatments for your pet – but also bigger bills. Here are a few reasons pet insurance has grown in popularity:
- Expensive Emergencies: A single emergency surgery (e.g. for swallowing a toy or a car accident injury) can cost $3,000 to $5,000+. Pet insurance would reimburse a large chunk of that, saving you thousands.
- Chronic Conditions: If your pet develops a chronic condition (like diabetes or allergies), ongoing treatment and meds add up. Insurance helps cover those lifelong needs, as long as the policy was in place before it developed.
- Budgeting and Peace of Mind: Rather than worrying about how you’d pay a huge vet bill, you pay a predictable monthly premium. This trade-off provides peace of mind that you can always choose the best care for your pet, without hesitation.
- Discounts for Multiple Pets: If you have more than one pet, many insurers offer a multi-pet discount, making it more affordable to insure additional pets. This can be a motivator if you’re on the fence for a second or third furry family member.
- Pet Demographics: Younger pets can get covered at lower cost with few exclusions, and then stay covered as they age. Getting insurance while your pet is a healthy puppy/kitten ensures even if they develop issues later, those will be covered.
Of course, everyone’s situation is different. Pet insurance isn’t mandatory for being a good pet parent – but it can be a lifesaver in specific situations. It turns an unpredictable, large expense into a manageable monthly bill.
Getting Pet Insurance: What to Expect
If you decide to get pet insurance, here’s what the process looks like and some tips for first-timers:
Enroll Early
You’ll provide your pet’s basic info (age, breed, medical history). The younger your pet, the lower the premium usually. Puppies and kittens from 8 weeks old can be enrolled with most companies. Some companies have upper age limits (often around 8-14 years for first-time enrollment), though others have no age cap. It’s wise to enroll before your pet hits senior years to avoid issues.
Waiting Periods
All policies have waiting periods – short initial periods after you buy during which claims aren’t covered. Commonly ~14 days for illnesses, a few days for accidents. Certain conditions like cruciate ligament issues might have longer waiting periods (e.g. 6 months). This prevents people from buying insurance after an issue is diagnosed. Plan ahead; you can’t use insurance for an illness that started yesterday.
Choosing Deductibles and Reimbursement
Many insurers let you customize your plan. A higher deductible (you pay more upfront) and lower reimbursement percentage (they pay maybe 70% vs 90%) will lower your premium. Choose an amount that fits your budget. On the other hand, if you want nearly everything covered, pick a low deductible and high 90% reimbursement (just know you’ll pay more each month for that richness).
Claims Process
Modern pet insurance is pretty user-friendly. Filing claims can often be done through a mobile app by snapping a photo of the vet invoice. Reimbursement by direct deposit can happen in a week or two for many providers. Some insurers even pay the vet directly in certain cases. As a new user, check reviews for how quick and hassle-free the claims process is for the insurer you choose – that’s a big part of the experience.
Conclusion: Pet Insurance as a Safety Net
Pet insurance isn’t about “making money” – in fact, you hope you never have to use it (meaning your pet stays healthy!). It’s about protection. For a manageable fee, you get the ability to say “yes” to important treatments without dreading the cost.
In a world where a pet’s hospital stay can rival a human’s in expense, having insurance can be the difference between optimal care vs. tough choices. Only about 2% of pets in the U.S. are insured so far, but that number is growing as vet costs climb and pet parents seek peace of mind.
As a beginner, take your time to research about different insurance policies, cards that can be of use (such as the Nibbles Rewards Credit Card) and get quotes. This guide gave you the groundwork on what pet insurance is and how it works.
Double the Cash, Zero the Worry
Looking for consistent rewards without the hassle? The Citi Double Cash® Card rewards you twice: 1% when you buy, another 1% when you pay—for a total 2% cash back on every purchase with no categories to track. Plus, smart balance transfer options help you take control of existing debt. Simple, powerful, perfect for today's savvy spenders.
Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
