Why Pet Insurance Disappoints Many Owners (And How to Choose a Pet Insurance Policy That Really Helps)
People often market pet insurance as providing you with peace of mind. The idea seems simple enough; you pay a monthly premium to cover your pet, protecting you from having to eat large veterinary bills should your pet need veterinary care. Unfortunately, many pet owners only discover the true reality of their policy and how it is going to help (or not help) them when they file their first claim. They learn that the policy they thought provided them with financial protection does not cover what they thought it would cover, they will have to wait longer than they thought to get reimbursed, and/or there are a number of “pre-existing” conditions that will not be covered.
Having reviewed numerous pet insurance policies and seen a number of real claim situations being discussed among pet owners, one thing has become obvious. Pet insurance is NOT a scam; however, it is almost always misunderstood by pet owners. The reason for this misconception is usually attributed to having an unrealistic expectation or having little understanding of what a pet insurance policy actually covers.
This article will discuss the reasons pet insurance does not meet expectations, what types of pre-existing conditions will cause your claim to be denied, and provide guidance on how to choose a pet insurance policy that will provide you with assistance instead of disappointment at the time of making your claim.
The expectation gap that causes most problems
Many pet owners purchase pet insurance at a time when their pet is healthy and they are less stressed. In many instances, the decision to purchase the insurance will be made out of fear of some future emergency rather than an understanding of actually how pet insurance works in practice.
Insurers, including many well-known insurance companies, create and structure their policies to help manage risk, but not necessarily to eliminate that risk. The coverage is limited in many respects, there are many specific exclusions, and payment for medical treatment is dependent on appropriate documentation being provided by the pet owner.
The greatest discrepancy in pet insurance is between what the pet owner’s understanding of pet insurance and what the actual policy says about coverage.
Pre-existing conditions: the most misunderstood rule
Preexisting conditions are one of the most confusing and frustrating aspects of pet insurance. Many pet owners think that only severe diagnoses (such as cancer or heart disease) will qualify as a preexisting condition. However, insurance companies’ definitions of preexisting conditions are much broader than this.
For instance, if a symptom first appears on a veterinarian’s record before the policy starts, even if the symptom seems to be a minor one, it may lead to a denied claim in the future. An example would be an ear infection, gastrointestinal upset, or skin irritation; if viewed in hindsight, any of those three issues may be noted in the records before the policy effective date and later connect to a denied claim. When viewed from an insurance company’s perspective, this is a normal way in which they control their risk. Many times, when viewed from a pet owner’s perspective, it just seems unreasonable.
Because of the potential for misunderstanding the preexisting condition rule, some pet owners believe that they were misled, and even though it is usually stated in their policy documents, most pet owners fail to read or fully understand insurance company interpretations of medical histories.
Waiting periods quietly shape what gets covered
Delays in benefits coverage can be another area that people may overlook. For the most part, there is a delay between signing up for and starting coverage (example: Coverage typically will not go into effect until your pet has been insured for a certain amount of time): Occasionally there will be a delay on when coverage goes into effect for certain conditions (example: accident & illness; orthopedic). For example, a dog treated for minor allergies last year had future claims denied because the symptoms appeared in the vet record before coverage began
While there is a waiting period to have full coverage, if any medical symptoms were present during this period (i.e., if you take your pet to a veterinarian during this period), they can impact whether you can have coverage for them in the future if you later submit a claim for them.
This is the reason early enrollment is important. To maximize the value of insurance, it should be purchased before a pet has developed any health conditions instead of after a health concern has started to occur.
Based on my research of multiple pet insurance policies, I’ve observed that waiting periods often catch owners off guard.
Reimbursement is not the same as coverage
Many people think that if a treatment is covered by their pet insurance, the vet is paid directly by the insurance company. In most cases, this is not the way that pet insurance works.
Most owners will pay the vet before the vet provides any service, submit a claim for reimbursement after payment has been made, and then wait for reimbursement. The amount of reimbursement will be based on the deductible that is provided in your policy, the percentage of coverage, and the limits of your policy. So, just because you have a $2,000 bill does not mean that you will receive a $2,000 reimbursement.
This can lead to a lot of frustration after a stressful emergency once it becomes clear how the policy works, even though it technically worked; however, the emotional experience of using your insurance does not match with your expectations.
Why reviews alone can be misleading
When you look at insurance companies online, you will often see a wide range of experiences from different people. Some people will have great things to say about the speed of their reimbursement or having helpful customer support. Others will talk about being denied for claims and having a poor experience.
There is a possibility that both sides are correct in what they have to say about their experiences.
The outcome of your insurance claim will depend heavily on when you submit a claim, the medical history of your pet, the quality of documentation and evidence of loss you provide to the insurance company, and the selection of the policy that will be used for that claim. Therefore, two pet owners that have the same insurance company can have very different experiences based on these four factors.
This is why it is very risky to select insurance based on star ratings or “best of” lists. There is rarely enough detail in online reviews to explain why a claim was denied or approved.
The role of fine print in claim decisions
The fine print on pet insurance isn’t any different than the fine print on any type of insurance! It’s the emotional importance of pets as family members that make financial decisions related to their health, such as insurance, emotionally charged.
Policy documents spell out coverage limits, exclusions, waiting periods, and reimbursement rules. Most pet owners skim through them or rely on the summarized versions of the policy. The problem is that claims are decided based on the full policy document and rules, not summaries.
Knowing how the specific conditions are classified, how the renewals are going to affect coverages, and how the documentation will be reviewed will significantly impact the outcome of the claim.
When pet insurance genuinely works well
While there are many frustrations with pet insurance, if used properly it can be very useful.
Pet insurance generally works best when:
- the pet has been enrolled early
- the pet owner understands and takes into consideration the exclusions
- the owner’s policy was chosen based on long-term needs rather than short-term savings
- the pet owner’s expectations agree with how reimbursement will be made
In these cases, pet insurance can provide owners with less financial strain during emergency situations; and will allow them access to the treatment options that they may not have had otherwise.
Choosing a policy with realistic expectations
Pet insurance should be viewed as a way to protect yourself from financial shocks when something goes wrong with your pets.
It’s better to ask yourself the following questions than searching for the least expensive or the most popular policy:
- What are the most common conditions for the breed and age of my pet?
- How does the company handle pre-existing conditions or other medical history?
- How much can I afford to pay out of pocket before the insurance will kick in?
- How long will it take for the insurance company to reimburse me?
Insurance policies that provide answers to these questions tend to provide fewer “surprises” down the road.
Why some owners feel insurance “failed” them
Most times pet insurance does not technically fail, pet insurance fails at an emotional level.
When we, as pet owners, are at a point of high level of stress, we desire absolute certainty. Pet insurance provides you with conditional assurance, but not certainty. When we do not understand this prior to a claim being filed, we find disappointing that the insurance company did not provide us with absolute assurance.
By better understanding the limitations of your pet insurance policy, the emotional toll of being denied a claim will remain heavy; however, at least the amount of shock will be less.
A more honest way to think about pet insurance
Pet insurance does not guarantee you will get money back from your insurer after submitting a claim.
Think of pet insurance as a financial tool…it is most effective when used for its intended purpose. For certain pet owners, particularly those who have senior pets, or pets with known health conditions, this type of insurance may not provide much value.
In these scenarios, an owner may prefer to set aside savings for their veterinary bills.
On the other hand, for new owners or owners with high-risk breeds, pet insurance can provide peace of mind when utilized with clear expectations.
FAQ’s About How to Choose a Pet Insurance Policy That Really Helps
What does Lemonade pet insurance cover?
Lemonade typically covers accidents, illnesses, and certain treatments depending on the plan. Routine care and pre-existing conditions are generally not covered, so reviewing policy details is essential.
Are pre-existing conditions covered?
Most pet insurance providers, including Lemonade, do not cover pre-existing conditions. Any symptom or treatment noted before policy enrollment may be excluded from coverage.
How long is the waiting period for accidents or illnesses?
Waiting periods vary by insurer and plan. Typically, accidents have a short waiting period, while illnesses may require a longer period before coverage begins. Always check the policy details.
Can I file claims immediately after enrolling?
Claims for incidents that occur during the waiting period may be denied. It’s recommended to understand the waiting period and avoid non-urgent vet visits during that time.
Which pet insurance is best for senior dogs?
Senior dogs often have higher risk and may face exclusions. Policies from providers like Embrace, ASPCA, and Nationwide can offer coverage for older pets, but plan details must be carefully reviewed.
