How Pet Insurance Works
Pet insurance is actually quite flexible. All pet insurance companies in the United States permit you to visit any veterinarian in the country including general, specialist, and emergency veterinarians. Some pet insurance companies, including Embrace, will even cover you in Canada, Mexico, and other parts of the world when you are on vacation.
Insurance for your dog or cat is what is known as a indemnity insurance where you pay the claim up front and the company reimburses you after applying your deductible and co-pay, until you reach your policy's annual or lifetime maximum.
Step 1: Get a Policy
Most pet insurance companies will issue a new policy to pets aged 8 weeks to up to 8 or even 10 years old, sometimes older if your pet undergoes a medical exam. Usually there is a waiting period and some pre-existing conditions may be excluded temporarily or permanently from your policy.
Step 2: The Waiting Period
The waiting period is the time between when you first sign up for cat or dog insurance and when your full coverage kicks in. For example, if you sign up and begin coverage on March 1st then your waiting period for accidents may be two or three days after, say March 3rd, and for illnesses as long as 4 weeks later, say March 31st.
Most pet insurance companies have a waiting period of between 2 and 14 days for accidents and between 14 and 30 days for illnesses. The waiting period is there so that no one takes out insurance immediately after an accident or illness.
The waiting period only applies in your first policy year, after that there is no waiting period on your pet insurance.
Step 3: Making a Claim
Once you've gone to the veterinarian, you pay the bill and fill out a claim form that your veterinarian signs. You fax or mail this form in to the pet insurance company along with your paid and itemized veterinary bill.
Some pet parents wonder why the pet insurance company can't reimburse the veterinarian directly like in human health insurance.
The main reason is that pet insurance is a very, very small industry compared to human health insurance. The computer systems aren't in place that would allow direct reimbursement to the veterinarian and these networks are incredibly expensive to build.
However many companies, including Embrace, can and do make exceptions to this but these must be arranged between you, your veterinarian, and the pet insurance company on a case-by-case basis.
Step 4: You Receive Your Claim Check
Once you've sent in your claim form, it is assessed and you usually receive a check or direct deposit back into your account minus any deductible or co-pay that apply to your policy, until you reach your policy's annual maximum.
If you paid for additional coverages like routine care or prescription drugs then these will be reimbursed on your claim too according to your pet insurance plan's limits.
Why You Don't Need Routine Care Coverage
Routine care includes all those treatments and vet visits that you do every year for the benefit of your cat or dog's health. Most routine care coverage includes:
- Annual checkups
- Prophylactic teeth cleaning
- Spaying & neutering
Those that argue pet insurance should include routine care believe that it's not about money, it's about a hassle-free life. They don't want to worry about what is or is not covered, they just want to send in their veterinary bills. They pay a regular premium and, in exchange, everything is covered. What's not to like about that?
Then there are those that argue pet insurance should not cover routine care. They understand that insurance is for the unexpected things in life. These pet parents don't want pet insurance to pay for routine visits that are predictable because they know what insurance is for.
Ultimately when pet insurance includes routine care it ends up costing you more, in the form of higher premiums, than if you had just paid yourself. Why? Because insurance companies have overhead when processing a claim.
Just imagine how much more expensive car insurance would be if it included oil changes, tire rotations, and a checkup every 10,000 miles. The $300 to $400 that most of us pay for our car insurance every 6 months would probably double or triple. The same thing happens to pet insurance when it includes routine care.
Embrace strongly supports routine care for your pet, just not routine care coverage for pet insurance.
Coverage for Genetic Conditions
There are hundreds of genetic conditions that affect dogs and cats. Most pet insurance companies consider genetic conditions to be pre-existing and do not cover them. However, Embrace is one of the few companies that covers genetic conditions. Treating genetic conditions may involve drugs, for example NSAIDs to treat oesteoarthritis, or even surgery, say to treat cancer. This care can be expensive and having pet insurance that covers genetic conditions is an effective way to manage these unexpected costs.
Coverage for Pre-existing Conditions
In general, pet insurance companies exclude any health issue that appeared before the start of your policy, even if the condition has not yet been clearly diagnosed or is in remission. These exclusions may be temporary or permanent and some companies allow coverage for the condition to start again after an incident-free period of time has passed.
But it gets more complicated. At renewal, some companies reset the pre-existing conditions and cut off coverage for chronic illnesses. This coverage is less expensive than policies that cover chronic conditions as long as you continue to pay your premiums but might not be what you expected from your pet insurance policy.
Embrace will not cover health conditions that occurred during the year before your policy first started or chronic conditions you already knew about when you signed up. They may remove exclusions if the condition has not reappeared for a year, and also give you the option of choosing Continuing Care Coverage so that your pet is always protected against chronic conditions.
See some examples of how we handle pre-existing conditions.
All pet insurance plans have a waiting period, normally just when you first sign up. There is usually one waiting period for accidents and a separate one for illnesses although they both start at the same time. This prevents people taking out insurance just to make a claim and this makes it fairer for everybody that is insured.
Embrace has a 14 day waiting period for both accidents and illnesses, and a 6 month waiting period for cruciate ligament injuries. The waiting period for cruciate ligament injuries can be shrunk to 14 days if you provide a letter from you veterinarian that shows your pet currently has no cruciate injury. There is no waiting period when your policy renews.