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How Does Dog Insurance Work?

Published: February 2017

For many people, a dog isn't merely a pet — it's a member of the family. But if your pet falls ill or becomes injured, the veterinary expenses can weigh on your family's finances.

Pet insurance may help dog owners better manage these expenses. Just as with "people" health insurance, pet insurance for dogs comes with different plans, policy features and price factors to consider. Some providers may offer a discount for enrolling more than one dog in a policy.

Here's what you may want to keep in mind about how dog insurance works.

Young woman holding puppy.

Types of Pet Insurance Coverage

Plans are available to cover a wide spectrum of pet health-care needs, such as:

Coverage for accidents and illnesses: This type of policy covers worst-case scenarios, such as poisoning, dental trauma and illnesses, including cancer. The Insurance Information Institute (III) advises consumers to check if a policy covers breed-specific conditions, such as hip dysplasia common in bulldogs and other large breeds. Some policies exclude dogs with pre-existing conditions, according to the III.

Wellness coverage: This type of plan addresses the "basics" behind most routine vet office visits: vaccinations, dental work and tests, according to the North American Pet Health Insurance Association (NAPHIA). Some well-care plans may have no or low deductibles for these preventive services.

Prescription coverage: These plans may help cover out-of-pocket prescription expenses for your dog. For example:

  • A round of antibiotics
  • Medication for a chronic condition like asthma
  • Medication to treat a serious illness, such as cancer

Comprehensive coverage: A comprehensive plan will likely include the above coverages, plus extra services. For example, some insurers may cover alternative therapies (acupuncture, chiropracture, etc.), prosthetic limbs, visits to a veterinary emergency hospital and consultations with specialists.

Policy Features

Several features of pet insurance will sound similar to "human" health insurance policies. For instance, pet insurance policies typically include:

  • Premiums, or the amount you pay for coverage
  • Deductibles, your out-of-pocket expense toward a covered claim before insurance benefits are applied
  • Coverage limits, the maximum amount your policy will pay toward a covered claim
  • Waiting period, meaning coverage does not begin for your pet until a specified period of time after you buy a policy

But, there also are a couple of key differences to keep in mind:

Pet insurance policies typically pay claims on a reimbursement basis. Pet owners usually pay a veterinarian's bill at the time of service and then file for insurance reimbursement afterward, according to the American Veterinary Medical Association. Reimbursement for covered treatments will kick in after you've met your deductible.

Pet insurance companies reimburse for claims in different ways. According to the National Association of Insurance Commissioners (NAIC), reimbursement amounts may be based on:

  • Amount spent by the policyholder: The insurer pays a set percentage of the total bill
  • Schedule of benefits: The insurer pays a set price for a given treatment
  • Schedule of usual, customary and reasonable charges: Bases reimbursement on the average cost for common services in the policyholder's area

Read the fine print to figure out which reimbursement method your pet insurance policy follows.

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Price Factors

Insurers evaluate a number of factors to price their policies. According to the NAIC, insurers will look at:

  • Your dog's age
  • Your dog's breed
  • Where you live
  • The coverages you select
  • The deductible you choose

You can typically adjust the deductibles, coverage limits and reimbursement percentages on your policy. That way, you can reach a policy premium that will make you comfortable not only about your budget but also about the coverage your policy provides for your four-legged family member.

By understanding the insurance options for your dog, you can find the pet insurance plan that works best for your entire family.



Pet insurance policies are underwritten by American Modern and offered under an Expanded Market Program. American Modern is not affiliated with Allstate.

The Expanded Market Program provides access to products underwritten by non-Allstate companies. Allstate does not operate or control any company that provides policies through this program. In this program, Allstate does not have any financial responsibility to you for any policy purchased, is not responsible for any claims you may make with such companies, and makes no representations nor accepts any liability related to the operations of such companies, including, but not limited to, their financial condition and claims handling.

ECC Monitor: OK