Looking For Pet Insurance

Dog at Vet

We mentioned the topic of insurance for pets to a non pet-owner and he laughed and asked why would need such a thing and said it seemed absurd. We don’t think he would be laughing if he got stuck with a $3,000 vet bill. Concerns over the pet food recall are also promoting pet owners to take another look. In fact, it’s already a big business in Europe, with 19% of pets covered in the UK and almost 50% covered in Sweden.

With the rising costs of veterinary services, a lot of pet owners are wondering if they should get pet insurance and just how it works. Don’t worry, you’re not in the minority — according to the ASPCA, less than 2% of pets are insured. What is a pet owner supposed to do?

We talked to two pet insurance companies: VPI Pet Insurance, a company that has been insuring pets for 25 years and has 440,000 policyholders, and Embrace Pet Insurance, a relatively new pet insurance company with just a thousand policyholders that is providing different coverage options and offers more customizable plans. We also contacted PetCare insurance, but our request was not returned.

After the jump, you will find a comparison of each company and useful terms and definitions.

Pet Insurance Definitions:

  • Pre-Existing Condition: Medical conditions that existed before the policy took effect.
  • Congenital or Hereditary Condition: Medical conditions that existed before birth or were passed on from the biological parents — not you.
  • Preventative Care: Annual check ups, exams and vaccinations.
  • Deductible: The portion of any claim that is not covered by the insurance provider.
  • Co-pay: A flat dollar amount paid for a medical service by the coverage holder.

VPI Pet Insurance:

VPI offers insurance for dogs, cats, birds and exotic pets. (Some examples of exotic pets that they cover are pot-bellied pigs, gerbils, ferrets, and iguanas. 83% of their policyholders are insuring dogs, 15% are insuring cats and 2% are insuring birds and exotic pets according to Brian Iannessa, VPI’s PR Supervisor.)

They promote two major plans: the VPI Superior Plan and the VPI Superior Plan plus Vaccination and Routine Coverage. The VPI Superior Plan protects pets from accidents, emergencies and illnesses. The Vaccination and Routine Coverage (VRC) supplement covers preventive care.

Congenital or hereditary conditions, like hip dysplaxia, are not covered under VPI’s insurance plan. Pre-existing conditions are also not covered. VPI’s insurance plans do cover drug or substance toxicity, so if a policyholder claimed vet bills due to a pet’s illness because of poison in tainted food, this would be covered.

Premiums are based on the species of a pet (dog, cat, bird, exotic pet), which plan that is selected, age of pet (older pets cost more to insure), and your location (prices vary slightly from state to state, about $1-$2 per month). The breed of your pet does not affect the price. Iannessa says that pet health insurance should not be viewed as an investment but more of a risk management tool to prepare pet owners for the unexpected. He also recommends that pet owners get insurance when pets are young to reduce to the risk of pre-existing conditions as the pet ages.


Embrace was launched in October 2006 “to modernize the pet insurance industry” by allowing pet parents to control and create their own policies. According to co-founders Alex Krooglik and Laura Bennett, Embrace gives pet owners a la carte options, so they can specifically customize and tailor their pet insurance plan to fit their budget. A pet owner can specify maximum cash outlay, deductible, co-pay, and optional coverage, so there are thousands of different combinations of plans. Currently, Embrace is not available in these three states: Oregon, Utah and Washington.

Premiums are calculated on where you live (since vet costs vary by your location, says Embrace), whether you have a cat or dog, your pet’s breed, your pet’s age and whether your pet is spayed or neutered. Embrace only covers cats and dogs at this point. Genetic conditions — including hip dysplaxia — are covered under all of Embrace’s pet insurance plans. Pre-existing conditions are not covered. Embrace has also processed a claim due to tainted food, so they will cover if policyholders have vet bills due to food poisoning.

Krooglik and Bennett both say that pet owners need to plan in advance. If you need pet insurance, it’s too late. When you buy insurance, you pass the risk on to someone else and you have the peace of mind that your pet can get the care that he needs and deserves without the need to make the hard choices based on finances.

Krooglik also offered some good tips of what to do with big vet bills if you have no pet insurance.

Here are ten questions that pet owners can ask when looking at pet insurance companies.

Ultimately, pet insurance is about making a decision that fits your life and a plan that is best suited for you, but it definitely is not a laughing matter.

22 Responses to “Looking For Pet Insurance”

  1. pat says:

    it’s bad enough that the insurance industry has invaded nearly every aspect of our lives, now they’re after our pets, too. if you want to see spiraling costs for vet bills, all you need to do is buy into the insurance game. vets will go the way that physcians and hospitals have gone, charging fees that no normal working person could ever expect to pay out of pocket, gouging the uninsured and cutting deals with insurance companies to settle for a fraction of what the supposed going rate is. it’s a mug’s game. yes, sometimes vet bills are high, but bringing the insurance industry into it will only make things worse for everyone… except the insurers, of course.

  2. Elderta says:

    I have VPI, and next year I am going to try and switch companies. They won’t allow for pre-existing conditions such as feline herpes or asthma. When I signed up earlier this year, I told the agent that my kitty had herpes and din’t ask me for her medical records, even though I asked them specifically if I should send them in since she had the herpes, and they said it wouldn’t be a problem. Once I sent in a claim for her asthma condition that was diagnosed later on, they told me they needed her records to verify her health. Once I sent the records in, they claimed that asthma was a pre-existing condition and that they wouldn’t cover it. I had them also for my Zanzibar, who died last year, and while they are ok, the whole thing with Paikea and the asthma irked me to no end. They won’t cover anything for her that deals with respiratory conditions, and to me, the agent who I first spoke to should have asked me to send in her pet records at the very get-go so that I wouldn’t feel like I’ve been had by an insurance company.

    Anyhoo… that’s my feelings about VPI.

  3. Elderta says:

    I don’t know… when I got the check for Zanzibar’s accumulated medical bills, it was darn helpful.

  4. Alex from Embrace says:

    @pat: You raise an interesting point about the potential impact of pet insurance companies on veterinary fees. In the UK where pet insurance is much more common (about 15% of pets have it) than here veterinary inflation is running at around 10% per annum. Here in the US veterinary inflation is around 6 - 7% per annum and that’s without any help from pet insurance (about 0.5% of pets here have it). There are many drivers of fees in both human and veterinary medicine and the presence of insurance is just one (albeit important) factor in pricing. Recent studies on the human side, for example, show that the rate of lumbar fusion surgery is 20 times higher in Idaho than in Maine (http://www.nytimes.com/2007/06/06/business/06leonhardt.html?_r=1&oref=slogin). It’s probably got little to do with insurance and certainly someone has to pay for these operations. When people demand care of a certain level then medicine, human or veterinary, responds. Cost follows but I would argue that it doesn’t lead. Bear in mind too that there is no “payer-provider” network in veterinary medicine, no HMOs, no PPOs. In my opinion I think veterinary medicine is unlikely to go down the same path as human although fees creeping up will continue to be a problem.

    @Elderta: I do think VPI could have been more upfront with you though and it sounds like their data collection fell short and you were overpromised and under-delivered. Not all pet insurance companies rest on their laurels like VPI.

  5. Linda says:

    I started VPI just before the pet food scandal began. Glad I did. It helped. My dog is recovering from tainted pet food, I might not get coverage on the struvite crystal issue, I think it might be related to pet food but indeed, it is considered pre-existing since she had it before being insured. It did help with all the viists with her GI problems, vomitting, trouble digesting food, when the groomer nicked her anal area, and God knows what else comes down the pike!@!!

  6. HomeGrown says:

    Veterinary Pet Insurance Ensures Animals Are Dead

    The Iams Company has an 8.9 percent ownership in Veterinary Pet Services, Inc., parent company of the Veterinary Pet Insurance Company (VPI), for a total investment of $6 million.


  7. Lynne says:

    One more voice against insurance here. People insurance is worthless enough. When I’ve had vet bills too high for me to pay all at once, they have always allowed me to make monthly payments.

  8. Bj says:

    They all have so many exceptions. . . not only pre-existing conditions but also anything which they think runs in your breed (i.e. they consider genetic). They can put a ton of things under this last! And also, many will not insure older pets if you did not adopt them and get them started when they were young.

  9. EmilyS says:

    In addition to all the exclusions, limitations and deductibles, pet insurance is expensive too! Better for all pet owners to start their own “health savings plan” for our pets.. so when we have a big bill, we’ve already saved for it. And if we don’t need it, we still have the money.

  10. Alex from Embrace says:

    @Lynne: If your vet is gracious enough to offer generous payment plans then take advantage of that for sure. Unfortunately we find that many of the most expensive claims happen on an emergency basis or at specialists and you may not have a relationship with these vets.

    @Bj: We get a lot of phone calls about this: no insurance of any type covers pre-existing conditions. The reason is simple - insurance is for unexpected things and, once something has happened, it is no longer “insurable.” You wouldn’t expect to buy auto insurance after you’ve had the accident. BTW, **Embrace does cover genetic conditions**.

    @EmilyS: I agree, it can be expensive but at the end of the day insurance is a transfer of risk from you to the insurance company. The more you pay, the more risk you are transferring. Our approach here at Embrace is to let *you* decide so you can build a policy to fit your own budget. We even offer major medical pet insurance. The pet insurance industry is growing up and there are solutions out there for savvy pet parents, take a look, I think you’ll be surprised.

  11. Becky says:

    I’m been thinking on and off about pet insurance…. My Rufus was diagnosed with cancer this year, and while I’ll gladly pay the costs to keep his quality of life high while I can, the insurance would have been nice….

    I like that Embrace covers genetic conditions - all my dogs are large or giant breed rescues. It’s just a matter of time before I adopt one that has joint problems severe enough to require surgery.

  12. Bj says:

    Embrace will not cover my dog as she is 8 years old and it says only accidents.

  13. Mikken says:

    Too many insurers insist on regular vaccination - which, imo, only causes more disease. I won’t submit to their idea of “health” for my animals, thanks.

  14. Alex from Embrace says:

    @Becky: Large breed dogs certainly are predisposed to musculoskeletal issues. We think pet insurance should behave like human health insurance in this regard and we’ve tried hard to build pet insurance that doesn’t leave you guessing about which genetic conditions, if any, are covered.

    @Bj - You are right. Unfortunately we are not able to offer illness insurance to new dogs over age 6 (purebreed) or age 8 (mixed breed). However any dog that enters prior to these age limits will continue to receive full coverage for the duration as long as they’re with us, no matter how old they are.

    @Mikken: Our philosophy on vaccinations is open-minded. We do not insist on them yearly but we do like to see “core” vaccinations started as puppies/kittens. Personally I’d rather see a pet receive his initial vaccination then a regular titer to determine whether he needs a vaccine top up. I think the AAHA Vaccination Guidelines for dogs(http://www.aahanet.org/About_aaha/About_Guidelines_Canine06.html)and ) and the AAFP Guidelines for cats (http://www.aafponline.org/resources/guidelines/2006_Vaccination_Guidelines_JAVMA.pdf) make a lot of sense and it seems that many veterinarians are coming to the same conclusion - it’s easy to over-vaccinate, less *can* be healthy too.

  15. elliott says:

    Alex From Embrace - can you give me a quote, or a site for one?

  16. Mikken says:

    Thanks for the reply, Alex from Embrace. While I disagree that titers provide any measure of true immunity (or that immunity can be “boostered”), I am pleased to hear that you are not pushing annual vaccinations. Most of us who adopt adult rescues are already dealing with so many vaccine-induced issues in these animals, there’s no need to add to them…ever.

  17. kaefamily says:

    How is a mutt’s age determined? Our little mixed breed terrier is from a kill pound. He is between 5 and 7 years of age depending on which vet he sees.

  18. Lynne says:

    Sorry, Alex but I still think all insurance is a scam.

  19. Alex from Embrace says:

    @elliott: The main article from the Itchmo blog has the link to the Embrace website, you can get a quote there.

    @kaefamily: Yours is a very good question! In the case of many purebred dogs the age is known precisely. But for a mixed breed that might have come out of a shelter we usually ask that the veterinarian take a best guess looking at teeth and overall condition of the pet (although I understand that new techniques involving retinal imaging can narrow the age band considerably). So for a dog estimated at between 5 and 7 then take the average - six years old.

    @Mikken: I agree, titers do not provide immunity. But at least armed with the information on antibody levels you & your vet can make an educated guess about your pet’s needs.

  20. e wem says:

    Somewhere I read people medical costs skyrocketing when Medicare started. Why charge $10 if Medicare will pay $20 for that procedure?

    I was shocked when my cat had a urinary blockage and every vet I called charged $95 exactly for the first x-ray. not 92 or 93 but 95. The vets had medical insurance booklets on display.

    That said, we get a lot more medical treatment for the money than we did in 1950. I felt my cats got better medical care then I got from my own doctors. That is a problem because the vets have such high standards they won’t lower them and it becomes all or nothing. If you dont have the bucks it is home remedies.

    I would love catastrophic coverage for my pets. Accidents, emergency surgery and hospitalization.

    The pet insurance sites are confusing to me. Even though I can’t buy insurance now due to financial setbacks, I would like to see a few simple clear examples of coverage. Like a chart that shows range of catastrophic premiums by state for cats and dogs of different ages, or breeds. A simple disclaimer like: we do not cover the following, and our reimbursements typically cover 30 percent of cost would give you something to go on.

    I don’t get life insurance quotes either because they want you to fill in an application and wait to be contacted by a rep. I can’t buy right now so I do not want to go there

    Since the vets have already pegged their charges to the insurance payouts, I think everyone getting a kitten or puppy ought to consider buying in.

    Why couldn’t pet insurers set up a catastrophic for old cats? Couldnt they set it up to pay out no more than a healthy young cat would get and exclude age related surgeries or extra hospital days? Old creatures have more complications, but at least it would get a broken bone set in a cast. My himi was 8 when she was rescued a few years ago. Old cats would thank you

    Now that I see IAMs is buying into VPI that is out. IAMs food poisoned my babies.

  21. Mo says:

    Just want to add my 2 cents as a vet insurance policy holder since 1998. There are some good arguments put forth here about the potential for the ins companies to raise rates, etc., if more people buy ins for their pets, but Alex addresses those questions well in that the vets aren’t connected to the ins companies and don’t answer to them. Although it’s possible that some vets will adjust their rates due to clients holding insurance policies, but those vets would never get my business again and they’d never lay a finger on any of my cats. It’s a free market - you’re not tied down to using a vet in the way we are so often tied to medical docs because of an insurance policy. Your vet works for your pet and for you. Period. There are plenty of caring and ethical vets that you can start using if yours isn’t satisfactory.

    I wouldn’t be surprised if the $95 x-ray charge was simply typically $95…which is why the insurance pays that amount, not the other way around. It’s unlikely that all the vets the poster spoke to just happened to adjust their rates to match the insurance company. Diagnostics such as xrays are pretty straightforward - you could call a nearby city and see what they charge.

    Regarding the post that states pet insurance is worthless: I’ve paid close to $40,000 in vet bills in less than 15 years, and 8 of those years I had insurance coverage which paid for a total of about $10-$15,000. I’d never consider asking my vet to allow me to make payments on those kinds of bills. With the insurance I’m able to make the best use of all the resources available to my cats…not only my vet’s skills (and she is THE BEST), but the fantastic specialists she’s referred me to when her specialty wasn’t enough. (I will spend the rest of my life paying off that $40K, in case it might appear that I’m wealthy or something…no such luck.)

    In terms of VPI, I have to say their customer service is hands-down the WORST. I’ve spoken with several other companies over the phone and without exception, they’ve all been polite, pleasant and helpful. I dread calling VPI for anything because (1) there’s almost always a very long hold-time, and (2) their service reps don’t seem to give a hoot. One girl told me that all heart disease was considered congenital so I didn’t submit claims for my cat for 2-3 years when he developed heart disease. One day I gave it a try, and the heart disease was covered (his wasn’t congenital)…I lost out on thousands of dollars in claims paid. They’re going to have to revamp their customer service to stay competitive.

    I want to look into Embrace but it’s not available in my state. I saw a post from Laura in another forum that indicated it’ll soon be available in the Northwest, so I’ll be checking back.

  22. Alex from Embrace says:

    @e wem: IAMS actually bought its stake in VPI back in 2003 I think, it was definitely a while ago. They own roughly 10% of the company IIRC. As for your point about catastrophic coverage, our company is the only one currently offering it with a $500 deductible. Sounds counterintuitive but the higher deductible drops the premium dramatically, often 30 - 50% versus a $100 deductible. I recommend anyone with insurance - homeowners, auto, whatever - get a high deductible if possible. Then you can use the insurance to cover you for the *really* expensive stuff, which is after all what insurance is about.

    @Mo: We got a lot of ex-VPI customers calling us these days. One person pointed out that ten years ago VPI did a great job and was very responsive but that nowadays they drag the chain on everything. We heard of one person today who waited 69 days for her claim to be assessed. Keep reading Laura’s blog for news of when we’ll be in your state!

E-mail It