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Americans love their pets. Take a stroll down the street and you’re bound to see someone walking their dog. Sites like Reddit are flooded with adorable cat photos. We are a society obsessed with animals.

Animals are big business. The American Pet Products Association (APPA) reported that Americans spent nearly $60 billion in 2014 on their pets. Of that, $15 billion was for veterinary care.

Your pet is like a child, it’s part of your family. When your pet gets sick, you take the necessary precautions that you would a human family member. Just like a child’s healthcare, pet healthcare isn’t cheap. A broken leg for a small dog can easily cost $700 or more for basic care. Surgery could cost thousands of dollars.

Unless you just sold your app to Google for millions of dollars, you’re like the vast majority of Americans that need help with your pet’s medical costs. Pet insurance is as necessary as human health insurance.

Here’s what you and your furry friend need to know about pet insurance.

3 Primary Types of Pet Insurance

Pet insurance can be broken down into three primary categories. Accident only, accident and illness, and accident, illness, and wellness. According to the North American Pet Health Insurance Association (NAPHIA), between 60-80% of pet owners opt for the accident and wellness option.

Your pet’s premium is based on several factors, including age, breed, and location to the nearest pet clinic. The average policy costs around $30-$35 a month. Again, this varies depending on what covered you opt for and what your pet’s prior health history is. A premium can go as low as $10 and upwards of a $100 a month.

How Pet Insurance Is Different Than Human Health Insurance

With human healthcare, individuals sign up for insurance and must find a healthcare provider within their insurance company’s network of healthcare professionals. There are no such networks for pet owners. Pet owners can visit any licensed veterinarian with their insurance.

In addition to no network, pet insurance requires the pet owner to pay all the fees upfront. Then the insurance company reimburses policyholders after vet services are rendered. This can include basic check ups to medication, to surgery. The cost of simple check ups run about $200 for cats and little more for dogs. Your pet’s medical care will slowly add up if you’re not insured.

Exclusions and Requirements

When you’re choosing your pet’s health insurance, make sure to read all the fine print. There could be exclusions in your policy that you think you’re covered for, but won’t find out until it’s too late.

For example, if you fail to insure your pet before it gets injured, then try to insure it, your pet will be considered having a pre-existing condition. There are two types of pre-existing conditions, curable and incurable conditions. A pre-existing condition could disqualify a pet from insurance or spike premiums. It’s up to the individual insurance providers.

Similar to human dental insurance, there are dedicated waiting periods. If you buy a policy for your pet today, and you try to take it to the vet tomorrow, you won’t be covered. You have to have paid into your insurance for a specific period of time before it goes into effect.

For example, a policy might take 24 hours to go into effect. Then there’s a fourteen day waiting period after the policy goes into effect, which the insurance company won’t cover an illness of your pet. Then there could be a six month exclusion for procedures like cruciate ligaments and patellas. This is why it’s so important to insure your pet as soon as possible.

Insuring your pet isn’t as expensive and complicated as yourself, but it’s just as important. It will give you peace of mind and save you money in the long-term. Make sure you know what to look for when choosing your pet’s health insurance.

Image Courtesy of Michael Gil

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