Pet insurance companies use multiple factors when setting their rates, including:
Type of coverage
One of the biggest factors determining the cost of pet insurance is coverage. For example, a comprehensive policy with an unlimited maximum payout that covers a range of treatments as well as routine care will cost much more than a basic accident-only policy.
Here are the types of pet insurance plans:
- Accident and sickness cover. This type of policy helps pay vet bills for unexpected incidents, such as a laceration from an accident, and illnesses, such as an ear infection or cancer. It also covers related costs such as diagnostic tests, surgeries, X-rays, hospitalization, prescription drugs, and emergency care. The plan may also include coverage for dental disease, alternative therapies, behavioral therapy and pet ownership benefits such as lost pet coverage.
- Accident coverage only. This type of policy covers certain medical expenses if your pet suffers an accident, such as a broken bone. Coverage usually also includes diagnostic tests, surgeries, X-rays, hospitalization, prescription drugs, and emergency care.
- Routine wellness plans. This type of policy covers medical expenses for medical examinations, flea and heartworm prevention, vaccinations and other routine annual care. These plans are usually add-ons but can be incorporated into more detailed accident and sickness plans. You cannot purchase a wellness plan on its own.
A deductible is the amount of money you pay out of pocket each year before coverage begins. Most insurance companies in Canada offer a $100 deductible. Some insurance providers, such as OVMA Pet Health Insurance, Pets Plus Us, Furkin, Trupanion and Fetch By The Dodo allow you to choose your deductible. The higher the deductible, the less you pay for pet insurance each month. You only pay your deductible once a year, unless you have an accident-only plan that provides a deductible for each accident.
Pet insurance policies are cost-reimbursement-based, which means you usually have to pay your vet upfront for your pet’s medical bills and then file a claim with the pet insurance company (Trupanion and PHI Direct can to pay your vet directly).
Most Canadian insurance companies offer a standard reimbursement rate of 80%, but Trupanion offers a 90% rate, while Pets Plus Us and Fetch By The Dodo let you choose between 70%, 80% and 90% rates. Pet insurance costs higher for better recovery rates. The amount you pay is called a co-insurance and you pay it with every claim.
Here’s how it works: Let’s say you have a pet insurance plan with a $200 deductible and an 80% reimbursement rate:
- If your pet has a medical procedure that costs $1,500 and it’s your first claim of the policy period, you’ll pay $1,500 to the vet first.
- Your coinsurance or the amount you pay is $300 or 20% of the bill.
- Your deductible is $200.
- Your insurer reimburses you $1,000 ($1,500 – $300 – $200 = $1,000).
If your pet has a second procedure the same year and it costs $1,000:
- You pay $1000 to the vet.
- Your coinsurance is $200.
- Your insurer reimburses you $800 because you already paid the deductible for the year.
Your pet’s breed is a factor in determining pet insurance costs. This is because some breeds are prone to disease, which usually results in more vet visits and higher medical bills. For example, some larger dog breeds are more prone to heart and hip problems.
Age of the pet
The age of the pet is another piece of the pet insurance price puzzle. As your pet ages, the chances of illness and injury increase, leading to higher pet insurance costs.
Your postcode can also affect your rate, as urban centers tend to be more expensive due to higher property values (and therefore rents or mortgage payments), higher insurance rates, better wages for staff and improvements access to state-of-the-art equipment and treatment options. For example, using a quote from PHI Direct, the cost to insure an eight-month-old miniature poodle for $5,000 coverage with a $200 deductible and 80% reimbursement is $47.22 in Vancouver, $26.68 in Toronto, and $19.47 in Halifax.