What Is Pet Insurance and How Does It Work?

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Key takeaways

• Pet insurance helps cover unexpected veterinary expenses related to accidents and/or illnesses
• Most plans reimburse you after you pay the veterinarian and submit a claim 
• Coverage, deductibles, reimbursement rates, and annual limits vary by plan
• Pre-existing health conditions and routine care are generally not covered
• Cost depends on your pet's age, breed, state, and selected coverage

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‍Table of contents

• What is pet insurance?
• How does pet insurance work?
• What does pet insurance cover?
• What doesn’t pet insurance cover?
• How much does pet insurance cost? 
• Is pet insurance worth it?
• Why pet parents choose Wishbone
• Pet insurance FAQs  

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Pet insurance might not be something you think about until you need it, but pet parenting doesn’t come with a crystal ball. One day, your pet is chasing a toy across the living room. The next day, you could be sitting in an emergency veterinary clinic wondering how that toy made it from the living room floor to an x-ray.

Modern veterinary medicine gives pets more options than ever when they’re sick or injured, but advanced diagnostics, treatments, and care add up quickly, turning an already difficult moment into a financial one, too. Pet insurance exists for unexpected moments like these but between endless plans, confusing jargon, and extra-fine print, knowing where to start can feel like its own emergency.

This guide takes it back to basics, covering what pet insurance is, how it works, what’s covered, and whether it's worth enrolling your pet in.

First: What is pet insurance?

Pet insurance is a safety net plan that helps cover the cost of veterinary care in the case of illnesses or injuries. You pay a set amount each month to keep the plan active, and when something unexpected happens, the plan steps in to help with the vet bills.

Why enroll your pet in an insurance plan 

Pets have a way of keeping life unpredictable. Veterinary care for a sudden accident or condition can require diagnostics, medications, or treatment that cost much more than a routine visit. 

Instead of facing the full cost of an unexpected veterinary bill on your own, you can have a plan in place to help with eligible expenses. That can make an uncertain moment feel a little more manageable and offer more room to focus on your pet’s care.

With pet insurance, pet parents can:

• Feel prepared for unexpected veterinary costs before they happen
• Say yes to recommended treatments without financial hesitation
• Make care decisions based on what their pet needs, not what they can afford
• Seek professional care confidently, knowing support is in place

Pet insurance terms to know 

Pet insurance comes with its own language, and understanding common terms makes it a lot easier to compare plans and choose the right coverage for your pet.

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Pet insurance terms

• Premium :: The monthly or yearly amount you pay to keep your plan active
• Deductable :: The portion of a bill you pay out of pocket before your insurance begins covering costs
• Reimbursement rate :: The percentage of covered costs your plan pays back after your deductible is met (e.g. 70%, 80%, or 90%)
• Annual limit :: The maximum amount your plan will reimburse in a year
• Waiting period  :: The amount of time between when your plan becomes active and when coverage for a specific condition begins (e.g. accident, illness, and orthopedic conditions) 
• Pre-existing condition :: An illness, injury, or related condition your pet had before coverage began

How does pet insurance work? 

Pet insurance works a little differently than human health insurance. In most cases, there's no insurance card to hand to the veterinarian and no direct billing between the provider and the practice. Instead, pet parents pay for care at the time of the visit and submit a claim to be reimbursed for covered costs afterward. Here’s what the full process looks like from enrollment to reimbursement.

‍Step 1. Choose a compatible plan 

The type of pet insurance plan you choose, along with factors like your pet's age, breed, and location, all shape what your plan covers and what it costs. 

Before enrolling, make sure your pet meets the plan’s eligibility requirements, which may include age minimums and limits, species and pre-existing health condition restrictions, and state availability. Some providers may also request an exam or medical records before enrollment.

The first decision is choosing the type of protection your pet needs. Most plans fall into one of two categories.

‍Types of pet insurance

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Types of pet insurance

• Accident & illness plans :: Comprehensive coverage for unexpected injuries and illnesses, typically at a higher monthly premium‍
• Accident-only plans :: Partial coverage for unexpected injuries only, typically at a lower monthly premium

Step 2. Customize your policy 

Most pet insurance providers let you customize your coverage by adjusting your deductible, reimbursement rate, and annual limit. These choices can help balance what you pay each month with what you may pay out of pocket when your pet needs care.

Generally, a lower deductible or higher reimbursement rate generally means paying more each month, but you get more back later. A higher deductible or lower reimbursement rate can mean a lower monthly premium, but you may pay more of the veterinary bill yourself.

You’ll be able to customize your policy after receiving your quote during enrollment.

Step 3. Pay a premium to keep your plan active

Once enrolled, you’ll pay a monthly or annual premium to keep your pet insurance plan active. How much you pay depends on the type of coverage you chose and how you customized your policy.

Keep in mind that coverage might not begin immediately. Most plans have waiting periods before certain types of care are eligible for coverage. For example, a plan may have one waiting period for accidents and longer one for illnesses, so an illness that comes up during the waiting period may not be covered.

Step 4. Visit the veterinarian and pay upfront

Unlike human health insurance, most pet insurance plans don’t require you to visit an in-network clinic. You can generally choose a veterinarian you prefer, giving you the flexibility to seek immediate care for your pet.

At the time of the visit, you’ll pay the bill in full and keep your receipt and other relevant records. You’ll use these documents when you submit your claim for reimbursement.

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🐾  Pet parent tip

You don’t have to wait for reimbursement to save on your pet’s care. Wishbone Insurance members get 25% off eligible services when you visit one of 2,000+ in-network veterinarians nationwide, giving you instant savings at the time of care.

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Step 5. Submit a claim and get reimbursed

After paying your veterinarian, you’ll submit a claim to your pet insurance provider for the care you received. Depending on the provider, you may be able to file online, through a mobile app, by email, or another available method. You may also need to provide your veterinary bill, receipts, or medical records, so keep your paperwork from the visit.

Your insurance provider will review the claim and determine how much is eligible for reimbursement. If approved, you’ll receive reimbursement by direct deposit or check, although the timing and payment options vary by provider.

With reimbursements often arriving within days of filing a claim, pet insurance can help make unexpected veterinary costs more manageable.

What does pet insurance cover? 

Pet insurance is designed to help with the cost of unexpected veterinary care when your pet is injured or becomes sick. It’s important to remember that coverage generally applies to injuries and illnesses that occur after your coverage begins and waiting periods have passed.

Covered care includes services needed to diagnose and treat accidents or illnesses, such as diagnostic tests, hospitalization, surgery, and medications. The specific accidents and illnesses covered depend on the plan you choose. 

Here are some examples of accidents and illnesses that are often covered by pet insurance:

Examples of covered accidents

• Broken bones & fractures
• Cuts, wounds, lacerations
• Foreign object ingestion
• Eye, ear & dental injuries
• Toxic ingestion or poisoning

Examples of covered illnesses

• Infections & allergies
• Digestive disorders
• Cancer & tumors
• Diabetes & hormonal conditions

What doesn’t pet insurance cover?

Just as important as knowing what pet insurance covers is understanding what it doesn't. Most pet insurance plans are designed for accidents and illnesses, so routine care, elective procedures, and other expenses that fall outside that scope may not be eligible for reimbursement.

Specific exclusions vary by provider and policy, so always check the terms of your plan before assuming a particular service is covered.

Examples of care that aren’t typically covered

• Annual wellness exams
• Routine dental care
• Routine vaccinations & bloodwork
• Flea and tick prevention
• Grooming
• Elective or cosmetic procedures

Coverage for pre-existing health conditions 

Pet insurance generally doesn’t cover conditions that showed signs, symptoms, or received treatment before your coverage began or during any waiting periods. These are known as pre-existing conditions.

For example, if your dog was diagnosed with allergies before you enrolled, treatment related to those allergies may not be eligible for reimbursement. The same may apply to conditions that showed symptoms or required veterinary care before enrollment, even if they were not formally diagnosed at the time.

This is one reason enrolling your pet before health issues arise can give you more options for future coverage.

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🐾  Pet parent tip

Looking for support with routine care? Wellness plans help cover services like annual checkups, vaccinations, and dental cleanings, and can be paired with pet insurance for more complete coverage.

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How much does pet insurance cost? 

Pet insurance doesn't have a single price tag.  The cost depends on a combination of factors, most determined by your pet and where you live, and others within your control, such as the plan type and coverage you choose. Understanding what drives that cost makes it easier to find a plan that fits your budget.

Factors that determine cost 

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Factors that determine cost

• Plan type :: Accident and illness plans carry a higher premium than accident-only plans
• Plan customization :: A lower deductible, higher reimbursement rate, and higher annual limit all increase your monthly premium
• Pet age :: Premiums typically increase as pets get older
• Breed :: Certain breeds are predisposed to health conditions, which can affect pricing 
• Location :: Premiums reflect the average cost of veterinary care by region 

The average cost of pet insurance 

The average cost of pet insurance for dogs is about $70 per month ($836 per year), and $36 per month ($435 per year) for cats. Your actual premium will vary based on the factors above. The best way to know what you'll pay is to get a personalized quote based on your pet's details.

While you never may be able to predict the cost of an unexpected vet bill, your monthly premium and reimbursement rate are fixed to help you plan around what you can’t foresee.

‍Sources: NAPHIA

Is pet insurance worth it?

Whether pet insurance is worth it depends on your pet, budget, and how you want to handle unexpected veterinary expenses. For some pet parents, paying a monthly premium provides valuable peace of mind. For others, having dedicated emergency savings set aside feels like enough.

The important thing is understanding what you’re paying for. Pet insurance isn’t designed to make every veterinary expense cheaper; it’s designed to help offset costs, so you’re not facing the full financial impact of an accident or illness on your own.

Pet insurance may be especially worth considering if:

• Your pet is young, active, or has a talent for getting into trouble
• Your pet's breed is predisposed to costly health conditions down the road
• Your pet is entering their senior years with increasing health needs
• An unexpected vet bill of over $1,000 would be a financial stretch

Ultimately, the question may not be whether you’ll get more money back than you spend. It’s whether having coverage would change how you show up for your pet when they need care the most.

Why pet parents choose Wishbone Insurance

Pet insurance is about having a plan in place when your pet needs care, but the value of a plan goes beyond what happens after you file a claim. What you pay along the way and the support you have before and after a visit can all make a difference.

Wishbone Insurance provides comprehensive coverage for accidents and illnesses for dogs and cats, with exclusive features designed to give pet parents more flexibility, savings, and support in unexpected moments. Rather than waiting for reimbursements to feel the benefit of coverage, members get a 25% discount applied to eligible in-network services, with a bonus 10% reimbursement. 

With Wishbone, pet parents pay less out of pocket and get more back than standard pet insurance.

Wishbone Insurance at a glance 

How it works 

Visit any licensed veterinarian in the U.S., its territories, or Canada for care.

What makes it different

In-network visits get an instant 25% discount on eligible medical services, plus an additional 10% bonus reimbursement.

What’s covered

Coverage for accidents and illnesses include emergency care, hospitalization, diagnostics, surgery, medications, chemotherapy, and end of life care. 

Extra plan benefits 

Every plan includes unlimited access to 24/7 virtual and lost pet recovery & ID tag at no additional cost. 

How to enroll in Wishbone Insurance   

Wishbone Insurance is available as a workplace benefit. Premiums are personalized based on your pet's age, breed, and location, so the best way to see what coverage looks like for your pet is to request a quote.

Use the employer finder tool to see if your employer offers Wishbone and get started.

Wishbone Insurance FAQ

Do you have to pay upfront with Wishbone Insurance? 

Yes, you pay the bill at the time of your visit, then submit a claim to be reimbursed afterward. With Wishbone Insurance, members who visit an in-network veterinarian receive a 25% discount applied at the visit, reducing what you pay before reimbursement.

How do I find an in-network veterinarian?

Search Wishbone’s network directory for participating in-network veterinarians by zip code or practice name.

Is pet insurance worth it if my pet is healthy?

Yes, a healthy pet today can still face an unexpected accident or illness tomorrow. Enrolling before conditions arise ensures coverage is in place so that you’re protected if and when something does come up. 

Can I use Wishbone Insurance at any veterinarian? 

Yes, Wishbone Insurance covers accident and illness care at any licensed veterinarian in the U.S., its territories, and Canada. 

Is it too late to enroll after my pet gets sick or injured?

You can still enroll, but the condition will likely be considered pre-existing and treatment would likely be excluded from coverage.

How long does it take to get reimbursed?

Reimbursement timelines vary based on the services received. Submitting promptly with complete records from your visit helps move the process along, which can take as little as 24 hours.