How Does Pet Insurance Work?

What’s a deductible? 🤔

dog and cat with question marks and plus signs

Maybe you’ve decided that you want to get pet insurance but have no idea how it actually works.

Well, you’re not alone. Insurance can be super confusing.

To help you out, The Dodo spoke to Dr. Aliya McCullough, a veterinarian for Fetch by The Dodo pet insurance, to find out what you need to know about how pet insurance works.

What is pet insurance?

Pet insurance will help you pay for unexpected vet bills, similar to how health insurance helps pay for your doctor visits. Pet insurance is typically used mainly for emergency vet visits, but there are some plans that cover preventative care (more on what pet insurance covers below).

And pet insurance can be particularly important if your pet comes down with a sudden illness or injury that you may not be able to afford treatment for on your own.

“The main benefit of having pet insurance is to provide a financial safety net and peace of mind,” Dr. McCullough told The Dodo. “Pet insurance empowers pet parents to choose the best veterinary care without compromising when their pet is sick or injured.”

(If you're looking for pet insurance, we love Fetch by The Dodo because it's made by and for adoring pet parents, and because it's the most comprehensive coverage in the U.S. and Canada, covering things that other providers don't or charge extra for.)

To understand how pet insurance works, there are a couple of terms to get familiar with: premium, deductible, reimbursement and limit.


Most insurance plans will have a monthly due that you’ll pay to keep your plan active, which is known as a premium.


You’ll also have a deductible, which is the amount you have to pay before the insurance company starts your coverage.

So if your deductible is $100, once you pay the $100, your insurance will be able to start paying for part of your bills.


Most insurance providers will pay you back for vet bills instead of directly paying the vet. So after your vet visit is over, you’ll pay the bill and submit a claim to your insurance company. Your insurance will then reimburse you for a certain amount, depending on your plan.

“After the deductible is met, a pet insurance policy covers a percentage of eligible medical expenses, generally between 70–90 percent,” Dr. McCullough said. “Some insurance companies allow pet parents to choose this percentage when they sign up.”

(If you have Fetch by The Dodo, for example, once a claim is approved, they’ll pay you back up to 90 percent of the bill via direct deposit.)


Your limit is the total amount that your insurance will reimburse you. Some plans have annual limits, and some can have per-incident limits, too.

An annual limit is the amount you can be reimbursed per 12-month period. If you reach that amount, you’ll have to pay for the rest of your pet’s veterinary care in full until the start of the next year.

A per-incident limit is the amount you can be reimbursed for an illness or injury, and it’s usually lower than your annual limit. So if your pet gets in an accident, your insurance will only cover up to a certain amount, even if your annual limit is higher (this typically isn’t the best option in case your pet needs expensive, lifesaving care).

Types of pet insurance

There are three kinds of coverage included in insurance plans — a given plan may include only one of these or up to all three, depending on how comprehensive it is:

  • Accident — “Accident-only policies typically only cover medical expenses related to an unexpected injury, such as when a pet swallows a foreign object (e.g., a sock), an insect bite or sting, a poison ingestion, or a broken bone,” Dr. McCullough said.
  • Accident and illness — “Most pet insurance policies cover new injuries and illnesses, including accidents,” Dr. McCullough said. “Insurance policies such as these are designed to cover a wide range of conditions, such as ear infections, diabetes, thyroid disease, cancer, arthritis, urinary tract infections and hip dysplasia.”
  • Wellness — “Wellness policies typically cover common routine and preventive care expenses, for example, vaccinations, fecal examinations, parasite prevention, routine lab work, such as heartworm and tick disease testing, spay and neuter surgeries, and preventive dental cleanings,” Dr. McCullough said.

What does pet insurance not cover?

None of these insurance plans cover pre-existing conditions, which include any illnesses or injuries that your pet has before your insurance coverage starts. So if your dog breaks his leg before your insurance kicks in, that would be considered a pre-existing condition, and the treatment wouldn’t be covered.

“Pet insurance typically does not cover pre-existing conditions, meaning medical conditions that occurred or showed symptoms before the date the policy took effect or during the policy waiting period,” Dr. McCullough said. “Some insurance policies will not cover preventive care, breeding or pregnancy costs, or cosmetic procedures, like ear cropping and tail docking.”

Because you won’t be able to get coverage for any illnesses or injuries your pet already has, it’s important to get pet insurance early so you’ll be prepared (that way you’ll be covered for any health issues they develop as they get older).

How much does pet insurance cost?

According to Dr. McCullough, the average cost of pet insurance for a dog is about $50 per month ($600 per year), and the average cost of pet insurance for a cat is about $28 per month ($336 per year). The actual premium you’ll pay will vary based on several factors.

(Fetch by The Dodo pet insurance only costs about $35 for dogs and $25 for cats on average, which makes it an affordable option.)

“Pet insurance premiums are based on the pet’s species (cat vs. dog), breed, age and location,” Dr. McCullough said. “The amount of coverage a pet parent chooses is also a factor in the cost of the pet insurance premium.”

Here are some factors that can affect your pet insurance cost:

  • The type of pet you have (dog vs. cat, for example)
  • Your pet’s breed
  • Your pet’s size
  • Where you live
  • Your pet’s age
  • The type of insurance plan you select
  • The insurance provider

What to look for when buying pet insurance

When picking an insurance plan, a good place to start is with your vet. They’ll be able to tell you which companies they work with and what types of plans might be a good fit for your pet, depending on his health needs.

Once you know which insurance companies your vet accepts, you can start researching companies.

“Compare the costs and policy terms and conditions for each company, making sure to look for comprehensive policies that include coverage for dental disease and injury for every tooth, chronic and hereditary conditions, alternative and holistic treatment, and prescription medications, including supplements,” Dr. McCullough said.

And while it might be tempting to go for the least expensive option (who needs more bills, right?), that might not be the best idea.

It’s more expensive to buy a wellness plan than a basic plan, but it may be a good idea if you need help paying for regular vet visits, which can get expensive when you consider the cost of vaccinations, heartworm medications and other preventative care.

Once you know which plans your vet accepts and what you want covered, you can compare pricing and coverage of plans. There are even websites that can help you compare so you can see what you’ll be getting.

So basically, when looking for a pet insurance plan, you should look for a few things: an insurance company that is accepted at your vet’s office, a reliable company and a plan that covers all your pet’s health needs.

Pet insurance will help you have the peace of mind that you can give your pet the best care possible when he needs it. It might take some research on your end, but it’ll be worth it!