How Does Pet Insurance Work?
Pet insurance reimburses pet parents for covered veterinary expenses resulting from unexpected accidents and illnesses. You pay your veterinarian directly, submit a claim with documentation, and receive reimbursement for covered expenses based on your plan’s terms. Most plans can help cover unexpected events like injuries, diseases, and emergency care while excluding routine preventive services unless you add wellness coverage for an extra cost.
The pet insurance industry has grown significantly, with NAPHIA’s 2025 State of the Industry Report showing the U.S. market reached $4.7 billion in gross written premiums in 2024, a 21.4% increase from the previous year. This growth reflects pet parents’ increasing recognition that pet insurance helps provide financial protection against unexpected veterinary costs.
Key Pet Insurance Terms Explained
Understanding pet insurance terminology helps you compare plans and select coverage that fits your needs.
Premium
Your premium is the amount you pay to maintain coverage, typically billed monthly or annually. Premiums vary based on your pet’s age, breed, sex, location, and the coverage options you select. Younger pets and those with less breed-specific health risks generally have lower premiums than senior pets or higher risk breeds.
Deductible
The deductible is the amount you pay for covered services before your insurance begins reimbursing you for eligible expenses. Most pet insurance plans use annual deductibles that reset each policy year. Choosing a higher deductible lowers your monthly premium but increases your out-of-pocket costs when you file claims.
Deductible Type | How It Works |
|---|---|
Annual deductible | Satisfy this amount once per year before reimbursement can begin |
Per-incident deductible | Satisfy this amount for each new condition or injury once per lifetime |
Spot Pet Insurance plans have annual deductibles, which means a single deductible applies to all eligible claims within the policy year.
Reimbursement Rate
The reimbursement rate is the percentage of covered expenses your plan pays after you meet your deductible. Common options include 70%, 80%, and 90% reimbursement. Spot Pet Insurance offers reimbursement rates up to 90% of covered veterinary bills for eligible conditions.
Example calculation:*
Covered vet bill: $1,000
Annual deductible: $250 (already met)
Reimbursement rate: 80%
Your reimbursement: $800
Annual Limit
The annual limit caps how much your insurance reimburses per policy year. Some plans offer unlimited annual coverage, while others offer limits ranging from $2,500 to $30,000 or more. Higher limits offer more protection against expensive conditions like cancer treatment or emergency surgery.
Waiting Period
Waiting periods are the time between enrollment and when coverage becomes active. These periods help prevent fraud by ensuring pet parents don’t sign up only after their pet needs care. Waiting period lengths vary by coverage type, provider, and state regulations.
What Does Pet Insurance Cover?
Pet insurance plans vary, but most accident and illness policies cover unexpected health events that occur after enrollment and any waiting periods.
Typically Covered
Category | Examples |
|---|---|
Accidents | Broken bones, swallowed objects, cuts, car accidents, bite wounds |
Illnesses | Infections, cancer, diabetes, allergies, digestive issues, heart disease |
Hereditary conditions | Hip dysplasia, eye disorders, heart defects |
Emergency care | Hospitalization, emergency surgery, poison treatment |
Diagnostics | X-rays, MRIs, blood work, ultrasounds |
Treatments | Surgery, medications, chemotherapy, physical therapy |
Typically Not Covered
Category | Examples |
|---|---|
Pre-existing conditions | Any condition diagnosed or showing symptoms before coverage began, including during any waiting periods |
Routine/preventive care | Annual exams, vaccinations, dental cleanings (unless wellness coverage added) |
Breeding costs | Pregnancy, whelping, breeding-related conditions |
Cosmetic procedures | Ear cropping, tail docking, declawing |
Experimental treatments | Unproven therapies not generally accepted by veterinary medicine |
How to Customize Your Pet Insurance Plan
Spot Pet Insurance lets you adjust several plan components to balance coverage with cost.
Choosing Your Deductible
Lower deductibles mean higher monthly premiums but less out-of-pocket expense when you file claims. Higher deductibles reduce premiums but require more out of pocket costs before reimbursement can begin. Consider how often you expect to file claims and your ability to cover the deductible amount.
Selecting Your Reimbursement Rate
Higher reimbursement rates (90%) offer more financial protection but cost more in monthly premiums. Lower rates (70%) reduce premiums but leave you responsible for a larger portion of covered vet bills. Many pet parents choose 80% as a balance between protection and affordability.
Setting Your Annual Limit
Your annual limit should reflect potential worst-case scenarios. Cancer treatment, emergency surgery, or chronic condition management can quickly reach tens of thousands of dollars. Unlimited annual limits offer maximum protection at a higher premium, while lower limits reduce premium costs.
How to File a Pet Insurance Claim
The claims process at Spot Pet Insurance follows straightforward steps designed for quick reimbursement.
Step 1: Obtain Documentation
After your pet receives care, request an itemized, paid invoice from your veterinarian. This invoice should show each service performed, associated costs, and diagnosis information. Complete documentation can speed claims processing.
Step 2: Submit Your Claim
Spot Pet Insurance offers multiple submission methods:
Member Center Portal: Log in and start a new claim through the online dashboard
Mobile App: Upload invoice photos directly from your smartphone in the Spot App
Email: Send documentation to the claims department
Step 3: Claim Review
The claims team reviews your submission to verify coverage eligibility, apply your deductible and reimbursement rate, and calculate your reimbursement amount for the eligible expenses. They may request additional information such as medical records for new conditions.
Step 4: Receive Payment
Once approved, you can receive reimbursement via check or direct deposit. Most eligible claims are processed within a few business days of receiving complete documentation.
Advantages of Pet Insurance
Pet insurance can offer several benefits beyond simple cost coverage.
Financial Predictability
Converting unpredictable veterinary emergencies into predictable monthly payments helps pet parents budget effectively. Instead of facing a sudden $5,000 bill, you pay manageable monthly premiums with the confidence that major unexpected expenses can be partially covered.
Freedom to Choose the Best Care
When cost becomes a secondary concern, pet parents can make treatment decisions based on what’s best for their pet rather than what’s affordable. This freedom can often lead to better health outcomes and less stressful decision-making during emergencies.
No Veterinary Network Restrictions
Spot Pet Insurance allows you to use any licensed veterinarian in the U.S. or Canada. You’re not limited to specific clinics or required to stay within a network. Visit your trusted family vet, emergency clinics, or specialists without worrying about network status.
Coverage That Grows With Your Pet
Pets enrolled in Spot plans never age out of coverage. As pets grow older and health risks typically increase, pet insurance offers ongoing protection. Starting coverage early also helps ensure conditions that develop later in life are covered.
Considerations Before Enrolling
Pet insurance works best when you understand its limitations and plan accordingly.
Pre-Existing Conditions
Pet insurance cannot cover conditions that existed before enrollment or were diagnosed during any waiting periods. If your pet already has a documented health issue, that specific condition will be excluded from coverage. However, Spot Pet Insurance plans may cover curable conditions that have been treatment and symptom-free for 180 days, excluding knee and ligament conditions.
Waiting Periods Apply
Coverage typically doesn’t begin immediately after enrollment. Waiting periods vary by coverage type, provider, and state. Understanding these periods helps you plan enrollment timing.
Premiums May Increase
Pet insurance premiums typically increase as pets age because older animals often have higher healthcare needs. Rate changes may also occur due to inflation in veterinary costs or changes in your geographic area.
Frequently Asked Questions
How does pet insurance reimbursement work?
You pay your veterinarian directly for services, then submit a claim with documentation to your insurance provider. After reviewing the claim, the insurance company calculates your reimbursement by applying your deductible and reimbursement rate to covered expenses, then sends payment via check or direct deposit.
Can I use pet insurance at any vet?
Yes. Spot Pet Insurance has no veterinary networks. You can visit any licensed veterinarian in the U.S. or Canada, including specialists and emergency clinics. The reimbursement process works the same regardless of which veterinary practice you choose.
What percentage of vet bills does pet insurance cover?
Coverage percentages depend on the reimbursement rate you choose. Spot Pet Insurance offers reimbursement rates up to 90%. This percentage applies to covered expenses after your deductible has been met. Excluded items like pre-existing conditions or routine care aren’t included in the reimbursement calculation.
Is pet insurance worth the monthly cost?
Value depends on your financial situation and risk tolerance. Pet insurance can help provide peace of mind against unexpected veterinary emergencies. The AVMA reports that 6.4 million pets were insured in the U.S. by year-end 2024, reflecting growing recognition of pet insurance value among pet parents.
Does pet insurance cover dental work?
Standard accident and illness policies can help cover dental extractions resulting from unexpected accidents or illness. Routine dental cleanings and preventive dental care require adding wellness coverage to your plan.^
Key Takeaways
Reimbursement model: You pay your vet directly, submit a claim, and receive reimbursement for covered expenses
Customizable coverage: Choose your deductible, reimbursement rate (up to 90%), and annual limit to fit your budget
Broad coverage: Accidents, illnesses, hereditary conditions, emergency care, and more are typically covered
No networks: Use any licensed veterinarian in the U.S. or Canada without restrictions
Start early: Enrolling pets early, before health issues develop, helps ensure maximum coverage value
If you need a story or someone to talk to your cat like a person, I’m your person. With 3 cats, 1 dog, and a lifetime of pets, I write from experience, usually with a cat on my keyboard and a dog in my lap.
North American Pet Health Insurance Association. “State of the Industry Report 2025.” NAPHIA, 2025. https://naphia.org/industry-data/
American Veterinary Medical Association. “US Pet Insurance Industry Surpasses $4.7B in 2024.” AVMA, 2025. https://www.avma.org/news/us-pet-insurance-industry-surpasses-4b-2024
^Exam fees for wellness or annual exams are not covered unless you have purchased the optional preventive care coverage.
*Reimbursement amounts may vary depending on the specific terms of the policy, including coverage selected, annual deductible, reimbursement rate, and annual limit. Individual experiences and outcomes may vary.
