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Part 4. Value Shopping Pet Insurance Policies

This is the fourth of a five-post client information series Brownsburg Animal Clinic is offering on pet insurance—part of our Pet Care Costs collection of posts and pages to help you manage the costs of pet ownership more effectively. As they describe step-by-step processes, we suggest you read the Pet Insurance posts in order from first to fifth.

September is National Pet Health Insurance Month, and if you’re following our pet insurance series as we publish it and acting on our advice, you should be able to finalize your policy purchase before the month is out.

If you’re discovering these weekly posts after the original publication dates in August and September 2023, we recommend you read them in sequence and follow the process we suggest reasonably closely and in order. 

By the time you arrive here, at the value-pricing stage, you’ll be just a few steps away from choosing your policy. 

Are You Ready to Value-Shop?

If you’ve been following our recommended process and haven’t yet bought a policy—and we hope you haven’t—you should prepare now to make truly meaningful comparisons between the three to five policies you’ve identified from your chosen insurers as the closest matches to your priorities and  preferences. 

If you skipped our previous posts—“Part 1. Understanding Pet Insurance,” “Part 2. Narrowing Your Choice of Pet Insurance Companies,” and “Part 3. Setting Your Pet Insurance Priorities and Preferences,” stop reading this post now and start back at the beginning of the series. 

Only after you learn the basics and take the steps we recommend will you be ready to value-shop.

Sorting the Policies

With your “Must-Haves, Nice-to-Haves, Dealbreakers” worksheet recommended in our previous post complete, sort through online policy features comparison checklists and the notes you made when narrowing your choice of companies to identify which policies best meet your criteria and which policies need to be ruled out. 

Even if you have a favorable overall impression of an insurance company, rule out their policies if the terms include dealbreakers for you. For example, if after considering your priorities and preferences, you know you really want exam fees to be covered, and this company’s policies exclude exam fees—even as supplemental coverage—remove the company from further consideration. It’s not a good choice for you and your pet. 

If you don’t have at least three potential policies left to consider, revisit and adjust your “Must-Haves, Nice-to-Haves, Dealbreakers” worksheet—particularly the dealbreakers section where you may have included provisions no company offers. 

For example, if you’re looking for a policy that covers pre-existing conditions or a company that offers immediate direct pay to any veterinarian you choose without prior arrangements between the insurer and the practice, you will have ruled out all your pet insurance policy options. 

It’s Time to Read Sample Policies

After you eliminate any policies with major dealbreaker provisions, download sample policies from the remaining three to five most promising options. 

As you prepare to value-shop these most promising-looking policies, the only way you can make valid comparisons and an informed buying decision is to read each of the policies that have made your final cut. 

Read every word of every policy.

Otherwise, you won’t understand the value each policy provides in exchange for your premium payments.

Unless you read the policy, you won’t know exactly what you’re buying and paying for, and you may set yourself up for unpleasant surprises when claims you assumed would be covered are rejected for reasons spelled out in the policy you neglected to read.

We’ve all grown accustomed to accepting terms for software products and social media accounts without reading them, and we seldom suffer negative consequences. Even when signing contracts and release forms in person, most of us say, “Just tell me what it is I’m agreeing to,” and sign our names without reading the documents.

An insurance policy is different. The product is the contract. 

Unlike a tangible product or a personally-delivered service, an insurance policy is nothing more nor less than a legal contract. Marketing copy, comparison checklists and heartwarming stories of claims paid are easy reads by comparison, but the policy terms are the only words that count. Many of those terms are not spelled out on the company’s website and in email messages.

Tedious as reading an insurance policy may be, there’s no getting around it: you simply must read the contract to know what you’re getting—and what you’re not getting—in exchange for the premiums you are asked to pay. 

We assure you reading the policies now—before you buy—is your best strategy for choosing the most benefits-rich policy to purchase and minimizing misunderstandings and disappointments in the future as you file claims. 

Knowing the policy provisions—the actual value the insurer is committing to provide and the risks you are expected to cover—is essential to your ultimate satisfaction with your choice of policy. 

So read the sample policies!

Ask Your Questions

Reading insurance policies can be a mind-numbing experience. Keep yourself engaged in the process by highlighting key benefits, noting passages that seem unclear and writing down questions you have for the insurer. 

Then call the insurance company, ask your questions and make notes of the answers. 

In addition to clarifying policy details, your call allows you to evaluate customer service. How many rings before they answered the phone? How many prerecorded system prompts did you have to respond to before you were speaking with a live customer service representative (assuming you actually reached a human)? Did the representative seem to know what he or she was talking about? Was the rep pleasant to deal with? Did the rep pressure you to enroll immediately, even though you said you’re still researching your options?

Based on this exploratory phone call, do you want to do business with this company?

Getting Serious With the Quote Tools

We’re guessing if you’ve explored pet insurance at all—either as we’ve suggested or on your own—you haven’t been able to resist requesting at least a few premium quotes using the online tools available on every insurer’s and aggregator’s website. 

If you used an aggregator’s tool to collect quotes from multiple companies, you probably noticed some pretty significant differences in prices. Remember—those numbers are meaningless until you know what policy benefits you will and won’t receive for the money. 

You may have played around with the quote tools’ settings for policy specifications and recalculated to see the impact of various options on premiums. 

If you’ve adjusted the variables, you may have observed higher deductibles, lower maximum claims payouts and lower co-insurance obligations for the insurer result in lower premiums for you. 

Keep in mind, those lower premiums for a particular policy almost always bring with them greater financial risks for you.

According to Doug Kenney, much more important than the premium amount, “The most important figure to consider is your potential out-of-pocket costs (including the premium) if you have to file a large claim, e.g., $5,000 or $10,000.” Think through the possibilities for the policies you’re considering and do the math to calculate your potential costs.

“Choosing the right policy maximum, deductible, and copay can literally save you thousands of dollars over the lifetime of your pet,” says Dr. Kenney.

Collect Quotes Directly from Insurers

At this stage in the purchase process, we encourage you to start fresh with quote tools from each insurer’s website, taking an orderly, methodical approach and making notes to compare the information you gather. 

Aggregators’ quote tools will produce results from multiple companies, including some you will have ruled out by now, and may not show the full range of policy options available for each of the policy finalists you’ve identified. 

You will also have direct access to additional details of the policies you’re considering on the insurers’ websites. 

Making Valid Comparisons

Write down the policy specifications you want to explore, noting several deductible amounts ($250, $500, $750 and $1,000, for example), several maximum payout amounts ($10,000, $15,000, $20,000 and unlimited), and several co-insurance amounts (70%, 80%, 90% and 100%). 

All these options will not be available from all companies for all pets. Some options—like a relatively high deductible or a relatively low maximum payout—will not be of enough value to you to consider and so, of course, need not be priced.

You’ll find some companies are not as flexible as others and limit your ability to customize their policies. Some will quote multiple variations on their coverage, allowing you to tailor the policy to suit your preferences. 

Others may offer only one plan or present one take-it-or-leave-it policy option for your pet. For example, if your pet is a 10-year-old bulldog—an age and breed likely to be prone to multiple heath problems—the quote tool might offer as your only available option a policy with a $5,000 maximum payout, 70% co-insurance and $500 or higher deductible. This tells you the company is willing to take on only limited risk for insuring your pet. 

In making your comparisons using the various companies’ quote tools, design policies with identical or at least very similar specifications and note the premiums quoted. 

For at least one set of policy specifications—the specs you’re leaning toward choosing, edit the pet information to add two or three years to your pet’s age and see how much higher the premiums would be at this time to issue a new policy for an older pet just like yours.

No, this won’t tell you what your premiums will be two or three years from now. But collecting quotes on an older version of your pet will at least hint at how the company’s underwriters price policies based on age. 

Shop Value, Not Price

Keep in mind, the lowest price may or may not—and probably won’t—represent the best value. Knowing that most pet insurance buyers take recommendations and shop prices without giving much consideration to the value their policies provide, many insurers feel free to issue contracts with terms that are pretty unfavorable to the unsuspecting policy buyer, compared with other insurers’ policy options. 

Consider the value companies bring. After you’ve collected premium prices for closely comparable policies, go back and review the strength, stability and reputation of each of the companies issuing the policies. You should have found this information in the initial research you did to narrow your choice of companies. 

All other factors’ being equal, a more stable, well-regarded company in business for a longer time provides more value than a relative newcomer with no financial track record and mixed reviews. 

Consider the value of policy provisions. As you may have discerned when you read the sample policies—even with identical deductibles, maximum payouts and co-insurance amounts—some policies are more generous and benefits-rich than others. 

If one insurer covers exam fees, either in the base policy or as a supplement you purchase, and the other insurer doesn’t, the value of exam fee coverage, which reduces your risk, may more than justify a higher premium if your pet ends up needing multiple visits to our clinic for one or more ongoing health concerns.

A company that applies 100% of your payments for eligible expenses toward the deductible is providing more value than one that applies a percentage based on the co-insurance amount in calculating your contribution to the deductible. 

The difference between one policy’s per-incident or per-condition deductible compared to another policy’s annual deductible could make a substantial difference in the value the policy provides over time in exchange for your premium dollars, although this difference is hard to predict.

With an annual deductible, you’ll be expected to meet the deductible by paying all eligible expenses for all veterinary care combined during the policy year. When the annual policy renewal date arrives, your paid deductible total reverts to zero and you start over again. 

With a per-incident or per-condition deductible, you are expected to meet the policy deductible for each new condition before any claims for eligible expenses for treating that particular condition will be reimbursed. 

If your pet has only one or two diagnosed conditions, particularly if the conditions are chronic and require ongoing treatment, a per-condition deductible could work in your favor. 

If your pet ends up having multiple, unrelated health problems, you will be required to meet the specified deductible amount for each problem before the policy will begin reimbursing you for eligible expenses. 

Some companies with per-incident/per condition deductibles require you to meet them only once for your pet’s lifetime, but some reset deductibles to zero every policy year. 

Which approach to deductibles—annual versus per-condition—provides more value? Given the unpredictability of your pet’s future health care needs, we would say the option that provides you with the greatest peace of mind provides more value. 

If you want to cap out-of-pocket costs reliably in the coming year, regardless of the nature and number of your pet’s potential health problems, an annual deductible would be the better choice. If you choose a per-incident/per-condition deductible, it makes sense to choose a lower deductible amount to apply to each potential condition. Otherwise, you may never meet the deductible for any one condition.

A policy that covers curable pre-existing conditions after fewer symptom-free days offers more value than a policy requiring more symptom-free days or one that doesn’t cover curable pre-existing conditions at all. 

Some conditions considered curable include ear infections, urinary tract infections, upper respiratory infections and vomiting and/or diarrhea unrelated to a chronic illness.

Most insurance companies consider a condition cured after 180 symptom-free days, while other insurers require an entire year without symptoms. 

Read the sample policies you are considering to determine if coverage includes curable pre-existing conditions at all, and if it does, how many symptom-free days will be required before a condition is considered cured and eligible for coverage.

Has your pet already experienced a bilateral condition? Some companies consider this a pre-existing condition and won’t cover the same condition if it develops on the other side—even years after the first occurrence. 

Other companies will cover a future occurrence of a bilateral condition, once any waiting period has passed and the policy is in force. 

This difference in coverage of bilateral conditions could have a significant impact on the value a policy provides you—particularly if your pet already has had any of the common bilateral conditions such as hip dysplasia, a torn cruciate ligament, patellar luxation, glaucoma, uveitis (an inflammation of the eye), or cataracts on one side or the other.

Value-Shopping Wellness Coverage

To value-shop a wellness plan, simply get an estimate of the year’s upcoming wellness services and products your pet will need and do the math to determine if the coverage will pay for itself in the benefits it will provide.

If the benefits relative to the known costs of wellness services are close to break-even, or perhaps even likely to result in a small loss, you may still elect to buy the coverage as a way to spread wellness costs out in premium payments over the entire policy year. 

If just before the wellness coverage went into effect, your pet had a dental procedure, received vaccines that won’t require a booster for the next three years and already has a microchip, the benefits may not be worth it to you.  

If wellness coverage will save you only a few dollars this year, you may prefer to include the predictable costs of wellness services and products in your regular household budget or as part of a designated savings account to cover such expenses. 

Although wellness coverage seems straightforward enough, any insurance claim takes time and documentation to file and has the potential of being denied or disputed by the insurer. 

Bear in mind, as with any veterinary service we provide, you will have to pay for wellness care at the time of service, file claims and wait to receive the reimbursements from the insurance company for wellness coverage. 

Keeping Your Chosen Policy Affordable

As you collect quotes for various levels of coverage, you’ll notice the premium costs decline as you assume more risk. 

When you first purchase your chosen policy, we encourage you to buy the best coverage you can afford. 

As the years go by and the premiums inevitably increase, be prepared to downgrade your policy at renewal time to keep it affordable. 

By increasing the deductible amount, decreasing the maximum claims payout and/or increasing your share of co-insurance, you can keep the coverage in force while keeping premiums affordable. Usually, raising the deductible amount has the most impact on premiums. Just take care not to strip so many benefits from the policy that it no longer provides sufficient protection for your pet. 

Call the insurance company a month or so before time for the policy to renew and discuss your options. The customer service representative should be able to quote how various adjustments will impact the premium amount and you can decide what compromises you are willing to make. When you’ve finalized your decisions, the company will issue a new declarations page that reflects the changes you’ve made and the revised premium amount for the coming policy year.

Bear in mind, this process typically works in only one direction. You can make changes to an existing policy to reduce coverage and premium amounts, but most companies will not allow you to enhance coverage on an existing policy. 

You may have the option to cancel the current policy and start fresh with a new, improved policy from this or any other insurer, but you will have new underwriting and waiting periods to face, and you will mostly likely lose coverage of any pre-existing conditions that developed while the previous policy was in force. 

Choose Your Best Policy

Are you overwhelmed yet? 

Are you still weighing the relative merits of the two or three most promising policies, or has an obvious best choice emerged?

Ideally, even if you haven’t identified a clear winner, you’ve done sufficient research to feel confident you most likely won’t go wrong choosing either of the policies you haven’t ruled out by now.

Read the Actual Policy

Once you finalize your purchase, read the actual policy the company issues, along with the declaration page stating the agreed-upon terms, to make sure your understanding of what you’ve bought aligns with the insurer’s. 

We know after all the research you’ve conducted to choose the right policy, the thought of reading yet another insurance policy probably seems burdensome. 

But in Lesson 9 of Pet Insurance University’s “Comprehensive Pet Insurance Guide,” Dr. Fran Wilkerson explains why you should read the issued policy.

“In addition to reading the sample policy before you buy, it is equally important that you read the actual policy you receive after you purchase the policy as things may be different after you apply,” says Dr. Wilkerson. “The underwriter may choose not to cover you for certain things after they receive your application.”

If you encounter exclusions or other terms you don’t remember having read about in the sample policy, contact the company immediately and ask for an explanation.

If you feel you’ve made a mistake with your purchase, cancel the policy. Most companies will issue a full refund if you cancel within the first 30 days, provided you have submitted no claims. 

Some pet owners buy multiple policies at this point with the intention of reading actual policies, requesting medical records reviews and then cancelling the policies they don’t want within the 30-day period.