Pet insurance companies use multiple factors when setting their rates including:
Coverage type
One of the biggest factors determining pet insurance cost is the coverage. For example, a comprehensive policy with an unlimited maximum payout that covers a range of treatments and also routine care will cost much more than a basic accident-only policy.
Here are the types of pet insurance plans:
- Accident and illness coverage. This type of policy helps pay for vet bills for unexpected incidents, such as a laceration from an accident, and illnesses, such as an ear infection or cancer. This also covers associated expenses such as diagnostic tests, surgeries, X-rays, hospitalization, prescription medications and emergency care. A plan may also include coverage for dental illnesses, alternative therapies, behavioural therapy and pet ownership benefits, such as lost pet advertising.
- Accident-only coverage. 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 medications and emergency care.
- Routine wellness plans. This type of policy covers medical expenses for wellness exams, flea and heartworm prevention, vaccinations and other routine annual care. These plans are typically add-ons, but may be included in more comprehensive accident and illness plans. You can not buy a wellness plan on its own.
Deductibles
A deductible is the amount of money you pay out of pocket every year before coverage starts. Most insurance companies in Canada offer a $100 base 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 your deductible amount, the less you pay in pet insurance each month. You only pay your deductible once per year, unless you have an accident-only plan that stipulates a per incident deductible.
Reimbursement levels
Pet insurance policies are reimbursement-based, meaning you usually have to pay your veterinary upfront for your pet’s medical bills and then submit a claim to the pet insurance company (Trupanion and PHI Direct can pay your vet directly).
Most Canadian insurance companies offer a standard 80% reimbursement rate, but Trupanion offers a 90% rate, while Pets Plus Us and Fetch By The Dodo allow you to choose between 70%, 80% and 90% rates. Pet insurance costs are higher for better levels of reimbursement. The amount you pay is called the co-insurance and you pay that with every claim.
Here’s how it works: Say you have a pet insurance plan with a $200 deductible and 80% reimbursement level:
- If your pet has a medical procedure that costs $1,500 and it’s your first claim of the policy period, you would first pay $1,500 to the vet.
- Your co-insurance, or the amount you pay, is $300 or 20% of the bill.
- Your deductible is $200.
- Your insurer reimburses you for $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 $1,000 to the vet.
- Your co-insurance is $200.
- Your insurer reimburses you for $800 because you have already paid the deductible for the year.
Pet’s breed
Your pet’s breed is a factor in determining pet insurance costs. That’s because some breeds are predisposed to illnesses, which typically translates to more veterinary visits and higher medical bills. For example, some larger breeds of dogs are more susceptible to heart and hip issues.
Age of pet
A pet’s age is another piece of the pet insurance cost puzzle. As your pet gets older, the chances of illness and injury increase, which results in higher pet insurance costs.
Location
Your postal code can also affect your rate as urban centres are usually more expensive due to higher property values (and therefore rents or mortgage payments), higher insurance rates, better wages for staff and improved access to cutting-edge 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 of coverage with a $200 deductible and 80% reimbursement is $47.22 in Vancouver, $26.68 in Toronto and $19.47 in Halifax.
