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Which pet insurance company is best?

Friday October 15th, 2010

By Dr. Jack Stephens

Question:

I have been researching different pet insurers on the internet and frankly with so many companies I'm confused! What should I consider when deciding on a pet health insurance company for my pets?

answered by Dr. Jack Stephens

Answer:

With all the pet insurance companies out there now, it's easy to be confused when deciding which option to go with. I pioneered the first pet insurance company in the United States in the early 1980s, and even I sometimes have a hard time deciphering what some companies offer in terms of benefits.

The upside to having many companies and plans to choose from is actually a good thing, as this means that there are more options available for policies and pricing. You should ask yourself (and the insurance company) the following five questions to help you make the best choice for your furry friend.

How are the claims paid?
This is probably the most important question to ask because you will want to know how much your "out-of-pocket" cost will be. Some companies reimburse you based on a "benefit schedule" or a "usual and customary fee schedule." More often than not, the reimbursed amounts are far less than what your veterinarian actually charges for the services. It's common for some benefit schedules to only pay about 50% or at times less of your actual cost, which means you pay more out of your own pocket. When shopping around for a pet insurance company, you'll want to look for a plan that pays a "flat" rate percentage after the deductible has been subtracted of the actual cost of care. Plans that pay a flat percentage of the actual vet bill leverage your spending power by nearly five times. Whereas, a benefit schedule may only leverage your spend by two times or less.

What is the company's reputation for reimbursement and how fast do they reimburse you?
You'll want to do your research and find a pet insurance company that has a no-hassle reputation and a speedy claims reimbursement process. The last thing you'll want to do is worry about jumping through hoops or arguing over your legitimate claims. Some companies, through lack of experience or cost-control procedures, challenge legitimate claims. It's also a good idea to look for a company that allows you to file your claims electronically and offers an optional automatic direct deposit reimbursement into your bank account. These services eliminate mail time and greatly expedite your reimbursement. Seek a company with a history of paying their claims in 10 days or less and 5 days or less is better.

What is the financial stability of the underlying carrier or underwriter?
Most pet insurance plans are underwritten by an insurance company. This means that the plan is sold and serviced by an insurance agency, while the underwriter is the one who takes the financial risk. All insurance carriers are financially rated by firms like A.M. Best. You'll want to look for a carrier backing your policy with a ranking of an A or A+. You'll also want to make sure the company is admitted in your state and licensed to do business. This ensures more financial regulation and oversight--which is better for you, the consumer. A lower rating of B or C or a non-rated company is less financially strong.

What is the value for the price you pay?
The price you pay versus the value you receive is often subjective and requires a lot of research. Generally, the higher the deductible is, the lower the premium. Plans with less exclusions are usually higher. The higher your co-payment the lower your premium will be. Another method some pet insurance companies employ to lower the price of pet insurance is by offering limited coverage plans, such as "Accident Only" plans which are usually less expensive because the likelihood for a claim is less. More comprehensive plans are higher due to the higher possibility of claim filing. You may want to ask your veterinarian, the veterinary staff or a friend who has had experience with pet insurance for advice. Or, research more by examining plans and calling the company with your questions.

How is the company's service and how responsive are they to your questions?
If you have difficulty in the sales/inquiry phase when you are seeking information on coverage, imagine the service you might get after purchasing a policy. It's the company's responsibility to patiently answer your questions and explain their coverage. They are the agent and know the most about their plans and should be more-than-willing to spend as much time as you need answering your questions and finding the right plan for your pet.

Pet health insurance can be good for your pocketbook and a lifesaver for your pet. Not only does it allow you to budget with monthly premiums, but it leverages the amount you can afford to pay for your pet's healthcare needs. A little research, calling some insurers and asking your veterinarian can help you make the best choice.

Dr. Jack Stephens is a veterinarian and founder of Pets Best Insurance.

Read more about Dr. Jack Stephens in the DogTime expert center...
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