Pet insurance premiums are what many pet owners focus on when investigating whether to purchase pet insurance for their pet. There are many factors that affect the cost of pet health insurance.
1) Geographic location
Where you live affects the premium you will pay to insure your pet. For example, pet insurance premiums are generally higher in California than in Tennessee because veterinary fees are higher in California than Tennessee.
2) The breed of your pet
Certain breeds of dogs or cats are known to have more health problems than other breeds, so the pet insurance company calculates this factor into the premium you'll pay to insure your pet.
3) The age of your pet
The older your pet is when you purchase pet insurance, the higher the premium will be because older pets generally have more health problems than younger pets. Older pets tend to develop chronic diseases that will need ongoing treatment.
Not all pet insurance companies raise premiums just because your pet gets older, but some do and the increase can be substantial when a pet hits about 10 - 12 years old.
This is something you should ask about or calculate on your own while doing your research before purchasing pet insurance. You should also realize that companies can and do raise premiums for reasons other than your pet's age. Companies will also raise or adjust premiums from time to time based on inflation and corrections based on their actuarial data.
4) Potential discounts
Most pet insurance companies offer discounts for insuring multiple pets, service dogs, microchipped pets, policies bought through your employer, and sometimes for pets that have been spayed or neutered.
5) What's covered and what's not covered
Some companies offer additional coverage options called "riders" to their base policy that costs extra. Some examples are coverage for chronic diseases, hereditary diseases, pregnancy problems, wellness care, etc. This is where you have to pay attention and use discretion when comparing companies. For example, at this time, all pet insurance companies cover chronic diseases. However, some companies automatically cover it in their base policy while others only offer it as an add-on rider. To accurately compare these companies with each other, you will have to include coverage for chronic conditions when it is an optional rider. Also, the extent to which these items are covered varies greatly between companies, and if you aren't careful, you can over-pay for some of these coverages and/or end up with inadequate coverage.
6) Usually the biggest factors that will influence the cost of a pet insurance policy are:
- the lifetime, annual, or per-incident maximum
- the deductible
- coinsurance percentage
Some companies have a set deductible and coinsurance (copay). For example, they may have a $100 deductible and 10% copay for all their policies. Your only choice may be the per-incident or annual maximum coverage amount.
Several companies allow you to customize your policy and choose your own annual maximum, deductible, and copay. Choosing a higher deductible and/or copay will lower your premium because you will be taking on more responsibility for pet's healthcare costs, and therefore, you'll pay more out-of-pocket.
For the companies that allow you to customize your policy, you can change each of the variables around until you get the monthly premium and coverage you are happy with. When doing so, you should keep in mind the guidelines I’ve offered in blog posts and in my book about selecting maximums, deductibles, and copay percentages. In my opinion, it is better to get a quote for each possible policy a company offers and see which one actually gives you the lowest out-of-pocket expense when you test it with various claim amounts.
I used Embrace Pet Insurance’s quote engine to record a video because it allows me to easily illustrate the difference maximums, deductibles and coinsurance percentages can make in your monthly premium.