Do I Need a Good Credit Score for Pet Insurance?

Indian woman with her beloved pet dog

Pets bring us love, companionship and joy—just ask the one of the roughly 84 million Americans who own one. But pet care includes necessary veterinary visits that can take a big bite out of your budget; a bite that's gotten bigger in recent years as costs continue to rise. Pet insurance can help you keep both your fur-baby and your bank account in good health.

Credit scores are a factor in other types of insurance coverage in most states, so you may be wondering what credit score you need to secure coverage for your pet. Pet insurance cost and eligibility depends on several factors, primarily related to your pet, not your finances. Here's what you need to know to make a smart choice about pet insurance.

Does Your Credit Score Affect Your Ability to Get Pet Insurance?

Pets are considered property, so pet health insurance is classified as property and casualty insurance, similar to home and auto insurance. In many states, insurance companies check what's called your credit-based insurance score when considering your application for home or auto insurance and deciding your rates. Credit-based insurance scores are different from FICO or VantageScore® credit scores because they help predict whether you're likely to file an insurance claim.

Do insurers check your credit-based insurance score when you apply for pet insurance? In California and Massachusetts, it's illegal to use credit scoring when writing an insurance policy. If you live in any other state, however, the answer is as hazy as a cataract in an old dog's eye.

Neither the National Association of Insurance Commissioners nor the North American Pet Health Insurance Association (NAPHIA) are aware of credit scoring being used in writing pet insurance policies. However, both acknowledge that it might be happening depending on state laws.

The upshot: Maintaining a good credit score is always a smart idea, but it probably won't affect whether you can get pet insurance or how much you pay for it. That depends primarily on your pet.

What Factors Affect The Cost of Pet Insurance?

Although dogs are the most commonly insured pet, you can get pet health insurance for all kinds of animals, including cats, rabbits, ferrets, exotic birds, reptiles, potbelly pigs and rodents. The key factors affecting the cost of pet health insurance are the coverage you choose (more on that in a moment), where you live and the pet you want to insure.

Why does your location affect the cost of pet insurance? Generally, since it costs more to run a veterinary practice in urban areas, veterinary care in big cities can be more expensive.

Primarily, though, the species, breed and age of your pet are the considerations that'll determine what your policy will end up costing you. Some species and breeds cost more to care for or are more susceptible to medical problems than others. Purebred animals often have hereditary conditions; for example, English bulldogs frequently suffer from hip or elbow dysplasia, allergies and respiratory problems. Larger animals that need bigger doses of prescription medications and animals that live longer also cost more to insure. Older pets are more likely to have problems requiring medical care.

The NAPHIA reports that small, spayed, mixed-breed female dogs or cats are the cheapest to insure; large, purebred and short-nosed dogs are the most expensive. (One reason insurance for female pets is cheaper: Pet health insurance usually doesn't cover pregnancy-related care.)

How to Choose the Right Pet Insurance Policy

Generally, there are three types of pet health insurance you can buy.

  1. Accident-only insurance covers medical care related to an accident.
  2. Wellness covers routine or preventative care.
  3. Accident and illness offers more comprehensive coverage for accidents, routine care and treatment for illnesses.

Within those three categories, there's a wide range of coverage, so it's important to know exactly what a specific policy includes. Here are some questions to ask when comparing pet insurance:

  • What treatment is covered? Not all pet insurance policies are created equal. For instance, some wellness policies cover dental care, prescriptions and medical tests, while others do not. If you're getting an accident-only plan, does eating rat poison constitute an accident, or does it only cover things like road accidents?
  • Are preexisting, congenital or chronic conditions covered? Some policies exclude such conditions, while others will cover them on a limited basis. For example, if your pet got cancer and treatment was covered by insurance company A, cancer will be considered a preexisting condition if you switch to insurance company B. However, it's also possible insurance company A will categorize cancer as a preexisting condition when your policy comes up for renewal and exclude it from coverage.
  • What costs are you responsible for? Just as with auto or home insurance, you'll pay a deductible when you make a pet insurance claim. The insurer then pays a percentage of the remaining costs for covered treatments. For example, suppose your pet needs a $10,000 surgery, your policy deductible is $100, and your copay or coinsurance is 80%. You pay $100; the insurance pays 80% of the $9,900 remaining (or $7,920); and you'll be responsible for the remaining $1,980.

However, there's some fine print to be aware of when it comes to deductibles and reimbursement levels. Like human health insurance, some plans require you to meet a certain deductible for the year before they pay out any benefits; others just charge a per-treatment deductible. In addition, some plans reimburse a percentage of the "usual and customary" costs of certain procedures—which may not reflect what your vet actually charges.

  • What are the benefit limits? Pet health insurance policies generally have limits on how much they'll cover per pet, per illness or accident, or per year.
  • How will benefits be paid? Some insurers pay the vet directly, but in most cases, you'll pay the veterinarian out of pocket and submit a claim to get reimbursed by the insurance company.
  • Are hereditary conditions excluded? Some pets are prone to certain conditions because of their breed; often, these will be excluded from coverage.
  • What is the waiting period? All pet insurance policies have a waiting period, generally 30 days or less, after which the policy goes into effect and you can make a claim for illnesses that begin after the waiting period.
  • Is a medical exam required? Some insurers require proof your pet has been seen by a vet in the past year before they will issue a policy.
  • Are you limited to a provider network? You may have to use a vet from the insurance company's provider list to be covered. If you already have a vet you love, make sure they are part of the network.
  • Are there extra benefits? For example, some policies cover treatment if your pet is ill or injured on a trip outside the United States. Others cover the cost of advertising for a lost pet and paying a reward for its return.

How to Save on Pet Insurance

Shop around and compare various policies to get the best price on pet insurance. Be sure you're evaluating the same levels of coverage. You can save on pet insurance by:

  • Choosing accident-only coverage: Just as with human health insurance, you can save money on premiums by purchasing insurance for catastrophic coverage only. Budget the money you save for your pet's routine care.
  • Opting for a higher copay: Reducing coinsurance from 90% to 70%, for instance, could save you some money. (Just make sure you can afford the higher copay.) Before reducing your coverage, find out whether you can bump it up again if you choose; some insurers don't allow this.
  • Purchasing a policy when your pet is young: It's harder to get pet insurance as your pet gets older; in fact, some insurers won't write policies for pets over a certain age. Like people, older animals usually need more medical care as hereditary conditions arise or chronic diseases set in. If you get insurance when your pet is young, however, you can usually keep the policy for the life of your pet.
  • Keeping your pet healthy: There's a lot you can do to maintain your pet's health yourself. Brushing your pet's teeth, feeding them a good diet and providing plenty of exercise will keep your pet in good shape, and help to prevent many health problems.

Pet insurance isn't the only way to save money on pet health care. Some veterinarians participate in discount programs that charge a membership fee in return for lower rates on care with veterinarians in the network. Veterinarians affiliated with animal rescue organizations may offer discounts for rescue pets. Your community or local animal shelter may periodically offer low-cost vaccination or spay and neuter clinics. Sometimes you can get a lower price for your pet's prescriptions by filling them at a pharmacy for humans. Ask your vet about suggestions for lowering the cost of your pet's medical care.

Veterinary visits aren't cheap, and pet insurance can help protect your pocketbook—but it's also a complicated insurance product with lots of factors to consider. Taking the time to thoroughly research the pros and cons of every policy you consider will help you choose the best pet insurance for both your pet and your budget.