As of 2023, accident and illness pet insurance coverage average monthly premiums were $31.94 for pet cats and $56.30 for pet dogs. Pet insurance financially covers your pet’s vet bills, including wellness care, accidents, and different illnesses. This insurance often comes with higher premiums, which causes most pet owners to learn how pet insurance premiums are calculated.
Calculating your pet insurance premiums begins with considering factors that affect your premiums. These factors include your pet’s age, health condition, location, and many others. Insurance companies use these factors to determine the level of risk your pet poses. However, this write-up contains insights into how pet insurance premiums are calculated.
How Pet Insurance Premiums Are Calculated
Based on several factors insurance companies consider, pet insurance premiums are calculated. Insurers will often request certain information about your pet before your premium is determined. The level of risk these factors pose determines what your premiums will be. When applying for insurance, you will be required to provide the following for your premiums to be determined:
Pet Age
This is another major factor used to determine premiums. Your pet’s age shows how liable they are to develop an illness, leading to higher premiums. Kittens and puppies generally get lower premiums because they are less likely to develop serious and pre-existing illnesses. As your pet grows older, your insurance cost increases, while older pets tend to face higher premiums, especially pets with existing illnesses.
Pet Breed
Your pet breed plays a major role in determining your premiums. Some breeds are liable for specific health conditions, which may cause premiums to increase due to veterinary care costs. For example, dog breeds such as German Shepherds or Great Danes are liable to hip dysplasia, and cat breeds such as Persians are liable to genetic conditions.
Where You Live
Your location is another key factor that pet insurance companies consider when determining premiums. This is due to the vet cost in different locations; this means that in every location, the vet cost is different. However, insurance companies determine premiums to meet the differences in different regions.
Pet’s Medical History
If your pet has a pre-existing condition or a serious health condition, you may likely face higher premiums and coverage limits. Most pet insurance policies do not cover pre-existing conditions, while some insurers may provide limited coverage for curable conditions or conditions that have shown no symptoms for a certain period.
Reimbursement Rates and Deductibles
Before your policy offers coverage, you will have to pay a deductible, which is an out-of-pocket payment. The reimbursement rate is the percentage of the vet bill your policy will cover after the deductibles have been paid. Higher deductibles result in lower premiums because you shoulder more risks.
Level of Coverage
The type of coverage you prefer, as well as its level, also determines your premiums. Comprehensive pet insurance plans with wellness, illness, and accident coverage cost more than basic accident-only policies. Policies with higher yearly limits, higher reimbursement rates, and fewer deductibles will also face higher premiums. However, selecting a policy with a lower coverage limit, a lower reimbursement rate, and higher deductibles will result in lower monthly premiums.
Insurance company’s underwriting requirement
Every insurance company has its underwriting requirements. Some companies offer lower rates for certain breeds and ages. While others offer more expensive policies for the same plan. Comparing different insurers can help you find the best affordable rate for your budget and your pet’s needs.
Pet Lifestyle
Your pet’s lifestyle can also affect your premiums, causing them to increase. For example, outdoor pets have more risks of getting involved in an accident or contracting infectious diseases than indoor pets. For this reason, outdoor pets get more premiums.
Why Does My Pet Insurance Price Increase Each Year?
Generally, pet insurance premiums increase each year. While premiums are determined due to the level of risks your pet poses, there are some reasons why your premiums may increase each year. These reasons include:
- To cover the increase in veterinary care costs.
- To shield risks as your pet grows older and they are likely to develop health conditions.
Also, if your pet develops an illness that costs more than the policy limits while on the policy, you may be required to pay more premiums.
Can I Change My Insurer if My Premiums Are Too Expensive?
You can change your pet insurance company anytime you wish to. However, it is important to closely review your new policy’s terms before you change. Most insurance providers don’t cover pre-existing conditions, which means you will have to pay for coverage out of pocket if your pet has a pre-existing condition.