5 Red Flags When Shopping for Pet Insurance

Health insurance by any other name is still a pain in the you-know-what.

From reducing our stress levels to providing companionship that stems the tide of loneliness, pets provide us with countless benefits. But those benefits aren't free. It costs money to care for a pet even under the best circumstances.

And it gets much more expensive when those circumstances are less than ideal.

That's why one of the most important things you can do as a pet parent is to get pet insurance for your furry family. 

As with human health insurance, however, the provider you choose can have a big impact on the quality of your coverage. Here are a few things to consider when selecting a pet insurance provider.

1. Age restrictions

Like humans, many animals develop more health issues as they age. The good news: Many pet insurance providers won't drop your pet simply because they've gotten older. So, as long as your pet is already insured, you should be able to keep your coverage. That's why it's recommended to get a pet insurance policy while your pets are young. If your pet is already past their prime, you may have to be a bit more selective about which providers you can use.

2. Breed restrictions

If a pet insurance company refuses to cover certain breeds, you have to ask yourself why. Often, it's because it doesn’t want to be on the hook for covering breed-specific health issues. For example, certain large dog breeds are prone to hip dysplasia, which can be expensive to treat. If the pet insurance company doesn't provide coverage for these conditions, you may want to look elsewhere.

3. No routine care coverage

This one isn't necessarily a dealbreaker, but it's worth considering when shopping for a pet insurance provider. Many of the more affordable plans will likely be emergency-only coverage. This means you'll be responsible for covering the cost of all of the routine veterinary care, including check-ups, vaccines, and flea treatments. If your pet insurance plan doesn't cover this care, you'll need to make sure you budget for it.

4. No pre-existing condition coverage

In another parallel with human health insurance, some pet insurance providers have restrictions when it comes to pre-existing conditions. So, folks with pets who have been diagnosed with chronic conditions may have a harder time finding quality coverage. Make sure to look into a potential provider's rules about pre-existing conditions when comparing your options.

5. Bad reviews/reputation

Although you'll have a hard time finding any company that has nothing but glowing reviews -- there's always someone who's unhappy about something -- avoid pet insurance providers with excessive negative reviews. They may be prone to rejecting claims or nickel-and-diming customers.

One way to find a quality company is to ask around in your vet's office. Your veterinarian, their staff, and even other pet parents may be able to give you a recommendation for a reliable pet insurance provider.

Don't forget the emergency fund

One last thing to keep in mind when shopping for pet insurance is that even if you have a great insurance plan, you'll still want to have a dedicated pet emergency fund. You see, most pet insurance works on a pay now, claim later basis.

In other words, when your pet needs medical care covered by your pet insurance, you'll still need to pay for the services out of pocket. Then, you file a claim with your insurance provider to get your money back.

Plopping a potentially four-figure bill on your credit cards may seem like an easy solution. But it can take weeks to get reimbursed. This potentially leaves you paying high interest rates on a credit card balance that could be in the thousands.

While there's no hard-and-fast rule on how much you should set aside for your pet emergency fund, one veterinarian hosted by personal finance guru Suze Orman says to aim for around $2,500. That should cover the basics at an emergency pet hospital (because these things never happen during business hours).