Pet Insurance Guide: How It Pays, What It Excludes, and When It Makes Sense
Part of our insurance guides. Pet insurance borrows the vocabulary of health insurance, with premiums, deductibles and limits, but it pays in a different way and excludes more than most buyers expect. This page explains the mechanics and links to a deeper guide on each of the three questions buyers ask most.
Key takeaways
- You usually pay the vet first and the insurer reimburses you, per the Illinois Department of Insurance.
- Pre-existing conditions are commonly excluded. In states that adopted the NAIC model law, the insurer must prove the exclusion applies.
- In those states, waiting periods for accidents are prohibited, and illness and orthopedic waiting periods cannot exceed 30 days.
- According to NAPHIA, the average U.S. accident-and-illness premium in 2024 was $749.29 a year for a dog and $386.47 for a cat.
- Insurance is not a promise to save money. Illinois regulators warn "it is possible that you will pay more in premiums than you receive in benefits."
How does pet insurance work?
The Illinois Department of Insurance describes the key difference from human health coverage: "When your pet is injured or ill, it is your responsibility to pay the veterinarian bill. You then submit a claim to your insurance company, who reimburses you for some or all of your expenses."
Three numbers decide how much comes back:
- Deductible. What you pay before reimbursement starts. Illinois says deductibles "may be annual or per incident."
- Reimbursement percentage. Insurers "reimburse a percentage of your costs (typically between 60-100%) or use a benefit schedule," per Illinois.
- Limits. Per-incident, annual and lifetime caps on what the policy pays.
Triple-I describes three general levels of cover: basic (the least expensive, with the lowest reimbursements, for accidental injuries, poisonings and illnesses), comprehensive (accidents and illnesses plus office visits, tests and prescriptions) and well care for routine preventive costs.
What does pet insurance cost?
According to NAPHIA's industry report, compiled by Willis Towers Watson, average U.S. annual premiums in 2024 were:
| Plan type | Dogs | Cats |
|---|---|---|
| Accident only | $193.29 | $110.03 |
| Accident and illness | $749.29 | $386.47 |
| Insurance with embedded wellness | $1,321.33 | $651.30 |
Source: NAPHIA State of the Industry Report 2025 highlights (2024 data, weighted averages), accessed October 1, 2026.
The market is growing. NAPHIA reports 7.6 million pets insured in North America at the end of 2025, up 8.5% from 7.03 million in 2024.
What rules protect pet insurance buyers?
The NAIC adopted a Pet Insurance Model Act in 2022. It is a template, so it only binds insurers in states that pass it. NAIC's state adoption chart lists California, Delaware, Florida, Hawaii, Louisiana, Maine, Maryland, Mississippi, Montana, Nebraska, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont and Washington as adopting it, with New Jersey's law effective January 1, 2027.
In those states the model requires, among other things:
- Disclosure of whether the policy excludes pre-existing, hereditary, congenital or chronic conditions.
- Disclosure of whether the insurer "reduces coverage or increases premiums based on the insured's claim history, the age of the covered pet or a change in the geographic location."
- A 15-day right to examine and return the policy for a full refund if no claim was filed.
- No veterinary exam required to renew.
Before you buy: Ask for the insurer's "Insurer Disclosure of Important Policy Provisions." In model-law states, insurers must provide this separate summary of exclusions, waiting periods, deductibles and limits.
Will pet insurance cover a condition your pet already has?
Often not. The model act defines a pre-existing condition as one where, before coverage began or during a waiting period, a vet gave medical advice, the pet was treated, or the pet showed signs or symptoms. Some policies treat curable conditions differently from incurable ones. Our explainer on pet insurance pre-existing conditions covers curable versus incurable rules and what the insurer must prove.
When does coverage start?
Not on day one for most claims. In model-law states, illness and orthopedic waiting periods are capped at 30 days and accident waiting periods are banned. Illinois says waiting periods elsewhere "typically range from 2-14 days for accidents and 14-30 days for illnesses." Our guide to pet insurance waiting periods breaks them down by claim type.
Is pet insurance worth it for an older pet?
That depends on what the policy will cover for your pet now. Triple-I notes "older animals cost more to cover," and some companies have age limits. Illinois adds that older pets "may no longer be eligible for coverage, or may be required to go on senior plans." Our decision guide, is pet insurance worth it for a senior dog, shows how to weigh premium against the bills a policy could realistically pay.
Frequently asked questions
Does pet insurance pay the vet directly?
Usually not. The NAIC's consumer guidance says "often you'll be responsible for the full amount at the time of treatment, and then be reimbursed by the insurer for covered expenses."
Is a wellness plan the same as pet insurance?
No. In model-law states, insurers must disclose "that wellness programs are not insurance," and cannot market a wellness program as pet insurance.
Can I use any vet?
Illinois says most pet insurers "permit you to visit any licensed veterinarian," including specialists and emergency vets. Check your policy, since some plans use networks.
Can I cancel if I change my mind?
In model-law states, you have 15 days from receiving the policy to return it for a full refund, as long as you have not filed a claim.
Sources
- NAIC, "Pet Insurance Model Act" (MO-633), https://content.naic.org/sites/default/files/model-law-633.pdf, accessed October 1, 2026.
- NAIC, Pet Insurance Model Act state page (ST-633), https://content.naic.org/sites/default/files/model-law-state-page-633_1.pdf, accessed October 1, 2026.
- NAIC, "Pet Insurance: It Could Save Your Pet's Life, Could Save You Money," https://content.naic.org/article/consumer-insight-pet-insurance-it-could-save-your-pets-life-could-save-you-money, accessed October 1, 2026.
- Illinois Department of Insurance, "Pet Health Insurance," https://idoi.illinois.gov/consumers/consumerinsurance/pets.html, accessed October 1, 2026.
- NAPHIA, "State of the Industry Report 2026," https://naphia.org/industry-data/, accessed October 1, 2026.
- NAPHIA, "State of the Industry Report 2025 Highlights," https://naphia.org/wp-content/uploads/2025/04/NAPHIA-SOI2025-Report-Highlights_Public-April22.pdf, accessed October 1, 2026.
- Insurance Information Institute, "Facts about pet insurance," https://www.iii.org/article/facts-about-pet-insurance, accessed October 1, 2026.
Pet insurance laws differ by state and policies differ by insurer. Everything above is quoted from the source cited, as accessed on October 1, 2026. This is general information, not legal or veterinary advice.