What is Accident & Illness Pet Insurance? (Plus: Why You Should Offer It)

Pet accidents and illnesses are unfortunately common, which can cause considerable financial hardship for pet owners. The average emergency vet visit costs $800-$1500, and pet owners in America collectively spend over $34B annually on veterinary care. 

If your business caters to pet owners, this presents a significant opportunity for you to offer your customers a service they need. In this blog, we’ll explain what accident and illness pet insurance is and how your business can use it to grow new recurring revenue and build deeper relationships with your customers.

What is Accident and Illness Insurance for Pets? 

As its name indicates, accident and illness pet insurance is a kind of insurance policy that reimburses pet owners for necessary veterinary costs in the event of an accident or illness (up to a certain amount). Typically, a base pet insurance policy will cover emergency veterinary care, and examinations to diagnose, treat, or operate on a covered injury or illness. This can include things like:

• Consultations, physical exams, health inspections, and office visits

• Surgical procedures

• Tests like X-rays, CT scans, ultrasounds, and blood tests

• Medical supplies for treating the issue

• Hospitalization 

• Pet ambulance fees

Without insurance, these services can cost hundreds or thousands of dollars. It’s not surprising that more and more Americans are considering pet health insurance to ensure they can afford care for their pets. 

Accident vs. Illness in Pet Insurance: What's the Difference? 

A standard policy will have rules about what qualifies as a “covered” issue for the purpose of reimbursement. So what exactly is considered an “accident” and what is an “illness?” The answers may seem obvious, but knowing the precise definitions can be important. If a pet owner needs a service that falls outside of those categories, they would need to add it as additional coverage in order to receive those benefits. 

An accident is usually defined as something like “a sudden or unexpected event that causes injury to the pet." For example, if your cat is injured by another animal, or your dog eats a box of chocolate and needs emergency vet care. Events like these would be defined as “accidents” and be covered by most accident pet insurance policies. It should be noted, however, that if the owner causes intentional harm to their pet, that would fall under abuse and would generally not be covered. 

An illness is usually defined as something like "any change to the normal healthy state of the pet, a sickness, disease, or medical condition that is not caused by an accident.” An example of an illness that would typically be covered by illness insurance would be something like heartworms, canine flu, skin rashes, diabetes, or arthritis. Due to cost and complexity, however, cancer treatment is often excluded from accident and illness policies. 

The distinction between the accident and illness is important, because it can affect whether a pet’s care is covered. Many standard pet insurance policies cover both accident and illness, but there are policies that may only cover accidents. It’s important for potential policyholders to understand what they’re getting, and if it’s a good fit for their needs.

Will Pet Insurance Cover An Existing Condition? 

Unfortunately, the short answer is “no.” As a general rule, if a pet has a pre-existing health condition, treatment for that condition will usually not be covered by the insurance policy. However, a pre-existing condition will not necessarily disqualify the pet from being covered entirely. For example, if a dog has pre-existing allergies, and his owner purchased a pet insurance policy for him, any treatments related to his allergy likely wouldn’t be covered. If the dog contracted heartworms after the policy was purchased, however, his treatment could be covered. 

This is great motivation for pet owners to get insurance when their pets are young. When it comes to purchasing medical protection, “the earlier the better” very much applies, because as pets age, they are more likely to develop conditions. If a pet owner waits until their pet starts to show symptoms, it can be too late to get the financial protection they need. 

Additional Pet Insurance Coverage

Insurance needs will vary for every pet, and sometimes those needs fall outside of standard policy coverage. Some pet breeds have a higher risk of conditions requiring long-term care – while for others, the biggest risk is playing too hard at the park. To accommodate for those differences, pet owners can choose to add endorsements to their policies, such as: 

• Preventative care: Many accident and illness policies only cover care if the pet is sick or injured, but don’t cover routine check-ups and other preventative care. An endorsement might extend coverage to include things like vaccines, parasite prevention, (flea medication, heartworm pills, etc), spaying or neutering, and other routine health maintenance costs

• Cancer treatment: As previously mentioned, cancer treatment is an outlier among illnesses as most pet insurance policies do not cover it. Cancer treatment is usually expensive and treatment is typically complex or ongoing. A cancer treatment endorsement can cover things like chemotherapy, radiation therapy, or immunotherapy.

• Dental care: Animal dentistry is a specialized field, some of which can be handled by a standard vet visit, but other treatments cannot. Coverages for treatment like tooth-related injuries, such as crowns, root canals, or tooth extractions would typically need to be added as an endorsement. 

• Prescription drugs: Pet medications are not usually included in a base policy, but it can often be added as an endorsement. This might include both short-term medicine for treating an illness (such as antibiotics), and regular medications to manage conditions like allergies.

• Alternative therapies: Standard pet health policies usually do not cover treatments like acupuncture, hydrotherapy, or physical therapy for pets, but these can sometimes be added through endorsements.

Even more comprehensive policies might cover loss and theft, kennel/boarding services, or even advertising a missing pet and offering a reward for its return. Depending on the provider, pet owners can fully customize their policies and make them as robust or as simple as they need, which can save them thousands of dollars. 

Why Your Business Should Offer Pet Insurance (And How to Do It)

Now that we’ve seen how valuable accident and illness pet insurance can be for pet owners to have, let’s briefly talk about the opportunity that this product offers for pet-related business owners.

Growing Demand for Pet Insurance

There is an increasing demand for pet insurance in the United States. Since 2017, the average annual growth rate of insured pets is 21.5%. At the end of 2021, close to 4.41 million pets were insured, a 28% increase since 2020. In 2022, the total premium revenue for pet insurance was nearly $2.6 billion. That is a huge market with a promising annual growth rate. 

White-labeled, embedded insurance can be a big opportunity for pet businesses to tap into that market and build new streams of recurring revenue. If your clientele is primarily pet owners, you are perfectly positioned to offer this product. Accident and illness pet insurance would be a natural addition to your product lineup, and because your customers already trust and have a relationship with you, they would be more inclined to get the coverage they need from you instead of an insurance company. 

Other Benefits of Entering the Insurance Market

1. Deepen your customer relationships

Insurance is a very “sticky” product. Due to the nature of insurance, it establishes an ongoing relationship with your customers through monthly premium payments. Not only would you have the benefit of that recurring revenue, but you also have the ongoing brand exposure that it provides. It gives you another touch point with your customers, which can only strengthen your long-term relationships with them.

2. A modern, digital experience

Modern customers expect modern experiences. Traditional insurance carriers and policies tend to be rigid with a mixture of slow offline processes and archaic online ones. By offering your customers a customizable, convenient, and entirely digital solution, you can meet your customers in the 21st century and stand out from the competition. 

Embedded insurance, as its name implies, is insurance that is embedded into an existing purchasing experience–it allows your customers to buy digital pet insurance without requiring them to leave your website to complete the transaction. Another example of embedded insurance would be travel insurance for an online plane ticket or crypto wallet insurance offered on a crypto-related website. 

A white-labeled insurance product is one that is completely integrated not only into your website, but also into your brand. If you were to offer white-labeled pet insurance, your customers would have no indication that the product was not created by your company. 

Embedded pet insurance is a great opportunity for pet business owners to grow their revenue and deepen their customer relationships.  If you are interested in embedded accident and illness pet insurance, Get the Guide to Growing Your Revenue with Embedded Pet Insurance, and learn everything you need to know to get started. 

If you’d like to speak to one of our pet insurance experts, contact us to learn more.