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Ins and Outs - The details on the unexpected costs of pet insurance

Pet insurance might be a good idea if you simply want peace of mind.

That way, you know that if your pet experiences an unfortunate health issue, the bills won't crush your budget. Importantly, pet insurance doesn't cover everything. Even with coverage, you'll still have to pay for a variety of items. Here's what you need to know. 

Deductible and Copay

Just like with other forms of insurance, you're going to have to pay a preset deductible - which you can select - before the coverage sets in. You'll also be responsible for a preset co-pay. Money reports that if you can opt for a higher deductible, you should. In Money's study of pet insurance costs, pet owners who picked a $500 deductible instead of a $200 deductible saved about $216 per year in premiums. The key to figuring out your deductible is deciding what you could afford to pay for one visit that runs out to be quite costly. The higher your deductible the lower your premiums, and vice versa. 

Policy Pay Limits

Pet insurance can be tricky in that, depending on your plan, total expenses could be capped. That means if your pet develops a costly situation like cancer, you might exceed the insurance plan's limit. Every charge after that limit will come out of your pocket. Some pet insurance plans cap payouts based on diagnosis, on a calendar year, or even over the pet's lifetime. If you can afford a plan with a higher payout limit, you should go that route. 

Upfront Costs

Another way pet insurance is unique is that you're usually on the hook for the costs upfront. Once you have the receipts and other necessary paperwork, you'll submit them to the insurance company and be reimbursed. So be ready to wait a while for that money to come back to you. As with any insurance, read the fine print of pet insurance before signing up. 

Author Chris O'Shea/SavvyMoney

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