Choosing a Pet Insurance Plan – How Will Claims Be Paid?
Pet insurance companies typically determine how much to reimburse for a claim in one of two ways. Some plans use what is known as a schedule of benefits, while others use the actual vet bill to determine reimbursement.
Pet insurance with benefits schedule The benefit schedule determines the maximum reimbursement for a procedure or treatment.
With a benefit schedule, the pet insurance company decides in advance how much it is willing to reimburse for a procedure or course of treatment, regardless of what it costs you. The benefit schedule may not vary by geographic location and traditionally does not increase each year to account for veterinary inflation. So if the benefits schedule isn’t updated, your refund actually will be shrinkage about 20% every three years at the current rate of inflation for vet fees!
Benefit schedules are currently used by Veterinary Pet Insurance and Pet First Healthcare.
Pet insurance with customary, customary and reasonable benefits UCR stands for “usual, customary and reasonable” and is a way of reimbursing claims based on the actual fees charged for procedures and treatments in a specific geographic area. Reimbursement recognizes veterinary costs where you live (for example, veterinary care in Manhattan may be more expensive than in Cleveland) and also allows for higher emergency care fees (urgent care facilities are usually more expensive than your family vet clinic because they are open 24/7, 365 days a year) and veterinary inflation over time.
UCR benefits are currently used by all other pet insurance companies except those listed above.
Benefit schedules can leave you in a bind If you have a policy with a schedule of benefits, you may be in for a surprise when you file a claim. Many pet parents are shocked when their reimbursement is far less than their vet bill. They had no idea that their pet insurance wouldn’t recognize what they actually paid.
The important thing to remember is that benefit schedules limit payout no matter what the vet bill is.
Choosing a pet insurance plan Because UCR reimbursement is more closely tied to your actual vet bill, you’re less likely to be shocked when you file a claim than the benefit schedule. For current pet insurance plans on the market, your premium may be higher for one with UCR benefits than one with scheduled benefits because you get a higher claim reimbursement.
To avoid complications during claims and make sure you’re getting what you expect from a pet insurance plan, choose one that doesn’t use a benefit schedule.
A note about veterinary fees Many pet insurance companies use the Veterinary Fee Reference Guide to help them determine how much to reimburse. This guide compiles average veterinary fees for hundreds of procedures from 1,786 veterinary hospitals in the United States. There is a 5th edition coming out some time this fall, updated with 2006 data.
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