Right..?

You would think that your insurance covers the cost to rebuild your house if a covered hazard destroyed it. But more and more, the most unfortunate among us are discovering that’s not the case. Ask yourself: are you confident you have enough coverage?

Nobody likes rising prices. But with recent spikes in inflation, stagnation of real wages, and a war on the horizon, they’ve never been more volatile. But the one thing that’s definitely not getting any cheaper? Building a house. Currently, it’s never been more expensive to repair or rebuild. The quote you received ten years ago simply doesn’t apply anymore.

There are three significant trends causing reconstruction costs to climb. First and foremost: the cost of material has climbed significantly, which, in turn, inflates the cost of construction labor. These two numbers are strongly correlated, and both rose by more than 16% in FY 2021, alone.

“But what does this have to do with my homeowners’ insurance policy?”

You’ve probably noticed that your premiums climb over time. This can happen for many reasons, like having recently filed a claim, or a change to pricing models in your state. But one of the major factors considered in those premium pricing models is projected reconstruction cost. Or, how much the insurance company loses, on average, when they’re required to rebuild a destroyed home.

When you purchase a policy, you agree to a certain amount of Dwelling Coverage. In general, you want this number to match what it would cost to reconstruct the home. If a tornado destroys your $500,000 home, and you had $500,000 in dwelling coverage, and the rebuild only cost $450,000: you’re good. In this case, insurance pays for everything.

But if materials and labor each increased in price by 16% in one year? Suddenly, the rebuild quote is around $580,000. But that’s not the insurance company’s fault. If you want your home to look the way it did before: you’re paying that extra $80,000 out-of-pocket.

But what lead to the rise in labor and material cost? At the risk of oversimplifying, here’s why the current reconstruction cost for your home may be higher than it was a few years ago:

Changes to the Labor Market:

Construction workers are finally making a better living in 2022. Combined hourly retail labor rates increased 4.1% from July 2020 to July 2021 – greater than the 3.8% increase recorded in the previous fiscal year. It’s not a bad thing that laborers are commanding higher wages. Historically, retail construction is one of the worst-paying industries in the world. They work hard and deserve every penny they make! But it does have a “pass the buck” effect on rebuild costs. The owner isn’t about to pay their workers more. You are.

Changes to the Supply Chain:

The materials used to rebuild homes are also getting more expensive. Lumber, in particular – the raw timber that forms the framework and interiors of most homes – has become almost unaffordable. It’s already heavy, bulky, hard to transport, and difficult to extract from nature. This, coupled with a doubling of tariffs on Canadian lumber and an unusually-strong wildfire season, led to an increase in softwood prices of more than 112%. 

These changes have persisted into 2022, leading experts to believe that the price increase of wood is no longer transitory, but a permanent fixture of the post-pandemic world.

Tariffs & Trade Wars:

A tariff is a fluctuating tax on imports or exports, typically between two countries. In 2018, the United States government began imposing new, higher tariffs on steel, aluminum, and lumber from several countries – China, in particular – to discourage currency flow. And now, a new round of sanctions has been imposed on Russia for instigating the Ukrainian war. Since they’re one of the world’s biggest oil exporters, this threatens to drive energy prices through the roof, further increasing the cost of construction.

Tariffs and sanctions invariably cause price volatility, punishing the nation in question. They often lead to shipping and processing delays at ports and create bureaucratic nightmares for construction companies.

Across the board, the construction process has become more expensive. And every extra penny owed is passed down to you, the consumer. So what do we do? It’s unlikely, to say the least, that reconstruction costs suddenly revert to what they were in the before-time. How would you know if the reconstruction cost for your own property has increased?

The short answer is to review your policies yearly. In the post-pandemic world, you should check in frequently, compare policies, and request new quotes for reconstruction costs.

Is it an unfair burden on the consumer?

You bet.

Does it matter to the insurance companies?

Not in the least.

Best Age to Get Life Insurance
The best time to acquire life insurance coverage is in the 20s. It is the Age with the most affordable rates because a young person is healthier, and there is almost no risk for the insurer. The chance of illness and health concerns that make it difficult to get insurance is low.

There is a belief that failing to get a policy during young Age is missing the boat. However, insurance companies do not deny cover an older person ready to pay for premiums. However, they may charge a higher premium because of age-related the risks but will not reject their request for a cover.

How Much Is Adequate Life Insurance
Pinpointing the exact coverage is difficult, but it is essential to buy much as possible. You can make a reasonable estimate by adding up long-term financial responsibilities such as college fees and mortgage, and then subtract the assets.

It would help if you got a policy that fills the gap. The amount of money that dependants need makes a significant part of choosing a policy. The dependence means that the minimum coverage you require differs from someone else’s requirement. Financial experts suggest 10-15 times of the annual earnings.

Does Life Insurance Pay Debts?
Yes. Death benefits of insurance include paying off debts.
Debt payment after death is one of the significant reasons for buying insurance. Nobody wants to leave loved ones under the yoke of debts in case of an unexpected death. A good strategy is to buy an insurance policy with a long-term as the most significant source of debt. Mortgage, in most instances, is the longest-lasting debt.

The beneficiaries can use the death benefit in other ways if the policyholder dies without much debt. They can even use the benefits to pay off their debt. Death benefit passes to the beneficiaries, so creditors cannot directly go after it to recover their debt. The insurance reverts to your estate when you die before naming beneficiaries. Estates go through a court process, and creditors can access the insurance proceeds during the proceedings.

A permanent life insurance designed to build cash value can also pay off a debt in your lifetime. Options to utilize these funds are to withdraw or borrow against the cash build-up. You can also use this fund in other ways.

Life Insurance and Income Replacement
Income replacement is one of the most important reasons to get insurance. Sole providers need enough policy to replace the income and pay for final expenses like a medical bill or funeral expenses. It is good to invest extra in the policy because of inflation. Your policy should cater for more years of income replacement if you have young dependants than someone with older children because they are on the way to start earning.

Life insurance is an essential investment because it guarantees dependants of financial stability after the death of a loved one.

Insurance companies also allow insuring somebody else if that person’s death is your financial loss. For instance, an income-earning spouse will leave a financial and emotional loss upon death. However, other family members like children do not fit into this category because they are beneficiaries, and their death does not cause loss of income.

So, it may feel like a victimless crime to “get creative” with your insurance paperwork. It’s estimated that 35 million Americans have lied to their insurance company at one point in their life. Almost one in three have lied on their auto insurance, and another 22% regularly lie to health insurers. It’s entirely understandable, though. Insurance fraud wouldn’t be so prevalent if people didn’t consistently get away with it. And people wouldn’t get away with it so often if insurance companies weren’t already overwhelmed by fraud cases.

And what about the insurance companies? They cry and moan about the cost of fraud – but the reality is: they can afford it. They know they don’t have to catch everyone to make their bottom line. Fraud is anticipated. It actually happens, and is reliably predicted every year. It’s already been priced into their models. “Fraud rose by 11% last year? Better hike the premiums, otherwise C-suite won’t get their ninth-straight year of record-breaking bonus checks.”

It’s hard to have sympathy for anyone here… But the point is, insurance companies aren’t the victim. You are. You always are.

When a fraudster gets a payout, that’s less money the company has to pay out your legitimate claim. And if you decide to defraud your insurer, count on never sleeping well again. Lying on a claim or application is like having a loaded gun permanently aimed at your foot. The statute of limitations for fraud prosecution usually extends six to ten years after the crime was committed. So if, at any point during that time, you get caught? You’re absolutely screwed. Like, “life is now permanently harder for you” screwed.

For one: depending on the severity of the fraud attempt, your premium could triple in size. That is, if they even let you keep the policy after what happened. If the “fraud” could be construed as an “honest mistake” – say, your assistant did the paperwork and testified their negligence – you might get to keep the original policy at a higher rate.

But if your actions fit the classic “steal and conceal” definition of fraud? You’re going to court, and you’re going to lose. For the rest of your life, you’ll struggle to find an insurer who’ll touch you with a thirty-foot pole.

Insurance fraudsters never seem to realize the irony. There’s nobody better at detecting and punishing fraud than the very people they’re trying to rip off. It’s just that, long ago, insurance companies realized fraud was inevitable, impossible to prevent. So, it became a simple matter of calculation: To stay in business, don’t spend dollars recovering dimes.

And that’s the only reason anyone gets away with it. If you do – you’ve taken a risk so severe, beaten odds so slim: you almost deserve the money.

Unfortunately, most people who attempt insurance fraud have zero experience in either, uh, “industry.” False insurance claims are often a fraudster’s debut; poorly-concealed, transparently amateurish attempts to snag a payout. They’re almost always shocked when they get caught. Many of these criminal debutants ultimately aren’t even charged with fraud because their attempt to conceal the illegal activity was so unsophisticated – any reasonable person could’ve noticed, and the legal definition of fraud doesn’t apply.

But even if you’re not officially charged with fraud, the company has hard evidence showing you tried it once. Statistically, you’re very likely to try it again. And they’re all too happy to share that information with other insurers, effectively branding you for life. In a world where certain forms of insurance, like auto and homeowners, are mandatory: that can make for a disastrously expensive existence.

Getting caught for insurance fraud invariably means enormous financial penalties, jail time, likely, depending on your state of residence, and the impossibility of you ever finding insurance again.

Don’t even think about it.

Legally: an insurance lapse is any period of time when a registered vehicle does not have at least the state-required minimum insurance coverage. It can result from not paying your premiums, not renewing a policy once it’s ended, or getting dropped by your insurer after causing too many accidents or incurring too many tickets.

Mistakes happen, but you must avoid lapses in your car insurance at all costs. If you drive without car insurance, you’ll invariably be caught and penalized in a variety of ways. No matter who your insurance provider is, how the lapse happened, or whether it was intentional or accidental – insurance companies take it as a sign that you’re lousy clientele. Moreover, driving without insurance can lead to fines, tickets, license suspension, and even jail time for repeat offenders.

Maybe you’re currently wondering if it’s worth it to risk a lapse in coverage. Perhaps you’ve already lapsed, or there’s an existing coverage gap in your insurance history. But no matter what your financial situation is: it’s better to keep or downgrade existing coverage than to cancel altogether. The money you’d save in the short term pales in comparison to the inevitable future increase of your premium. Insurance companies share databases, and they will catch on if you go without coverage. Even if you don’t drive the car during that lapse, the financial consequences remain equally disastrous.

At the very least: getting caught means an insurance lapse fine of up to $5,000, permanent marks on your driving record, and a permanently-higher future cost of insurance.

Given the severity of these consequences: it’s best practice – and not terribly difficult – to avoid coverage lapses in the first place. Drive safely to avoid the worst-case scenario of being dropped by your insurer altogether. After that, get an insurance rate you know you can maintain. Pay your insurance premiums on time, and consider setting up auto-billing. Remember to renew the policy every year and always carry at least the state minimum required insurance.

But if you do miss a payment or fail to renew the policy: don’t worry. Federal law requires insurance companies to offer a grace period and send multiple written notices about the temporary lapse. Typically lasting between 10 and 30 days, depending on the state and insurance company in question; grace periods are final notice—your last chance to patch things up before getting hit with penalties. If you don’t pay by the end of the grace period, you could lose your policy – leaving you uninsured, lapsed, and disqualified from the low rate you used to enjoy.

If your vehicle is leased or financed, there’s an extra layer, here.

States require liability insurance, at minimum. If you’re involved in a traffic accident, there needs to be some entity that can cover any injuries or damage you caused. However, your vehicle is not itself protected by liability insurance. If the car is financed, the loan holder almost always requires the driver to carry more than the state minimum liability insurance. That typically looks like a bundle of liability, collision, and comprehensive coverage riders. But if you allow that insurance policy to lapse? Your creditors will likely purchase a new insurance policy for you, at a much higher rate. Or worse, repossess your car altogether.

If your lapse was brief and understandable – due to a missed payment, lost mail, or incomplete renewal – speak with an agent before accepting the consequences. Your auto insurer might be willing to reinstate the original policy once you pay in full. They’ll likely charge a one-time lapse fee, but the rate could remain the same, and that’s what truly matters.

However, if your lapse was longer than a few weeks – it’s going to be permanently harder to get reinsured. Check your policy details, stay on top of payments, and don’t cancel your auto insurance for short-term savings!

There were so many additional deaths attributable to COVID-19 that the average mortality age declined by a full 1.5 years. You read that right: the pandemic figuratively took more than a year off our lives. Life expectancy at birth – a projected statistic for the total population – fell from 78.8 years in 2019 to 77.3 in 2020.

The financial fallout of the pandemic, coupled with the mentally-paralyzing notion that we could die much sooner than expected, has led to a drastic increase in the popularity of life insurance. The 2021 Insurance Barometer Study, conducted by Life Happens and LIMRA financial services institute, reported some interesting numbers supporting this conclusion:

1.) 59% of people who don’t own life insurance now say they need it

2.) More than 30% of eligible consumers say they’re considering life insurance for the first time as a direct result of the pandemic

3.) Premiums are rising – a sign of sea change in the market. Increasing in some cases by as much as 20% from quarter-to-quarter.

4.) 42% of Americans would experience life-altering financial hardship within six months if a partner or primary earner were to die.

5.) 13% of eligible consumers purchased life insurance for the first time in 2020.

Life insurance customers are also getting younger. That same survey by LIMRA showed that 48% of Millennials said they planned to purchase life insurance coverage in the next year. Only time will tell if that projection is accurate – but it’s not entirely farfetched! Millennials had it especially rough during the pandemic.

For one, young workers faced higher unemployment rates throughout the pandemic. In many cases, this forced Millennials to purchase expensive supplemental insurance to make up for lost employer-sponsored policies. They were also the demographic most likely to have minor children at the onset of the pandemic, and the demographic with the highest amount of outstanding debt per capita. On top of that, serious behavioral differences emerged between different ethnicities. The consumers most likely to purchase life insurance in 2021 were of Hispanic descent, followed closely by Black Americans. This tracks, given the consistently-higher unemployment rates faced by minority Americans during 2020-21. In other words: while Millennials were statistically less likely to die from the virus itself, they stood to lose the most if they did. And minority Millennials were in an even more precarious position.

But I’m not presenting these statistics out of a desire to scare anyone.

On the contrary, I encourage you to strike while the iron is hot! If you’re a young person who recently began to consider purchasing life insurance, two straight years of chaos and upheaval in our insurance markets is starting to work in your favor. Sure, premiums are on the rise. But young people also tend to overestimate the costs drastically. In that same LIMRA survey mentioned earlier, participants were asked, Price-Is-Right-style, to guess the average annual cost of a term life insurance policy. A majority of participants overestimated the cost by more than 3x, and 44% of Millennials surveyed thought life insurance would cost them more than $1,000 a year.

Fact: in 2021, the average annual cost of a 20 year, $250,000 term life insurance policy was $160.

And on that note, it’s never been easier to shop around for life insurance! Many companies are temporarily waiving those notorious, invasive, in-person medical exams that typically stand in the way of getting a quote. And with in-person, agent-driven sales falling off a cliff in 2020, insurance companies finally began to adapt to the digital marketplace that Millennials have preferred for years. And, since they comprise such a large portion of their market, you’d be hard-pressed to find an insurer who hasn’t hopped on this bandwagon.

I’ll finish with one final statistic from that LIMRA survey: 39% of all participants surveyed stated they wished they had bought their life insurance at a younger age.

The last few years have taught us, through painful experience, not to take life for granted. If there are people who love you – people who depend on you – ensure their future by getting insured.

Maybe you’re a young driver without a credit card or loan history. Maybe you’ve avoided credit cards because, like me, you’re pathologically afraid of owing money. Or maybe you weren’t scared enough, tanking your credit early in life. Whatever the situation, credit score remains a critical determining factor in how more-traditional insurance companies determine your rate. If you’re thinking about purchasing or financing a car – take a look at your credit score first. A few months of credit rehabilitation could save you thousands of dollars in insurance premiums down the line.

Credit scores – also known as FICO scores – fall between 300 and 850. They’re generated from a large sample of variables to condense your “creditworthiness” down to one metric. Essentially, it shows lenders how reliable you are with money and paying debts. If you have a high score – anything above 750 – you’ve been paying bills in full, on time, for years and years. Lenders feel that they can trust you with access to more credit, and reward you with lower interest rates on any debt you carry.

In this case, a higher score also means access to more and better insurance.

But if you have a low credit score or no credit history, it can make for a difficult existence. Modern society runs on credit. If you want to take a flight, book a hotel room, or make any large purchase, you’ll be asked to supply some type of credit reference. And those 300 points you get for just being alive? They don’t go very far in proving your creditworthiness. It’s not impossible to access credit with a low score. It’s just, until you’re able to improve your credit score, you’ll likely only be offered very high-interest rates on loans. And be prepared to get rejected outright when applying for certain things, like insurance policies or mortgage(s).

But why, exactly, do car insurance companies want to see your credit score? You’re not borrowing money from them, so why do they ask to see it?

They do it to gauge risk.

Study after study has shown that people with lower credit scores are more likely to file a claim, tend to file many claims, and have more expensive claims. Not the case for high-scorers. And statistical insights like that are an insurance company’s bread and butter. By having a mathematical equation with lots of variables, they can determine just how much of a risk you pose to them with a high degree of granularity.

Nearly every insurance company uses this kind of credit-based insurance scoring – in combination with demographic information, driving history, geography, property value, and claim history – to predict, with startling accuracy, the kind of claims you’re likely to file.

Since the price of your premium is tied directly to these insights, it’s almost always worth setting back plans for a few months to focus on building or raising credit before starting down the road of any significant purchase.

We go to the doctor and are told that something – a test, service, or procedure – is absolutely necessary for our health and well-being. We ask the doctor if they’ll take our insurance and get a resounding: “yes – we can do that.” Weeks later, when the bill comes, we discover that the procedure wasn’t covered by insurance, after all.

What happened?

It could be that the treatment was medically necessary, but uncovered due to the nature of the procedure, like cosmetic surgery to remove a facial cyst. Or, it could’ve been denied because your insurer deemed the procedure experimental, like the use of Remdisivir for treating SARS-COV-2. Or, you could’ve been out-of-network in some way. Maybe you saw your usual doctor at a different facility, with a separate Tax ID number, which put you out-of-network. Perhaps you were at an in-network hospital, but the on-call doctor was out-of-network.

A wide array of things can go wrong. But, how were we supposed to know? We may have been incapacitated or even unconscious at the time of treatment. We may have made every effort – going in-network to a trusted provider – and still receive surprise bills. What’s going on behind the scenes?

Every single blood test, scan, and surgery – every IV bag and syringe under a hospital’s roof – has a universal, five-digit billing code called a “CPT.” As you’re treated, the codes get added to your chart. The hospital bills those CPT codes, combined with a series of diagnostic codes that describe your medical state, to your insurer. From there, the decision to pay or deny a claim relies on internal policies relating only to those codes – not the actual person. 99% of the time, the decision looks at the combination of CPT and diagnosis code to determine whether or not it’s a covered service.

This means that it’s expected you’ve asked the hospital for the CPT codes associated with your treatment, and then passed the codes on to your insurance company to check if they’re covered, before you even arrive at the ER. A uniquely-insane feature of the United States healthcare system.

Pricing is all over the place, too. If you’re lucky enough to have an insurance plan that only charges copays for everything, you don’t have to worry about so much. You’ve basically won the healthcare lottery. But if you’re like the other 90% of us who can only afford high-deductible plans, the negotiated rate for a given service makes all the difference. Negotiated rates are discount agreements between insurance companies and providers within their network. They’re widespread and pretty much the only reason anybody can afford treatment in America. For example, a PET scan costs around $8500, retail. But if you go to an in-network doctor, at an in-network hospital, you might only have to pay $850 – a 90% cost reduction.

If you need an expensive procedure, like a PET, MRI, or CAT scan, there could be as many as 4-5 in-network facilities in your area. But, the negotiated rate at each facility could run from a few hundred dollars at a small private clinic, to thousands at a large university hospital. You should call your insurance ahead with the CPT code for the test and request that they supply you with the negotiated rates for a few facilities in the area. Most insurers offer this pricing tool now. But again: you have to know how to ask for it.

Just never, EVER expect the doctor’s office to know the details of your plan in advance. On average, they manage something like 3,000 patients across 25 different plans. And the front desk is more than happy to say, “we’ll take your insurance.” But they’re just trying to keep your business.

What they actually mean is: “Sure, we’ll physically take your insurance card and bill them. But are we in your network?  Doesn’t matter as long as we still get paid.”

1. Type of Plans

There are four different health insurance plans to choose from that suit you and your loved ones the most. The plans include:

• Indemnity Plans

Indemnity plans offer the most freedom in terms of choosing doctors and hospitals but also have higher deductibles and out-of-pocket costs.

• Managed Care Plans

Managed-care plans usually have lower premiums, but you are limited to a specific network of providers.

• Preferred Provider Organizations (PPOs) Plans

PPOs allow you to see any doctor within the plan’s network but also have a higher deductible than other types of plans.

• Point-of-Service (POS) Plans

POS plans are a mix between PPOs and managed care plans where you can choose either in- or out-of-network providers but typically have lower deductibles than PPOs.

2. Deductibles

Your deductible is the amount of money you have to pay out-of-pocket for your medical expenses before your insurance plan starts to pay. Deductibles can range from a few hundred dollars to a few thousand dollars.

Additionally, some plans require that you meet your deductible before any coverage kicks in, while others may offer some coverage (like preventive care) even before meeting your deductible. So, it’s vital to consider how much you’re willing and able to pay should you need to use your health insurance.

3. Premiums

Your premium is the amount of money you pay every month for your insurance coverage. Premiums can vary greatly depending on the type of plan you choose, the deductible, your age, whether you smoke, and other risk factors. However, it’s essential to remember that cheaper plans may have higher deductibles and out-of-pocket costs, while more expensive plans may have lower deductibles and out-of-pocket costs.

Thus, it’s essential to find a plan that you feel comfortable with financially. Besides, health insurance premiums are tax-deductible if you itemize your deductions on your taxes. Moreover, suppose you can’t afford to pay your premium in full. In that case, many insurance companies offer payment plans to help break the cost down into more manageable monthly payments to fit your financial situation.

4. Coinsurance

Coinsurance is your share of the cost of a covered medical service. It’s usually calculated as a percentage of the allowed amount for the service (for example, 20%). So, if your coinsurance is 20% and an MRI costs $1000, you would pay $200, and your health insurance company would pay the other $800.

Some insurance plans have no coinsurance, some have a fixed amount (like $100), and others may have different percentages for different services. Thus, be sure to inquire about the availability of coinsurance and find the one you are comfortable it that can suit your financial needs.

5. Medicine Cover

Finally, it’s essential to check what type of medicine your health insurance plan covers. Many programs only cover generic drugs, while others cover brand-name drugs. However, some plans offer a more comprehensive range of coverage for both generics and brand-name drugs.

Consequently, it’s essential to know which type of medicines you and your loved ones need and find a plan that covers those drugs. You can usually find this information on the insurance company’s website or by speaking to a customer service representative. Otherwise, choosing the wrong plan that may not cover your medicine may be costly when you need them since you will pay out of the pocket.

What is car insurance?

Auto insurance is a type of insurance that covers the car owner and their passengers against the financial consequences of being involved in an accident. The cost for this type of insurance depends on several factors, such as the amount of coverage you choose and where you live.
The good news is that there are ways to save on auto insurance. These methods include purchasing your policy from a company with a good reputation and getting discounts when buying multiple procedures at once.
Here are some other tips for saving on car insurance:
– Carefully review your deductible before choosing what you want to spend for coverage.
– Visit the state’s official website to find out about programs like Good Samaritan laws or any other discounts that may help you get better rates.
– If you have more than five years of driving experience, consider taking an online course in defensive driving to improve your driving record and potentially save more money on auto insurance premiums.

What should you be looking for in a policy?

There are three aspects of an auto insurance policy that you should be concerned with: cost, coverage, and deductible. Coverage is the type of protection you want to receive from your insurer. In general, there are two types of coverage: liability and comprehensive. Liability covers any accident-related damages and injuries to others caused by your car. Comprehensive covers damages from natural disasters like tornadoes or hurricanes. Limits for these two types of coverage differ based on the make and model of your vehicle and your risk factors like driving record and age. Deductibles are how much money you pay out-of-pocket before the insurance kicks in to cover damages.

Tips for saving on auto insurance

The first step to saving on auto insurance is choosing the right coverage. You should check your current policy and go over it with a fine-toothed comb. If you are in a situation where you need to upgrade your coverage, you can do so by adding comprehensive, collision, or comprehensive/collision. If you don’t see anything that meets your needs or if you need advice, speak with an agent.
If you want to save money on the cost of insuring your car, don’t be afraid to ask for discounts. Some companies offer discounts for purchasing car insurance through their website. Additionally, many companies will give discounts for people who buy multiple policies from them at one time. This can save hundreds of dollars per year.

Conclusion

Being a responsible and financially-savvy consumer can help you save money on car insurance. To help you save on car insurance, these tips will help you understand what type of coverage is required for your vehicle and give you tips to save money on your policy.

Having pet insurance could prevent you from having to choose between a best friend’s life and all your money.

What Does Pet Insurance Cover?

A basic pet insurance policy covers the costs of basic diagnostics, like x-rays, blood tests, and annual checkups. It’ll also provide coverage for some essential treatments – but the particular services covered vary from plan to plan. You’ll have to do a bit of research to figure out what policy is best for your pet.

When shopping, first consider any medical expenses your pet already faces. Those expenses are bound to occur, so the plan you pick should cover certain or near-certain events. However, some owners may decide that accident-only coverage is best if their pet is already in good health and money is tight.

Having grown up around dogs, I think the proper “middle-ground” plan for a young pet includes accident coverage and reimbursement for necessary preventative costs. It’s flat-out irresponsible not to spay, neuter, and vaccinate your animals. In some cases, it’s against the law to have a pet that’s unvaccinated against certain deadly transmissible diseases like tapeworm and rabies. And if your pet’s a little older, it’s also important to consider potential additional costs, like medication or physical therapy. Basic accident and illness coverage isn’t really enough for aging animals.

In any case: you’ll want a pet health insurance policy with an open-peril policy rather than named peril. Open peril means pretty much everything is covered unless it’s specifically called out as an exclusion. Pets are way, way too unpredictable to benefit from the strict limits of a named-peril policy.

On that note: let’s discuss what isn’t covered in a typical pet insurance policy.

What Isn’t Covered?

It doesn’t matter which pet insurance company you went with or how much coverage you bought. Your pet will never be covered for everything. The most common snafus owners encounter when dealing with pet insurance involve waiting periods, chronic conditions, and pre-existing conditions.

Most pet insurance policies have waiting periods that prevent you from claiming anything until 2-3 weeks have passed. The exact length varies, but insurers use it as an extra layer of fraud protection – preventing owners from making claims right away or making claims for pre-existing illnesses that they were already aware of before purchasing coverage. Many new insurers offer shorter waiting periods of 2-3 days now, but certain conditions like hip dysplasia and cruciate ligament deterioration still retain months-long waiting periods.

Since veterinary records are openly-available: your policy won’t cover conditions that’d already been diagnosed, or that your pet showed symptoms of before those waiting periods ended. So, for example: if your insurance states that they cover diabetes treatment under a basic policy, they’d still only reimburse you if your pet was diagnosed with diabetes after your policy went active.

Final thoughts:

It should go without saying, but pet insurance is for your pet. You can’t use it for human medical care. You can’t even use it for another pet, if you have more than one.

You heard that right: if you share care of your pet with a partner, that basic pet insurance policy will only cover expenses in the policyholders’ name. The insurance company can only share reimbursement with married persons. And that basic policy won’t cover more than one pet, either. You’ll want to make sure you have a separate policy for each pet.

Or, look into your insurers’ options! They’re happy to sell you more coverage, and it’s never been easier to customize a policy. Multi-pet discounts are becoming a popular incentive, and it’s only a small fee to add a second owner to an existing policy.