Cat Lying Down and Playing, her pet parent my want to know about insurance reimbursement

Why Does Pet Insurance Reimburse Me Instead of Directly Paying the Vet?


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Pet insurance is a great way to protect your fur-friend-related financials from unexpected veterinary bills. There’s an obvious benefit to a big (or little!) insurance payment. What might not be obvious is why, when it comes to those treatment costs, you first must pay the vet directly then claim an insurance reimbursement.

After all, often with human private health insurance you pay for treatment costs leftover after the insurer pays the health provider directly.

It’s totally valid to wonder why things are different in the pet insurance ecosystem. In this article, we delve into the ins and outs of pet insurance reimbursements and unravel the reasons behind this common payment model.

A dog looking out of a car, her pet parent my want to know about insurance reimbursement

What’s an insurance reimbursement?

At its core, pet insurance is designed to soften the financial burden of unexpected medical expenses for your beloved fur kid.

Reimbursement is the mechanism through which pet insurance providers contribute to these expenses. In simple terms, it involves you paying upfront for your pet’s vet care, and then your insurance provider paying you back based on your policy’s terms.

How insurance reimbursements work

Pet insurance reimbursements can be compared to a reimbursement you might receive from your job for business-related expenses like travel.

When your pet needs medical attention, you pay the vet bill out of pocket. Afterward, you submit a claim to your insurance provider, accompanied by the right documentation such as invoices, receipts, and medical records.

Your insurance company reviews your claim and, if it meets the policy criteria, pays you back for the eligible expenses.

A cat on the beach, her pet parent my want to know about insurance reimbursement

Why the reimbursement model?

Why do we as pet insurance companies do it this way? Wouldn’t it make more sense to just pay the vet directly? Here are some reasons why pet insurance companies use a reimbursement model.

#1 The sheer volume of pet health providers

Have you ever tried to coordinate a group project with a lot of people? It can be tough, right? Especially if everyone has their own way of doing things.

Well, that’s a similar situation to what pet insurance companies are in. They have to work with tens of thousands of different vet practices, each with their own pricing structure, protocols, and billing methods.

If pet insurance companies were to pay vet bills directly, the logistics involved would require them to hire more people to manage that. This, in turn, means they’d need to spend a lot of money to manage the process. The ultimate result is that pet insurance would be more expensive for everyone in each insurer’s customer pool.

#2 Insurance reimbursement is based on an existing model

Healthcare models across the globe are another reason why pet insurance companies use reimbursement. In many countries, healthcare is funded by the government. People can go to any doctor or hospital they want.

This gives people more freedom of choice and it’s something that pet insurance companies across the world want to emulate. By using a reimbursement system, they allow pet parents to take their pets to any vet they want, regardless of whether the vet has a relationship with the insurance company.

This means there’s no such thing as an “out of network” provider for your pet.

A beautiful golden coloured dog, her pet parent my want to know about insurance reimbursement

#3 Less risk of fraud with insurance reimbursement

To reduce insurance fraud, pet insurance companies want to make sure they’re only paying for real vet bills.

Imagine that you’re at a store and you’re using coupons to help pay for some purchases (picture those 2-for-1 deals and discounts big supermarkets provide on the back of their receipts). The cashier has to scan the coupon to make sure it’s valid. They also have to check that the items you’re buying are eligible for the deals.

The reimbursement process for pet insurance is similar. The insurance company has to review each claim individually to make sure the services are included in the customer’s policy, before they pay out. They also cross-reference with the documentation and notes the vet sends across.

Following a standard claims process for each insurance payment helps to ensure customers are playing by the rules and that the company is only paying for legitimate claims. This helps keep premiums down for everyone.

#4 Streamlining the process

Reimbursement is a win-win for pet insurance companies and vet clinics in that the former don’t have to work through setting up and managing relationships with thousands of vet clinics, and the latter don’t have to spend lots of time billing multiple insurance companies, each with its own complicated rules and requirements.

Instead, vet clinics can simply bill pet parents directly, just like they would for any customer situation where insurance cover didn’t apply. This keeps things simple for everyone involved and helps to keep costs down. It also helps keep vets focused on the real work – saving pet lives.

Here’s a fun analogy: Imagine you’re running a lemonade stand. You don’t have time to deal with a bunch of different currencies, so you only accept the local currency.

NZ pet insurance companies don’t have time to deal with all the different billing systems and requirements of vet clinics. They want to spend as much of their time and money on reimbursing legitimate customers quickly, so those customers can focus on their pets healing.

A cute white dog on a lawn.

Making a pet insurance claim for reimbursement

With PD Insurance, making online pet insurance claims is easy and fast. Say you take your fur kid to the vet for an illness or accident. The vet works through tests, a diagnosis and treatment, which could include surgery, a hospital stay, post-surgery medicine, etc.

After you’ve received and paid the related vet bills, you’d submit your pet insurance claim and documentary evidence (i.e. paid invoices, treatment notes). Depending on your plan, your insurance provider might return an insurance payment of 100% of your eligible bills minus the excess if you haven’t reached your plan’s claims sub-limit or annual total defined benefit limit. You may also contribute a co-payment.

If you’re with a provider like PD, then you can submit your claim online via the website using your personal portal. Alternatively, you can email the claims team. With PD, you can do this any time of day, any day of the week. It’s fast and simple.

Now you know a little bit more about pet insurance reimbursement, are you interested in becoming a pet insurance buff? Here are some more pawsome resources:

An insurance payment that makes sense

With pet insurance, instead of worrying about depleting your savings when your pet’s sick or injured you can act quickly and get them medical care. It’s all about giving both of you a soft landing.

Your pet plan can cover health care costs like x-rays, bloodwork, surgery, dental and many other diagnostics and treatments. It just depends on the level of pet insurance cover you choose. We have three pocket friendly PD Pet Insurance plans you can look at.

Click below to get one or more months of free award winning pet insurance today.

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