What is Pet Insurance? Pet insurance is a health insurance policy for your pet that pays for medical expenses and sometimes other costs. Pet insurance plans are typically reimbursement-based, meaning you pay up-front for the pet’s vet bills and submit a claim to the insurance company. A few companies can pay the vet directly, which helps keep your out-of-pocket payments low. There’s usually a deductible before coverage starts. For example, you might pay the first $500 in vet bills before the pet insurance starts to pay. Even after your deductible is paid, the pet insurance may not pay 100% of vet bills. You can typically choose your reimbursement level. Common reimbursement options are 70%, 80% or 90% of your vet bills. How to Find the Best Pet Insurance for You Pet insurance plans