What Is Pet Insurance?
As with other types of insurance, pet insurance is the transfer of risk to a 3rd party in exchange for paying a premium. In other words, you the pet owner, are paying a premium to the pet insurance company for them to assume the risk for your petâs covered medical expenses. Neither you nor the insurance company want your pet to be sick or injured, but by you paying the premium, the pet insurance company is assuming the economic risk instead of you.
This is the reason no insurance company can cover pre-existing conditions. Covering a pre-existing condition would not be a transfer of an unknown risk, but a transfer of a known cost. Pet insurance in another way, it acts very to similar to Medical Insurance, but is classified as Property Insurance.