The Impact of "Reasonable and Customary Fees" on Your Pet Insurance Policy

In the realm of insurance coverage available to people in our world, pet insurance is likely the most unstable due to its relative new status. For many years pet insurance was laughed off as a waste of money in something that did not necessarily have a need for insurance coverage. Now that pet insurance has started to gain legitimacy in the insurance and financial worlds it is becoming more scrutinized.

One of the things that is prevalent with pet insurance policies that is also normal for health insurance policies and auto insurance policies is the definition of "Reasonable and Customary Fees". This idea was put in place to try to avoid people abusing the system and effectively raising the rates of everyone associated with pet insurance. For a field that has been trying to gain legitimacy and relevance that is very important.

So, what are "reasonable and customary fees"? Basically it is the amount determined to be fair and reasonable in your particular area of the country. The idea being that a procedure performed on a dog in Los Angeles may cost more than the same procedure that is performed in Oklahoma City. This isn't because a dog is worth more in Los Angeles or that people in Los Angeles are more financially stable, just that the cost of living is generally more than in Oklahoma.

Your questions at this point likely surround how these prices or fees are determined by your pet insurance company. The process is relatively simple and is much the same as deciding on an agreed upon amount for work done on your car in the auto industry. Your insurance company will basically survey all of the veterinarians, or most of them anyways, in your area and determine what they charge for a given service. Taking all of these into account the insurance company will then set a limit for what they will pay for the service.

These reasonable and customary fees can impact your policy because they will cause you to pay more than you are insured for at times. This means that you may end up having to pay for your deductible and your premiums and then pay fees above and beyond what the insurance company would. The best thing that you can do is approach your vet to see if they do business with your insurance and if they comply with these fee schedules. If they do you should be ok, if not you should start looking somewhere else.