Pet insurance does not work like private health insurance. Health insurance is ‘community rated’, which means that everyone pays the same premium for the same health insurance, regardless of their individual health status, age or claims history. This is not the case for pet insurance.
Health insurance providers are able to ‘community rate’ health insurance because there are other contributing factors in the human health care system, such as Medicare and government rebates and subsidies, which is not the case with veterinary care and pet insurance.
Pet insurance claim reimbursements are paid for by the premiums received by those who insure their pets. To ensure each person pays a fair price for their pet insurance, premiums vary depending on the risk factors for you and your pet.