Why Choosing a Higher Pet Insurance Deductible Can Pay Off

The size of deductible you choose for your homeowners and car insurance policies can hugely affect the premiums you pay. The same applies to the policies of the best pet insurance companies — and can be a compelling reason to choose a high deductible rather than a smaller one.

When we surveyed pet insurance costs last year, we found the size of deductible — the amount you must pay out-of-pocket before the insurance policy kicks in and reimburses you a percentage of medical bills — to be among the biggest factors in determining the premium you'll pay. The higher the deductible you select, as a rule, the lower the premium you pay. Only the policy's scope (whether it covers only accidents, say, or also includes illness) and the pet's species (dogs consistently cost more to insure than cats) had a greater cost impact.

On average, we found pet parents will pay nearly $20 more a month by buying a policy with a $200 annual deductible rather than one that makes you responsible for the first $500 in charges. The savings nearly double — to about $35 a month — if you opt for a deductible of $1,000.

The range of deductibles available for a pet insurance policy varies widely between insurers, and there are two main types of deductibles, too. Here are details on the deductibles offered with pet insurance plans, company by company, along with advice on how to decide on the deductible that suits your pet and your budget. The choices you make can affect whether getting pet insurance is worth it to you.

Table of Contents

• Types of Pet Insurance Deductible
• A Higher Pet Insurance Deductible: Pros and Cons
• Comparison of Life Insurance Policies for Pets
• Pet Life Insurance FAQs

Types of Pet Insurance Deductible

Here’s a rundown of the three main types of pet insurance deductible offered by pet insurance providers, and how prevalent each is.

Annual pet insurance deductibles

By far the most common type of deductible with pet policies is the familiar annual one. With this arrangement, you must, within a given policy year, pay the selected deductible amount out of pocket before the plan starts reimbursing you for veterinary services. The option resets every year, so each time the policy cycle renews you have to meet the deductible again.

Per-condition pet insurance deductibles

All but one of the companies we researched for this story used this option. Trupanion alone offers per-condition deductibles — also known as per-incident or simply incident deductibles. As the name implies, these involve a separate deductible for each condition for which the pet may require treatment — meaning you pay down a different deductible each time your pet goes to the vet for a different reason.

Per-condition deductibles require keeping track of what you’ve spent, condition by condition, in order to know if and when you’ll qualify for reimbursement. And with each new medical problem, you begin paying a different deductible — which could mean waiting longer for bills to begin to be reimbursed than if you only had a single, all-in-one annual deductible to meet.

On the upside, though, if your pet does develop an ongoing medical issue, you pay a per-condition deductible just once, and need never again pay a deductible for that condition for as long as you have the policy.

Diminishing pet insurance deductibles

Another company with a unique deductible arrangement is Embrace, which rewards policyholders who do not make a pet insurance claim. Embrace’s deductible diminishes over time, dropping by $50 for every year you go without filing a claim for covered care. The change does not itself increase the premium you pay — although keep in mind that pet premiums do typically rise over time as the animal ages, regardless of the policy deductible.

A Higher Pet insurance Deductible: Pros and Cons

As is typical with health insurance for you and your family, pet insurance can come with co-pays and deductibles. Here’s what to know about the dollar-value range of these policy features along with how deductibles work, and the advantages and disadvantages of choosing one that’s on the higher side — as we recommend.

Amounts for Pet Insurance Deductibles

Pet insurance policies typically allow you to choose a deductible of between $100 and $1,000. The most frequent options are deductibles of $250, or thereabouts, and $500. Outlying amounts can go as low as $50 or as high as $1,000.

Two companies we surveyed — Trupanion and TrustedPals — have a $0 deductible option, which allows reimbursements to begin immediately, and Trupanion allows you to select the deductible you wish, in $5 increments from $0 to $1,000.

Note, too, that policies also offer a choice in reimbursement percentages — that being the proportion of eligible veterinary bills that are covered after your deductible is met, with a higher percentage usually triggering a high premium. Popular choices include 70%, 80%, and 90% of those eligible expenses — which leaves you with a coinsurance obligation to cover the remaining 30%, 20% or 10% of every vet bill, respectively.

The Pros of a Higher Pet Insurance Deductible

Within any one company, though, higher deductibles trigger lower premiums, as a rule. The opposite applies to the reimbursement rate. There, the higher the payout you elect to have the pet insurance provider cover, the higher your monthly payment will be.

Maximizing your deductible and minimizing your reimbursement rate can better serve the biggest financial advantage of pet insurance: to provide financial help in the (unlikely) event your pet suffers a major medical problem due to illness or a serious accident.

By paying less in premiums — and perhaps directing the savings to a savings account for pet care — you’ll be in a stronger position to cover the hefty co-pays that come with a medical crisis. You’ll also be in a position to use those savings as premiums rise with the pet’s age, especially during the senior years. Finally, you won’t overpay for pet insurance during the many years in which your total spending on care that’s covered under a policy won’t reach even a fairly low deductible. (Keep in mind that pet insurance doesn’t cover preventive care such as vaccinations unless you add an extra-cost wellness plan.)

In the long run, a larger deductible may serve you better to be ready for those critical times, should you be unlucky enough to experience them. You'll have protection against vets' bills that run into the thousands of dollars, while keeping premiums low in the years when costs run only into the hundreds — which will probably be most or all years of your pet's life. And the money you save in premiums over the years can be used to help cover the co-pays on those big bills.

The Cons of a Higher Pet Insurance Deductible

The downside to choosing a deductible that’s on the high side is that you’ll bear a larger cost for vet care due to illness or accidents until the larger amount is met. Our analysis suggests that, in many years, covered care may not reach those higher levels. Until spending does reach such a level, you’ll be on your own, covering it in full, until spending reaches the higher amount — if it even does so. Also, meeting a deductible gives you a certain freedom, in that you may feel more liberated to visit the vet. And the longer you are still meeting a deductible, the more reluctant you might be for financial reasons to make an emergency vet visit, say, for a problem that might be serious.

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Comparison of Life Insurance Policies for Pets

Here are the options various companies offer with a number of companies that offer pet health insurance.

Pet-insurance deductibles, company-by-company