How Do Pet Insurance Deductibles Work?
Pet insurance is growing in popularity among pet parents who want financial protection for their pets' medical care. A pet insurance policy can provide peace of mind for pet owners by covering the sometimes significant expenses of unexpected veterinary care.
Understanding what a pet insurance deductible is and how it affects your out-of-pocket expenses can help you benefit most from your policy. Keep reading to learn more about the different types of pet insurance deductibles and how they impact your veterinary costs.
Table of contents
- What is a deductible in pet insurance?
- How does a pet insurance deductible work?
- Types of pet insurance deductibles
- The difference between a pet insurance deductible and a reimbursement percentage
- What is a good deductible for pet insurance?
- Pet insurance deductible FAQs
- Summary of Money’s guide on how pet insurance deductibles work
What is a deductible in pet insurance?
Simply put, a deductible is the amount you’ll pay toward your pet’s vet bills before your insurance reimburses you for covered expenses.
The deductible cost is something you pay in addition to your insurance premium. Here’s a breakdown of the potential costs you’ll pay with pet insurance:
- Premium: You’ll pay a monthly or yearly premium for the policy. The cost depends on your dog’s health, age and breed as well as the coverage you choose.
- Deductible: The deductible is the amount you owe out of pocket before your policy reimburses you for eligible veterinary expenses.
- Services not covered: Your pet insurance policy will reimburse you for a percentage of the cost of all covered treatments. You’re responsible for the remainder of the treatment cost, as well as any exclusions not covered by your policy.
Deductibles apply to accident and illness pet insurance policies. Wellness plans — plans that cover routine care such as wellness exams, teeth cleaning, vaccinations and other preventative care — typically don’t have deductibles but may have annual limits.
If you know or suspect your pet may need specialized treatment, review any pet insurance policy you’re considering to see what it may exclude or restrict. Reviewing different offerings from the best pet insurance companies to find coverage appropriate to your needs is an excellent first step.
How does a pet insurance deductible work?
Deductibles may vary depending on the insurance company and type of policy you get. You can find pet insurance with an annual deductible as low as $100 or in the $500 to $1,500 range. It’s important to note that the lower your deductible, the higher your monthly premium will be, and vice-versa.
Let's say you receive a $1,500 vet bill in January, and your annual deductible is $500. You must pay your deductible in full before your insurance takes effect. After that, all other covered vet expenses throughout the year will be eligible for reimbursement up to your coverage limits because you’ve already met your deductible.
However, there are different kinds of deductibles depending on your policy. Understanding the different types will help you minimize your pet insurance costs while ensuring you can afford the care your pet may need.
Types of pet insurance deductibles
There are three primary types of deductibles: annual, per-incident, and lifetime per condition.
Annual pet insurance deductibles
Most pet insurance policies require an annual deductible, though the amount may vary. This deductible is how much you must pay toward veterinarian costs during your policy period before your insurance will reimburse you for covered expenses. You only have to pay this once each policy year in order to receive coverage — it resets when your policy renews for another year.
Per-incident pet insurance deductibles
A per-incident deductible — also called a per-condition deductible — means you’ll have to pay a set amount each time your pet requires treatment. For instance, if you take your pet to the vet for vomiting, the visit costs $250 and your per-incident deductible is $100, you’ll pay $100, and your pet insurance will cover the rest up to your policy’s reimbursement limit.
However, suppose you return a month later for a different issue, such as an ear infection. In that case, you’ll have to pay a $100 deductible again before your insurance policy kicks in to help cover the cost of any needed veterinary care your pet needs.
This type of deductible can get especially expensive if your pet develops a condition that requires frequent vet visits.
Lifetime per-condition pet insurance deductibles
Pet insurance with a lifetime per-condition deductible requires you to pay a set amount for each condition your pet may develop. Per-condition policies are typically high-deductible pet insurance options. They’re best suited for breeds prone to conditions that require long-term care, such as golden retrievers who often develop cancer and dachshunds who regularly have spinal and neurological issues.
The benefit of lifetime per-condition deductibles is that your insurance plan will fully cover any treatments for chronic or severe conditions that otherwise might be prohibitively expensive. Though this type of insurance is more costly than low-deductible pet insurance, it’s an excellent way to ensure you can afford any medical care your pet may need.
The difference between a pet insurance deductible and a reimbursement percentage
When choosing a pet insurance plan, it’s essential to understand the difference between a deductible and a claim reimbursement percentage. The deductible is the out-of-pocket amount you’ll need to pay before your insurance kicks in, while the reimbursement rate refers to the percentage of the total cost that your insurance will cover.
For example, if your plan has a $500 annual deductible and an 80% reimbursement percentage, it will cover 80% of all covered veterinary bills after you pay the $500 deductible.
For a vet bill of $1500, when you haven’t paid toward the deductible from a previous visit in this policy period, here’s the breakdown:
This is how much the veterinarian bills you.
You must pay your deductible in full before your insurance kicks in.
Reimbursement Rate
The remaining bill after paying the deductible is $1,000. Your insurance company will reimburse you 80% of that amount, which is $800.
In this example, you pay $700 (including the deductible) and the insurance company covers $800.
What is a good deductible for pet insurance?
The best deductible for your pet insurance policy depends on your specific circumstances and preferences. Keep in mind that your options can vary based on the pet insurance company you choose, but many offer annual deductible amounts ranging from $100 to $1,500.
If you prefer lower out-of-pocket expenses in case your pet requires emergency veterinary care or you have a breed prone to conditions that require ongoing or specialized treatment, a low-deductible plan may make more sense. However, keep in mind that most pet insurance doesn’t cover pre-existing conditions. If your pet already has a medical condition before you buy pet insurance, treatment for that issue may not be reimbursed.
If you're comfortable paying higher out-of-pocket expenses in exchange for lower monthly premiums, choosing a higher deductible may be a good fit for you. The same is true if you don't foresee your pet needing a lot of veterinary treatment. But remember, pet insurance covers you financially for accidents and illnesses. Many health issues your pet may experience are unpredictable.
The benefits of a low-deductible pet insurance plan
Veterinary care can often be costly, and a low-deductible pet insurance plan can give you peace of mind regarding your expenses. A low-deductible pet insurance policy will require fewer out-of-pocket expenses before your insurance coverage kicks in to pay all or a portion of your vet bills.
This type of plan can be especially beneficial for pet owners on a budget who may not be in a position to deal with significant and unexpected out-of-pocket expenses to meet their pet’s medical needs.. With a low-deductible pet insurance policy, you pay more each month in premiums, but if your pet regularly requires veterinary care, you may save a significant amount of money over time.
The benefits of high-deductible pet insurance
High-deductible pet insurance plans will typically come with a cheaper monthly premium. Still, you’re responsible for paying more out of pocket before your pet insurance coverage kicks in. Depending on your situation, this may not always be a bad idea.
A high-deductible pet insurance plan may be worth it for younger pets or breeds that aren’t known for having health problems. If you rarely visit your vet but still want pet insurance as a safety net for emergencies, you might save significantly compared to a lower deductible policy.
Pet insurance deductible FAQs
Is there pet insurance with no deductible?
Though you may find a no-deductible policy, most pet insurance plans will require one.
As with any insurance-buying decision, it's essential to do your research and Compare pet insurance plans, including coverage, deductibles, waiting periods, annual limits and reimbursement rates. Other critical factors to consider are your budget, risk tolerance, and your pets' health.
Remember that if you have a $0 deductible pet insurance policy, you'll likely pay higher premiums than you would with a policy that requires a deductible.
What veterinary costs count towards a pet insurance deductible?
You must pay your pet insurance deductible before your insurance will reimburse you for any treatments under your policy. Typically, veterinary costs that count toward the deductible include care related to typical illnesses and injuries, depending on the type of policy you have. Extreme illness or injury cases are likely to be much more expensive, and different pet insurance companies and policies may have a cap on how much they'll cover.
If you have a wellness plan in addition to your pet insurance policy, the routine care covered by the wellness plan typically isn’t subject to the deductible. However, check with your insurer for specifics on how your pet insurance works.Which pet insurance deductible option should you choose?
Ultimately, deciding which type of pet insurance deductible is best for your needs is up to you. Consider your pet's age and breed, budget, and the likelihood that your pet may need regular or ongoing care for a chronic condition.
Talking to a representative from any pet insurance provider you're considering can be helpful. They should be able to provide more insight and advice on the different deductible optionsDoes each pet have a deductible?
Summary of Money’s guide to pet insurance deductibles
When learning how to buy pet insurance, understanding how deductibles factor in is critical. As you’re choosing a pet health insurance plan, you’ll typically have a choice between annual, per-incident, or lifetime per-condition deductibles and low or high deductibles.
While a lower deductible may require fewer out-of-pocket expenses, the monthly premiums typically cost more than similar policies with a higher deductible. Pet insurance policies may also have limitations, restrictions, or caps on the total amount they’ll pay to cover specific conditions or treatments. That’s why reviewing your pet insurance policies carefully is always a good idea to ensure you understand what it does and doesn’t cover.
Ultimately, deciding which deductible suits your pet and your budget is up to you. You can contact different pet insurance providers with any questions you may have.