What Is A Pet Insurance Deductible?

A pet insurance deductible is an amount of money you must pay toward vet costs over a certain period of time (often a policy year) before your pet insurance plan will reimburse you for veterinary costs covered by the policy.

For example, if you buy a pet insurance plan with a $250 deductible, you would need to pay that amount to the vet before your insurer starts to reimburse you for veterinary expenses. Let’s say your puppy ingests a dog toy that needs to be surgically removed and the cost of the surgery is $4,000. You’ll be responsible for $250 and your insurer will cover the balance, based on your co-insurance level (such as 70%).

Choice for pet insurance deductibles vary by insurer. Common options include deductibles between $100, $250, $500 and $1,000. Some insurers offer deductibles as low as $0, such as Trupanion.

The higher your deductible, the lower your monthly pet insurance premiums. That’s because your insurer will pay out less if you file a pet insurance claim.

Some pet insurance plans have an annual deductible, which you must meet every year. Other plans have a per-incident deductible, which means you’d need to meet a deductible each time you take your pet to the vet for a problem covered by your policy (such as an ear infection or bite wounds).

Once you meet your deductible, your insurer will reimburse you for a percentage of the remaining cost, depending on the reimbursement level you choose.

Here’s an example of how a typical pet insurance claim would work:

• Your cat appears to be in pain and you take them to the vet. The diagnosis is a urinary tract infection and treatment costs $1,100.
• Your pet insurance has a $250 annual deductible and 90% reimbursement level.
• You pay your $250 deductible.
• You are responsible for 10% of the remaining cost ($850 x 10% = $85).
• Your insurer reimburses you $765 ($850 – $85 = $765).

Veterinary expenses and other pet-related expenses that are not covered by your pet insurance plan will not be covered by your deductible. For example, expenses such as routine wellness exams and grooming do not count towards your deductible.

The most common types of pet insurance deductibles offered by insurers are annual deductibles, but there are also per-incident deductibles. In addition, Trupanion offers a per medical condition lifetime deductible.

Annual deductible

Annual deductibles must be paid toward vet costs each annual policy term. Once you meet your deductible, your insurer will reimburse you up to your reimbursement level. You’ll be responsible for your annual deductible when your policy renews the following year.

For example, say you and your dog are hiking and your dog breaks their leg. Treatment costs $2,700 and you have a $250 deductible. After you pay your deductible, you are reimbursed for the surgery costs.

Now let’s say your dog gets sick three months later and treatment costs $600. If you are in the same policy year, you won’t be responsible for your $250 deductible because you already paid it. But if your dog gets sick after your policy renews, you will be responsible for the deductible because it’s a new policy year.

Per-incident or per-condition deductible

A per-incident pet deductible has a separate deductible for each problem you make a pet insurance claim for, which renews annually. This is often used for accident-only insurance.

For example, let’s say your dog breaks their leg while on a hiking trip, treatment costs $2,700 and you have a $250 per-incident deductible. You pay your deductible and are reimbursed for the surgery costs. Three months later, your dog is hit by a car and requires surgery costing $3,700 to repair a broken pelvis. You’ll again pay the $250 deductible since this is considered a new incident.

Per-condition lifetime deductible

Trupanion’s plan is different from both annual and per-incident, offering a per-medical condition lifetime deductible. This means you have to pay that deductible for each separate problem your pet has, but only once in your pet’s lifetime.

For example, say your dog develops a chronic condition, such as kidney disease, and the yearly cost of care is $1,000. For a plan with a lifetime deductible of $200 and 90% reimbursement, you’d be reimbursed $720 the first year ($1,000 – $200 = $800 @ 90% = $720), then $900 every year thereafter.

Pet insurance is generally reimbursement-based, meaning you will pay the vet for your pet’s treatment, then submit a claim to your pet insurance company for reimbursement. Here is the difference between a pet insurance deductible and reimbursement percentage:

• Pet insurance deductible. This is the amount of money you need to pay before your insurer begins to reimburse you. For example, if you have a $250 deductible and your claim is $1,000, you’ll be responsible to pay $250 and your insurer will reimburse you up to $750.
• Reimbursement percentage. This is the amount your insurer will reimburse you after you have met your deductible. Common reimbursement levels are 70%, 80% and 90%. Some insurers offer plans with 100% reimbursement.

When you purchase a pet insurance plan, some insurers, such as Fetch By The Dodo and Furkin, allow you to choose the deductible amount. A high deductible is one way you can potentially save on your pet insurance costs, but it may not be the best choice for you. Here are the pros and cons.

Pros:

• Lower monthly premium.

Cons:

• Higher out-of-pocket expenses before reimbursement kicks in.

Let’s look at this using a sample quote a five-year-old Labrador retriever in Toronto enrolled with Spot Pet Insurance at 80% reimbursement (meaning your co-insurance, or the amount you pay is 20%).

Using a $300 deductible, a policyholder pays $1,122.48 per year in premiums; with a $950 deductible you’ll pay $820.44 per year. If you don’t make any claims, you’ll save over $300 with the higher deductible.

However, say you have a vet bill for $3,000. With the $300 deductible, you’ll pay $900 to the vet and receive a reimbursement for $2,100. ($3,000 – $600 co-insurance – $300 deductible = $2,100) The total amount spent on pet insurance and at the vet is $2,022.48. ($1,122.48 insurance + $900 vet bill = $2,022.48.)

With the $950 deductible, you’ll pay $1,550 to the vet and receive a reimbursement for $1,450. ($3,000 – $600 co-insurance – $950 deductible = $1,450) The total amount spent on pet insurance and at the vet is $2,370.44. ($820.44 pet insurance + $1,550 vet bill = $2,370.44)

Now say you have a vet bill for $700. With the $300 deductible, you’ll pay $440 to the vet and receive a reimbursement for $260. ($700 – $140 co-insurance – $300 deductible = $260) The total amount spent on pet insurance and at the vet is $1,562.48. ($1,122.48 insurance + $440 vet bill = $1,562.48.)

With the $950 deductible, you’ll pay $700 to the vet and receive no money for reimbursement as you have not yet satisfied your deductible. The total amount spent on pet insurance and at the vet is $1,520.44. ($820.44 pet insurance + $700 vet bill = $1,520.44) However, you’d still have to fulfill $250 in deductible should you make another claim.