What Is a Pet Insurance Deductible?

So, you’ve taken the plunge and decided that you want to cover your new dog or cat with pet insurance. But, after you start researching and comparing plans, you find that you need to make some decisions as to what type and level of “deductible” you want, and wonder how to know what a good deductible for pet insurance means for your pet.

You may be familiar with deductibles in human health insurance plans—the same terminology is used for pet insurance plans.

Here’s how pet insurance deductibles work, plus tips for picking the right kind insurance and level for your pet.

What Is a Deductible in Pet Insurance?

In its most basic form, a deductible is the amount you’ll have to pay to your veterinarian before your insurance policy kicks in and starts making payments for claims. Typical deductibles range from $0 to $1000, but averages are typically closer to $100, $250, or $500.

For example, if your plan has a $200 deductible, you will have to pay the first $200 out of pocket before the insurance company will start reimbursing you for vet bills.

Deductibles are typically applied annually. This means if your pet needs care on January 1 that totals $200 or more (if you have a $200 deductible), the insurance company will pick up any covered costs (less your reimbursement percentages) for the remainder of the year.

However, whether your deductible is applied annually or not depends on the type of deductible you choose.

Pet Insurance Deductible vs. Reimbursement Percentage

It’s important to understand the difference between the deductible and the reimbursement percentage. Both refer to money that you pay out of pocket. First, you pay your set deductible amount. Then the reimbursement percentage kicks in after the deductible has already been met.

For example, if you have a 90% reimbursement percentage, that means the company will pay 90% of the vet bill after the deductible is met, and you will pay 10%.

So, let’s say you have a policy, assuming all billed items are eligible for coverage by your pet insurance plan. With a $200 deductible and a 90% reimbursement rate, and you got a vet bill for $1,000. You would owe $200 for the deductible, so that brings the bill to $800. You will owe 10% of this, which is $80, and the company will reimburse you for $720.

Types of Pet Insurance Deductibles

There are three basic types of pet insurance deductibles:

Annual Deductibles

This is the most common type of pet insurance deductible. These reset every year and apply to any covered condition in the policy. If the annual deductible is $200, you will be responsible for the first $200 in vet bills, and the insurance policy will kick in after that.

Let’s say your dog gets into the trash after a New Year’s party and spends a few days in the hospital, and you have a $200 deductible. Under this plan, you will likely have spent your deductible within the first hour or so at the emergency clinic, and the plan will pick up any covered costs (less your reimbursement percentages) for the remainder of the hospital stay and for the year. 

For most pet parents, the annual deductibles are the most straightforward options. This way, the first time you make a claim in a policy year, you know you will have the deductible to pay first, and then you don’t have to worry about it again.

An annual deductible is probably the best choice if you have a young, healthy pet or if you’re looking for “catastrophic coverage” in the event of unexpected serious illness or injury.

Annual Per-Condition/Incident Deductibles

This type of deductible is applied per incident and resets each year. You will need to pay the deductible each time your pet has a different type of issue.

For example, in one year, you might have to pay a $200 deductible the first time your dog develops an ear infection, another $200 deductible the first time they get into the trash and get an upset stomach, and another $200 deductible if they tangle with a porcupine.

If you have a high deductible, it is possible the insurance will not even kick in until your pet is being treated for their third or fourth ear infection within one policy year.

Lifetime Per-Condition Deductibles

This type of deductible is designed to cover chronic, lifelong conditions and will apply year after year, if the insurance policy remains in force.

Lifetime deductibles are a good option if you are concerned that your pet may develop a chronic, lifelong condition like diabetes, hypo- or hyperthyroidism, or kidney disease. Senior dogs or cats and breeds more likely to develop chronic conditions may benefit from this type of plan.

At the time of diagnosis, you will have to pay the full deductible plus your percentage of the reimbursement plan, but after that, you won’t have to worry about the deductible again for that condition, no matter how many years your pet needs treatment for.

Finally, some plans will lower the deductible each year you go without filing a claim, essentially rewarding you for not using the policy.

Is Every Claim Applied to My Pet Insurance Deductible?

This is one of the most important parts of choosing an insurance plan for your pet. When you’re shopping for pet insurance, you need to understand what that plan covers and what it doesn’t, and then understand which things will actually be applied to the deductible and which won’t. Many plans will not count the following costs toward the deductible:

• Vaccines
• Wellness visits
• Routine care
• Pre-existing conditions
• Congenital conditions
• Elective procedures
• Alternative treatments like acupuncture
• Some sick visits (if you have emergency-only coverage)

Deductibles are one of the most critical factors in determining the cost of the premiums for your pet’s insurance, second only to the type of plan you choose (e.g., comprehensive, accident-only, accident/illness, wellness plan, and so on). 

Read through the fine print for the pet insurance policy you are considering. Be sure you understand how much the deductible is and how it is counted (annually, per-incident annually, per-incident for a lifetime).