What Is A Deductible In Pet Insurance?

It can all get confusing when you submit a claim to your insurance provider and get a weird bill in return, listing percentages and covered accidents. So what is a pet insurance deductible, and how can understanding it save you money?

The deductible has a direct correlation to 1) how much you have to spend out of pocket and 2) how much your premiums will be. Finding the sweet spot can save you hundreds of dollars.

Deductibles only apply to covered accidents and illnesses, so you need to be aware of what your policy covers and whether you have riders like wellness coverage for regular veterinary care.

How Do Pet Insurance Deductibles Work?

Let’s look at how a deductible works from start to finish, using an example of an annual deductible:

1. You get to choose your deductible amount within a given range. Very few companies offer a $0 or $1,000+ deductible, so most people pick $250 or $500.
2. Once you choose the deductible you want, it will directly influence your premiums. The higher your deductible, the lower your premiums will be, and vice versa.
3. Every time you submit a claim for reimbursement, your insurance company will review any copays or reimbursement percentages associated with your policy and any remaining deductible. If you have any remaining deductible, it gets applied toward part or all of your bill, depending on the bill.

Types of Pet Insurance Deductibles

There are two main types of pet insurance deductibles: an annual deductible and a per-incident deductible. Most companies offer annual deductibles, including Embrace, Figo, Health Paws, Nationwide, Pets Best, and PetPlan.

• Annual Deductibles: A set dollar amount you pay over the course of a year toward your claims.
• Per incident Deductibles: A set amount you pay per incident.
• Diminishing: This is only available with Embrace, and your deductible diminishes over time by a rate of $50 per year you go without filing a claim.

Annual Deductibles

Annual deductibles refer to the amount you have to pay out of pocket in a given year. This is a flat fee that you choose when you select your pet insurance policy, and when you renew at the end of the year, you can always change it.

The annual deductible is a flat rate, not a percentage, so it applies regardless of how much you spend on a single claim or how many claims you have in a year.

Let’s look at an example. The table below will break down how an annual deductible works based on different claims for a policy that has a $250 deductible and 80% co-insurance.

As you can see in the table above, after two claims in a year, there’s no more deductible that you would have to pay. If the hospital stay was your first incident with your pet, you wouldn’t have a deductible after the first claim.

Per-Condition/Incident Deductibles

Some companies, like Trupanion, offer per-condition/incident deductibles. As the name suggests, this refers to an amount you have to pay every time you file a claim for an incident.

You have to pay that amount before you get reimbursed for the rest of the incident.

This applies to each:

• Condition
• Injury
• Vet visit

With annual deductibles, the amount you have to pay resets at the end of each year, and you have the option of modifying it. With a per-condition deductible, the amount you have to pay resets after each claim. The table below gives a better indication of how that would work:

Deductibles vs. Reimbursement Percentage

A deductible is a set figure that you have to pay within a given year, but the reimbursement percentage refers to what percentage the insurance company reimburses you for each claim.

For example:

Marcus has a pet insurance policy for his family cat with an 80% reimbursement percentage and a $250 deductible. This means for every claim he submits in a given year, the company will reimburse him 80% of the total qualifying bill minus his $250 deductible. Once he has paid the $250 deductible, he gets reimbursed 80% of the total qualifying bill for any claims moving forward.

What is a Typical Deductible Range for Pet Insurance?

Typical deductibles can range between $0 and $1,000, but the average increments are $100, $250, and $500. These deductibles remain constant across all 50 states. However, it is more common to find increments of $100, $250, and $500 from the same company. Very few companies offer $0 or $1,000.

Pet Insurance Deductibles Compared From Top Insurance Companies

Different pet insurance providers handle deductibles differently, with variations in available ranges. The table below shows a quick comparison of deductibles from some of the top pet insurance companies:

The most common deductible is an annual deductible of $250, according to Nationwide Pet Insurance.

How to Pick the Best Deductible for Your Needs?

When it comes to picking the best deductible for your needs, you should select a deductible amount that you are comfortable you could pay in a given year. But you also have to consider your budget, your current financial situation, and the risk level associated with your pet.

According to the Insurance Information Institute, the average cost for basic care of a dog is $848 annually, but each vet visit can increase that by a few hundred dollars minimum without a good deductible.

Budget

Consider your budget. A lower deductible tends to have higher premiums, so you need to find a balance between what you are able to afford each month and what you are able to afford out of pocket when there is an emergency.

Financial Situation

You also need to consider your financial situation and whether you have enough savings to cover unexpected pet emergencies. If you can pick a higher deductible, especially for a younger pet, you’ll be able to enjoy a lower premium with your pet insurance policy for several years.

Risk Level

Consider the risk level of your pet given their:

• Breed
• Age
• Gender
• Health

If you have an older pet, a pure breed, or a pet with a pre-existing condition, they are more likely to experience several accidents or illnesses, in which case a lower deductible might save you more in the long run.

What Claims Apply to a Pet Insurance Deductible?

It’s important to understand that not every incident or accident or even your full veterinary bill will be covered by your insurance. Going to the vet for an eye infection or swallowing an object might include standard veterinarian fees that represent 40% of the bill, which don’t get covered.

Most pet insurance companies only allow charges related to covered accidents and illnesses to be applied toward your deductible.

Should You Choose a Higher or Lower Pet Insurance Deductible?

It’s entirely up to you to choose a higher or lower pet insurance deductible but you have to factor the other aspects of your pet insurance like your premiums, any copays that might be applied, and your reimbursement percentage.

Pet owners will pay an average of $20 per month more with a $200 annual deductible compared to a $500 annual deductible.

Is It Possible to Have a Pet Insurance Policy With No Deductible?

Most companies have a minimum threshold of $100 for a deductible. It is rare, but some pet companies have policies with no deductible. Be advised that if you choose a policy with no deductible, your premiums will be significantly higher to compensate. TrustedPals is one such company with options for $0 deductibles. Trupanion offers $0 deductibles but also offers $0-$1,000 in $5 increments.