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Maximizing Pet Insurance: Understanding Deductibles

Like human health insurance, most pet insurance policies have a deductible you must pay before your coverage kicks in. The specifics vary from one policy and provider to the next, but most offer a few options to accommodate different budgets. Understanding the specifics of your policy’s deductible can help you prepare for your first claim and what to expect.

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What is a deductible in pet insurance?

A pet insurance deductible is the amount you pay before your pet insurance policy kicks in. Most deductibles in pet insurance range from $0 to $1,000, often climbing in $250 increments, although options vary based on the provider.

It’s important to note that your deductible is among the factors influencing pet insurance costs (other factors include the species, breed, and age of your pet, your location, and your type of policy). Generally, the higher the deductible you choose, the lower your monthly or annual premium. The opposite is also true — the lower your deductible, the higher your monthly or yearly premium.

How do pet insurance deductibles work?

Your pet insurance deductible is no different than your car, house, or health insurance deductible. Much like other deductibles, your pet insurance deductible requires you to pay a certain amount before your policy covers the rest of the eligible expenses.

For example, suppose your dog appears in pain and shows signs of gastrointestinal distress. The veterinarian discovers that it consumed a chew toy that has lodged itself in the intestines, preventing the dog from passing food normally.

When it comes time to file a claim, you know you have a $500 annual deductible, a 90% reimbursement rate, and a $2,000 emergency surgery bill. Since it’s your first claim of the year, you pay for the first $500 of your bill. Your insurer covers 90% of the remaining bill, $1,350, based on your reimbursement rate, leaving you to cover the final $150.

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Types of pet insurance deductibles

Most pet insurance policies have one of two types of deductibles: annual and per-incident.

The first type, called an annual deductible, is the most common of the two. With annual deductibles, you only have to pay it once each policy year, or every year your policy renews.

For example, suppose your pet needs emergency surgery for a swallowed toy lodged in their intestinal tract in March, and in October, you file a second claim for an ear infection. Since you paid your annual deductible in March for your first emergency surgery claim, you won’t need to worry about paying another deductible before reimbursement with your October ear infection claim.

Although per-incident deductibles are less common, some providers still use them. If your policy has this type of deductible, you’ll be responsible for paying it every time you make a pet insurance claim for a new health issue. Once you meet the deductible for that incident, your provider will cover the rest based on your reimbursement rate.

Using the previous example with an emergency foreign body surgery in March and an ear infection in October, you would need to pay your per-incident deductible when filing each claim.

Choosing the best deductible on your pet insurance policy

Once you find the perfect pet insurance policy for your furry, feathered, or scaled friend, you'll likely have deductible options. The amount you choose can affect the specifics of your policy, so it’s essential to choose carefully.

The most common deductible levels are $100, $250, $500, $750, and $1,000. Some providers offer more options, such as in $5 or $100 increments, but the options vary by provider. Pet insurance with no deductible ($0), while occasionally available, is rare, with most pet parents choosing a $250 deductible.

Here are a few factors to consider in your decision:

Your budget

First and foremost, consider the monthly or annual budget you’re dedicating to your pet insurance premium and your overall budget in case of an emergency. If you can afford a higher deductible for pet insurance, selecting it can help lower your monthly or annual premium.

For example, let’s compare two identical policies for the same cat. Policy one features a $100 deductible, giving the pet owner peace of mind, knowing they won’t face financial worries if the cat suffers a major injury or has a significant health crisis. In exchange for that assurance, they decide they’re okay with a higher monthly premium, set at $60.

Conversely, policy two has a $750 deductible, meaning the cat owner must pay $750 of any covered expense before the insurance policy kicks in. The higher deductible has a lower monthly premium of $28, making it more feasible for those on a restricted budget.

Both options have merits. Remember, if you choose a lower deductible, you won’t have to pay much before your policy kicks in. Conversely, if you choose a higher deductible, you’ll need to pay more before your policy kicks in, but this can save you money on monthly payments. If the charges are less than your deductible, you'll be responsible for the entire bill.

Your pet’s health risks

Pet health coverage can be a lifesaver for your pocketbook, especially if you have a pet prone to health issues. As you shop for the perfect policy and weigh your deductible options, keep this factor in mind.

If your pet is more prone to health issues, whether it’s due to clumsiness or a health condition they develop, you may want to choose a lower deductible (especially if your policy has per-incident deductibles). This way, you won’t have to foot a large bill whenever your pet has a health emergency or issue.

Pros and cons of different deductible levels

Each deductible option has merits, and given that every pet and budget is unique, the ideal solution for your needs may vary.

Deductible levelProsCons
High
  • Lower monthly premiums
  • Ideal for young and healthy pets
  • Great for pet owners with an emergency vet fund
  • Higher out-of-pocket costs; financial burden during emergencies
Low
  • Affordable out-of-pocket costs
  • Ideal for pets with chronic conditions or other health issues
  • Peace of mind knowing the cost barrier before coverage is minimal
  • Higher monthly premiums
  • Limited savings for healthy pets

Tips for choosing pet insurance deductibles

Finding the perfect pet insurance deductible doesn’t need to be difficult. Here are a few tips to help you choose the ideal fit:

  • Consider your budget, ensuring you choose a deductible you can afford at any given time.
  • Consider your pet's needs, weighing their health risks to determine whether you want a higher monthly premium or a higher deductible.
  • Strike a balance between solid coverage and out-of-pocket costs based on your budget and policy choice. This can look different for everyone based on varying budgets and unique pet needs.
  • Take advantage of the quoting tools pet insurers offer. These will give you a better idea of what to expect based on different selections. Choose varying deductible amounts to find the best option for your monthly and emergency budgets.

Ultimately, the best deductible for your pet insurance policy comes down to you and your pet, from your budget to your pet’s health risks. By understanding the basics of pet insurance deductibles and how they affect your policy, you can choose an option that suits your budget and your pet’s needs.

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