Shopping for the best pet insurance means making important decisions about your deductible—a key factor that affects your monthly costs and what you'll pay at the vet. When getting quotes, insurance providers will present you with several deductible options.
But what exactly is a pet insurance deductible, and how do you know which amount makes the most sense for your budget? Let's dive into everything you need to understand about deductibles to help you make an informed choice about your pet's coverage.
Key Insights
- A pet insurance deductible is the amount you pay toward claims before your insurer covers any costs.
- Pet insurers typically offer multiple deductible options that range from $100 to $1,000.
- The best deductible amount for your situation depends on your budget, risk tolerance, and pet’s risk level.
- Along with deductibles, you’ll need to select your reimbursement rate and annual limit.
What Is a Pet Insurance Deductible?
A pet insurance deductible is an amount that pet insurance companies require you to pay toward covered veterinary services before they pay out any settlements.
For example, if you have a pet insurance policy with a $500 annual deductible and your pet needs a $2,500 surgery, you’ll be responsible for the first $500. Once paid, your insurer will cover the remaining eligible costs up to your reimbursement rate and annual limit.
How Do Pet Insurance Deductibles Work?
Pet insurance deductibles can vary depending on the insurer you choose. However, most pet insurance companies offer several deductible options during the application process. You can click on the different deductibles to see how they’ll impact your monthly premium cost and choose the one that best suits your situation.
When it’s time to file a claim, most pet insurers operate on a reimbursement basis, which works as follows:
- You seek covered veterinary care for your pet and pay your vet.
- You file a claim with your pet insurance company and send the bill.
- The insurer approves or denies the claim.
- Upon approval, the insurer deducts your deductible and copay from the settlement amount.
- You receive the remaining amount up to your annual limit.
For example, you have a $10,000 pet insurance policy with a $200 deductible and a 10% copay. One day, your dog gets seriously injured and requires a $1,000 trip to the emergency vet. You pay the vet $1,000 and file a claim with your insurance provider.
Upon approval, the insurer uses the “deductible then copay” reimbursement method. As a result, the $200 deductible and an $80 copay are deducted from the $1,000, leaving you with a $720 reimbursement.
Note: Insurers may instead subtract the copay first and then the deductible, which results in a higher copay.
While not as common, some pet insurance companies vets directly. When that’s the case, you’re responsible for paying your deductible and copay directly to your vet, and your insurance covers the rest.
Types of Pet Insurance Deductibles
Pet insurance deductibles come in two main types: annual and per-incident.
According to Josh Wiesenfeld, CEO and founder of California-based pet care brand Boxiecat, pet insurance deductibles typically work on a yearly basis. This means you only need to meet your deductible once per policy year, regardless of how many claims you submit during that time.
However, some insurers have per-condition deductibles that apply each time you file a claim for a new illness or injury, which can add up. Be sure to check which type of deductible an insurer offers, as it can significantly impact your pet insurance policy costs.
Pet Insurance Deductibles by Company
Pet insurance companies vary in the deductible types and amounts they offer. To give you a better idea, here are the deductible ranges and types from many of the leading US pet insurance companies.
| Pet Insurance Provider | Deductible Options | Deductible Type |
|---|---|---|
| ASPCA Pet Health Insurance | $100, $250, or $500 | Annual |
| CarePlus by Chewy | $250, $500, or $1,000 | Annual |
| Embrace | $100, $250, $500, $750, or $1,000 | Annual |
| Fetch Pet Insurance | $250 to $2,500 | Annual |
| Figo Pet Insurance | $100, $250, $500, $750, $1,000, or $1,500 | Annual |
| Healthy Paws | $250, $500, or $1,000 | Annual |
| Lemonade Pet Insurance | $100, $250, $500, or $750 | Annual |
| MetLife Pet Insurance | $0 – $750 in $50 increments and $1,000, $1,250, $1,500, $2,000 and $2,500 | Annual |
| Pets Best | $50, $100, $200, $250, $500, and $1,000 | Annual |
According to Wiesenfeld, pet insurance deductibles typically range from $100 to $1,000, varying by plan and provider. He explains that while some pet owners opt for lower deductibles to reduce their costs when filing claims, others choose higher deductibles to decrease their monthly premium payments.
How to Choose a Pet Insurance Deductible
Understanding how different deductible amounts affect your overall costs is crucial when selecting pet insurance. Let's break down an example using a four-year-old, medium-sized, mixed-breed dog, with a $10,000 policy and 80% reimbursement rate:
Deductible amount: The amount you’ll owe when you file a claim.
Monthly premium: The cost of your monthly premiums per month.
Annual premium cost: The cost of your monthly premiums per year.
Total combined cost: The total cost of premiums for the year, plus your deductible.
| Plan Options | Annual Deductible Amount | Monthly Premium | Annual Cost of Premiums | Total Combined Cost |
|---|---|---|---|---|
| Option 1 | $100 | $76.17 | $914.04 | $1,014.04 |
| Option 2 | $250 | $62.01 | $744.12 | $994.12 |
| Option 3 | $500 | $47.29 | $567.48 | $1,067.48 |
| Option 4 | $750 | $37.87 | $454.44 | $1,204.44 |
Each option offers pros and cons and can be suitable for different situations, for example:
- Option 1 ($100 deductible): Best for pet owners who prefer higher monthly payments in exchange for minimal out-of-pocket costs when filing a claim. While you'll pay more in premiums, you'll only need to cover $100 before insurance kicks in.
- Option 2 ($250 deductible): Offers the lowest total combined cost if you file a claim, balancing monthly premiums with out-of-pocket expenses. This option can be ideal for those expecting to use their insurance within the year.
- Option 3 ($500 deductible): Provides a middle-ground approach with moderate monthly premiums and a manageable deductible, suitable for those who want balanced risk protection.
- Option 4 ($750 deductible): Best for budget-conscious pet owners who want protection against major incidents but can handle higher out-of-pocket costs. While monthly premiums are lowest, you'll need to pay more before insurance coverage begins.
Wiesenfeld advises pet owners to weigh several factors when choosing a deductible amount, including their budget, how likely their pet is to need medical care, and their ability to handle surprise vet bills. He notes that while lower deductibles mean higher monthly premiums, they reduce out-of-pocket costs during treatment.
On the flip side, opting for a higher deductible can help lower your monthly premium costs, but requires being prepared to pay more upfront if your pet has a health emergency.
Deductibles vs. Copays and Reimbursement Rates
Along with paying a deductible when you file a pet insurance claim, insurers typically require you to pay a copay of 10% to 30%. Your copay amount will depend on the reimbursement rate you select when signing up for coverage.
For example, if you choose an 80% reimbursement rate, your insurer will pay for 80% of your covered costs and you’ll have a 20% copay. Higher reimbursement rates offer more coverage but lead to higher monthly premium costs.
Deductibles vs. Annual Limits
Pet insurance comes with another key customizable element: the policy’s annual limit. The annual limit is the maximum amount your insurer will pay each year in settlements. For example, if your policy’s limit is $10,000, you would be responsible for all expenses that exceed $10,000 in a policy year.
Similar to the deductible and reimbursement rate, the annual limit impacts your premium amount. Requesting higher levels of coverage will lead to higher premiums.
