How do pet insurance deductibles work?

If you’re looking for more information on how pet insurance deductibles work, you’ve come to the right place! Pet medical insurance isn’t exactly the same as human health insurance, so the deductible on your pet insurance policy may not work like your own. And different pet insurance providers may have differences in how the deductible is applied, so knowing what questions to ask your pet insurance provider might help you avoid a surprise when it’s time to submit a claim.

What is a pet insurance deductible?

Put simply, a pet insurance deductible is the portion of the vet bill that you agree to pay before your pet insurance policy starts covering eligible expenses.

If this concept sounds familiar, it’s because this is how car insurance and human health insurance deductibles typically function. However, pet insurance can be a bit different. This is because although many providers apply your deductible every year, others (like Trupanion) may only apply your deductible once per condition. Additionally, you can generally choose your pet insurance deductible, which may not always be the case for other forms of insurance.

How pet insurance deductibles work

Sometimes it can help to paint a picture with an example. In this scenario, your dog fell and injured their leg, so you take them to the emergency vet. An exam and an X-ray reveal that your dog has broken their leg and will need to be immobilized with a splint.

In this example, let’s say your total bill for the appointment, diagnosis and treatment amounts to $1,500, and you have a pet health insurance policy with a $250 deductible and a 90% payout percentage.

When you submit your first claim:

1. First, your insurance provider will identify which items are eligible for coverage on your veterinary invoice and deduct ineligible items from your total reimbursement. In this case, your insurance provider does not cover veterinary exam fees, which amounted to $100.
   
   $1,500 (total bill) - $100 (ineligible items) = $1,400 of eligible costs on your invoice
   
2. Next, your pet insurance provider will apply your payout percentage:
   
   $1,400 (eligible costs) x 90% (payout percentage) = $1,260
   
3. Finally, your provider will deduct your deductible, and pay out what remains:
   
   $1,260 - $250 (deductible) = $1,010 (total amount that will be paid by your insurance provider)

In this scenario, your insurance provider will pay $1,010 of the vet bill for your dog’s broken leg, and you will be responsible for paying $490 ($100 exam fee + $140 coinsurance + $250 deductible).

Keep in mind that the exact amount your pet insurance policy pays out can vary depending on the provider you choose and the coverage options you select. Each pet insurance provider has different policy exclusions and offers different deductible choices. Also, some providers offer different payout percentages or even impose annual limits on the amount of the bill they will cover. This is why it can be beneficial to research your pet insurance provider carefully before you sign up for an insurance policy.

How often will you have to pay your pet insurance deductible?

What happens the next time you need to submit a claim? Will you have to pay another deductible? It depends — pet insurance deductibles are applied in various ways by providers.

1. Annual deductibles

Many pet insurance providers have deductibles that reset annually, which is similar to how human health insurance works. This means that once you meet your deductible, you will not need to pay towards your deductible for the remainder of the year.

Some providers will apply your deductible once per calendar year, which would mean that your deductible is applied once between January 1 and December 31, and will reset the following January 1. Other times, a year is defined by your enrollment date. For example, if you enrolled on May 22, your deductible would be reset when your policy renews the following year on May 22.

When you have a policy that features an annual deductible, if the cost of treating the same condition happens to cross over the calendar year or your policy renewal date, you will have to pay your deductible all over again.

2. Lifetime, per-condition deductibles

Alternatively, other pet medical insurance providers like Trupanion have deductibles that are only applied once per condition. For example, if your pet is diagnosed with allergies, you would only need to meet your deductible once, and Trupanion would pay 90% of eligible expenses for allergy treatments for the rest of your pet’s life (or until you cancel your policy). If your pet then broke a leg, this would be a new condition, so a new deductible would be applied.

Trupanion chose to offer customers a per-condition deductible instead of the typical annual deductible because the data shows that most pets will experience less conditions over their life than years of life.^{footnote 1} As of 2024, the average Trupanion customer paid 3 deductibles over 12 years of their pet’s life.^{footnote 1}

Should I file a pet insurance claim if it doesn’t meet my deductible?

You might consider filing a claim for any eligible treatment, even if the cost of treatment is less than your deductible. The costs of treatment will be applied to your deductible, which will help in case you have another veterinary bill that, when added to the first, exceeds your deductible.

As an example, if you had a $250 deductible, and your vet bill was only $150, this initial invoice could be applied to your $250 deductible. Then, only $100 of your deductible would remain when you submit your next claim.

Some insurance providers dictate that you must submit your claims within a certain timeframe after the incident has occurred in order for the claim to be eligible — typically these timeframes are between 90 and 180 days. If you hold onto your veterinary invoices until the total amount exceeds your deductible, you may risk your claim being denied if one of the treatments took place too far in the past.

Can I customize my pet insurance deductible?

Many pet insurance providers allow you to choose your deductible when you are customizing your insurance plan. Your deductible choice impacts your monthly premium. A high deductible will generally result in a lower monthly premium because your provider will pay less toward your veterinary invoices when it’s time to submit a claim.

How do I select the best pet insurance deductible for my pet?

Higher deductibles ($500-$1000) can be suitable options for pet owners who are comfortable paying for smaller incidents and mostly want to help protect from having to pay for an accident or illness that ends up costing thousands of dollars. Lower deductibles ($100-$500) can be a practical choice for pet owners who want budget help for their pet’s care and could not comfortably afford veterinary bills over $1,000.

For many, it may be easier to budget a little more on a monthly basis for a pet insurance policy than it is to maintain a high balance in a savings account. If that’s the case for you, you may prefer a policy with a lower deductible.

Can I change my pet insurance deductible?

Many pet insurance providers have a set window for when you can lower your deductible. Typically, you can only lower your deductible at or near the start of your plan, or during your pet insurance plan’s renewal period. Some providers require you to cancel your current policy and re-enroll if you want to lower your deductible, which would result in any expenses previously covered being considered pre-existing and ineligible for coverage. Reach out to your provider’s customer service team for questions about your specific pet insurance plan requirements.

Many pet health insurance providers do not have restrictions on when you can raise your deductible.

Remember, any changes to your pet insurance deductible will result in a change to your annual or monthly premiums.

How to find pet insurance coverage for your pet

Understanding how deductibles work is just one piece of the puzzle when it comes to choosing a quality pet insurance plan for your pet. Your local State Farm agent can help you decide which deductible choice is right for your monthly budget by offering you a personalized quote.