How pet insurance deductibles work

December 6, 2022 - 4 min read

Deductibles, premiums, co-pays...these are words you'll see a lot when selecting pet insurance. But what do they actually mean?

Today, we'll tackle pet insurance deductibles —what the term means, how deductibles impact your overall pet insurance costs, and how to select the right coverage option for you and your BFF (Best Friend Furever, obviously).

(Pssst...if you're looking for a general overview of pet insurance, start with our post on how pet insurance works!)

What Is a Pet Insurance Deductible?

Your deductibleis the amount of money you'll pay out of pocket before your insurance policy starts to reimburse you.

Types of Pet Insurance Deductibles

There are two main types of insurance deductible: Annual and Per-Incident/Per-Condition. ManyPets uses an annual deductible.

Annual Deductibles

Annual deductibles require you to spend a certain amount overall for your pet's qualified conditions before insurance kicks in.

Every qualified claim that you submit with an invoice counts towards your overall Annual Deductible, so long as the condition is covered.

In other words, if your adorable pup Smoky eats a whole chocolate cake and gets hit by a car a few hours later, you might meet your annual deductible in a single day. (By the way, we’d recommend keeping Smoky on a tight leash in the future.) Your insurance company will then calculate your co-pay and subtract your deductible before sending you a reimbursement for the amount you paid your vet.

Just think of it like car insurance: The driver who grazed Smoky will need to hit a certain dollar amount to cover their deductible before their insurance company will start pitching in to cover the car’s damage. Same principle with pet insurance!

Per-Incident/Per-Condition Deductibles

ManyPets only uses Annual Deductibles. This helps because Per-Incident Deductibles can become very costly very quickly.

Per-Incident deductibles require you to spend a certain amount per qualified condition before insurance kicks in. Every invoice you submit for covered conditions counts ONLY towards the deductible for that specific condition.

That means if Smoky discovers that freshly baked chocolate cake, you'll always have to pay his vet bills up to an agreed-upon amount (deductible) before insurance starts to help out — even if you've already paid other costly claims within the same policy period.

And when you return to the vet later that day after Smoky gets hit, that'll be billed as yet another a separate incident; you'll need to pay up to your deductible all over again before insurance shares the cost.

You'll never encounter these problems with a ManyPets policy: Once you've satisfied our Annual Deductible, it'll remain satisfied for the rest of your policy term.

How Does an Annual Pet Insurance Deductible Work?

First, let's clarify what we mean by "Annual." Your policy term lasts for 12 months beginning on the day of your policy purchase. So if you purchase a policy on June 1st, the term runs through the following June 1st, AKA the "anniversary date." The calendar year isn't a factor.

So how might Smoky's situation play out for your finances if you hold a policy with a $500 annual deductible and 80% reimbursement level (meaning you’re responsible for a 20% co-pay)?

Let’s say this is the first claim in your policy term:

Smoky's rather unfortunate day results in $2,000 in veterinary bills. You pay your vet up front.
Next, you submit the claim and Smoky’s medical history from the past 18 months to our team.
We review and approve your claim, then calculate your reimbursement:
- We calculate 80% of your approved claim: $2000 x 80% = $1600
- We deduct $500 from your payment: $1600-$500 = $1100
You receive a reimbursement of $1100.

But what if this isn'tthe first claim of your policy term, and a portion of your deductible remains after a previous vet visit? We'll always calculate your co-pay before subtracting the remaining deductible.

So let's say $37 remains on your deductible:

Smoky’s vet bill is $2,000
We calculate 80% of your approved claim: $1600.
We deduct $37 from the remaining $1600: $1600 - $37 = $1563

You receive a reimbursement of $1563.

Once you’ve met your deductible, it will remain satisfied for the rest of your annual policy term.

Here's hoping Smoky doesn't get into any other trouble during the rest of your policy term. But if he does, and you’ve already paid your deductible, we’ll pay you the full reimbursement percentage for approved claims!

What's a Good Pet Insurance Deductible?

When deciding between a higher or lower deductible, it's helpful to think about how much you’ll pay, and when you'll pay it. That said, which of the following statements sounds better to you?

I'd be willing to pay more on my monthly bill (premium), so I can pay less toward my deductible when my pet develops a condition.

I'd rather pay less on my monthly bill (premium), even if it means I pay more towards my deductible when my pet develops a condition.

No one can tell you what the best deductible option is for you — it boils down to your finances and preferences. Additionally, every pet insurance company will limit your options based on where you live and your pet's age, which brings us to our next point.