How Pet Insurance Deductibles Work

What is a Pet Insurance Deductible?

A pet insurance deductible is the amount you are responsible for paying before your insurance reimbursement starts covering veterinary expenses. Most pet insurance companies will offer pet parents multiple deductible options to choose from and the deductible is one factor used to calculate premium costs:

• Choosing a higher deductible means you’ll have a lower premium because you are choosing to cover a larger portion of your expenses out of pocket each year
• Choosing a lower deductible means you’ll have a higher premium because the insurance company will be covering a larger portion of your expenses each year

Furkin Pet Insurance offers three deductible options for dogs and cats based on the age of your pet.

Types of Pet Insurance Deductibles

Annual Deductible

An annual deductible means you have a single deductible each policy year. Once your eligible claims have exceeded your deductible, the insurance policy will begin reimbursing you for claims for the remainder of your policy year with no further impact from your deductible. With annual deductibles, your deductible will reset each year upon renewal.

Furkin Pet Insurance uses annual deductibles because they are easier to understand and more predictable, allowing pet parents to better budget for their pet’s health care.

How Annual Pet Insurance Deductibles Work

Let’s say you enroll in a pet insurance policy with a $100 annual deductible and your pet has the following veterinary expenses:

1. Month 3 - Your pet has diabetes resulting in a $750 veterinary bill. You are responsible for paying the first $100 (your deductible). The remaining $650 is then covered by the insurance company based on your policy’s reimbursement percentage.
2. Month 5 - Your pet has itchy paws and gets diagnosed with allergies resulting in a $400 veterinary bill. Because you have already covered your annual deductible, the full $400 is eligible for coverage.
3. Months 6 through 12 (rest of policy year) - Your deductible was already covered from the diabetes claim earlier in the year, so just like the itchy paws in month 5, any other claims for your pet throughout the remainder of your annual policy year are fully covered with no impact from your deductible.

When your policy renews, one year after your enrollment date, your annual deductible is then reset.

Note: Your deductible is not paid to the insurance company. The only amount paid to the insurance company is your monthly premium. The deductible is simply the amount of expenses you need to pay for out of pocket before your insurance coverage kicks in. If you have no claims in a given policy year, the deductible is irrelevant and has no impact.

Per-Condition (or Per-Incident) Deductible

A per-condition deductible means you'll have a deductible applied each time your pet has a new (different) condition.

How Per-Condition Deductibles Work

Let’s say you enroll in a pet insurance policy with a $100 per-condition deductible and your pet has the following veterinary expenses:

1. Month 3 - Your pet has diabetes resulting in a $750 veterinary bill. You are responsible for paying the first $100 (your deductible). The remaining $650 is then covered by the insurance company based on your policy’s reimbursement percentage.
2. Month 5 - Your pet has itchy paws and gets diagnosed with allergies resulting in a $400 veterinary bill. Because this is a new condition unrelated to diabetes, you again have to cover the first $100. The remaining $300 is covered by the insurance company based on your policy’s reimbursement percentage.
3. For any future claims related to diabetes or allergies, you would have no deductible applied because you already covered it previously. However, for any future claims related to other new conditions (broken limbs, cancer, etc.), your $100 deductible would have to be covered on each different condition just as it was on the diabetes and allergy examples above.

Deductibles vs. Reimbursement Percentage

It’s important to understand the difference between deductibles and reimbursement percentages. Both are related to costs that the policyholder is responsible for paying out of pocket, however, it’s helpful to understand how they interact when calculating the amount an insurance company reimburses for each of your veterinary expenses.

With Furkin Pet Insurance, your reimbursement percentage is applied first, then any remaining annual deductible. For example, let’s say you have a $100 annual deductible and an 80% reimbursement rate:

1. First Claim: You submit your first claim of the policy year for $1000, your reimbursement percentage is 80% which comes out to $800, then your annual deductible is applied so you would be reimbursed $700.
2. Second Claim: Your second claim of the policy year is $2000, your reimbursement percentage is 80% which comes out to $1600. Because you have an annual deductible that was already covered on your first claim, you would be reimbursed the full $1600.

Do All Claims Apply to a Pet Insurance Deductible?

A pet insurance deductible is only applied towards eligible claims. For example, your standard accident and illness pet insurance policy will not cover services related to preventive care or pre-existing conditions, such as:

• Annual wellness checkups
• Vaccinations
• Preventive medication for flea & tick or heartworm
• Expenses related to pre-existing conditions
• Any claims occurring during your policy waiting periods

For these ineligible items, the deductible does not apply since the policyholder has full responsibility for these expenses.

Some pet insurance companies may include additional benefits in your coverage that will be fully reimbursed with no deductible applied. For example, Furkin Pet Insurance comes with over $4000 of added pet owner assistance benefits included:

• Boarding fees up to $1000
• Holiday/trip cancellation cost up to $1000
• Advertising & reward up to $1000 for a lost or stolen pet
• Cremation and/or burial costs up to $1000 if you Veterinarian recommends your pet be medically euthanized
• 24/7 Telehealth and more

For these added benefits, your deductible and reimburse percentage do not apply, so you will receive full reimbursement for these eligible situations. See the Furkin Sample Policy for full details.

What is a Typical Deductible for Pet Insurance?

Most pet insurance companies will offer multiple deductible options to choose from, typically ranging from $100 and up to $1000. At Furkin, we see the average deductible chosen by our members to be around $300 to $400.

Choosing the Right Deductible

As mentioned earlier, your choice of deductible has an impact on how much your monthly premium will cost. If it’s helpful for your budget to have a lesser out of pocket responsibility throughout your pet’s life, you may choose to pay a slightly higher monthly premium for a lower deductible. However, if you’re looking to lower your monthly premium cost, choosing a higher deductible is a good option.

Choosing the right deductible is a decision that differs among pet parents based on their preferences, personal financial situation, and comfort level with risk. You should choose a deductible amount that you would be comfortable and prepared to pay out of pocket if and when your pet experiences future accidents and illnesses.

With Furkin, you can increase your deductible at any time and have the option to decrease your deductible each year when renewing your policy.

Are There Pet Insurance Policies With No Deductible?

It’s uncommon but there are some companies that offer pet insurance policies with no deductible. Keep in mind you’ll be paying a much higher premium.