What is a pet insurance deductible and how does it work?

The deductible is the portion of the cost you are responsible for before reimbursement starts. Here, Embrace explains the two popular types of deductibles that major pet insurance plans use and how they work.

How to Pick the Best Deductible Option

When researching pet insurance deductibles, keep your budget in mind. Just like car and human health insurance, you pay the monthly or yearly premium, but there is also the deductible and copay that you are responsible for. The lower the deductible you choose, the higher the premium you’ll pay. Alternatively, the higher the deductible you pick, the lower the premium will be. There are two main deductible types:

  • Annual deductible

  • Per-incident deductible

Annual Deductible

Pet insurance plans with annual deductibles require that you meet your deductible only once per policy term. This means that once the deductible has been satisfied for the policy term, the claim reimbursement only subtracts the copay until the policy renewal when the annual deductible resets. Annual deductibles are more predictable. We can’t predict when our pets will get hurt or sick, so only having one deductible to meet each year allows you to budget for those “uh oh” moments.

How an Annual Pet Insurance Deductible Works

An annual deductible is the simplest type since you pay it just once per policy year for each pet. With an annual deductible it does not matter how many times your pet goes to the veterinarian each policy year, you still only have to meet the deductible once. The table below shows sample claims for a dog with a $200 annual deductible who visits the veterinary hospital three times during one policy year. Some companies, including Embrace, allow you to choose your annual deductible when personalizing your pet insurance policy.

Claim 1 Claim 2 Claim 3
Reason for Visit: Vomiting Laceration Diarrhea
Veterinary Bill: $214.55 $275.09 $650.88
Annual Deductible: -$200 $0 $0
20% Copay: -$2.91 -$55.02 -$130.18
Reimbursement: $11.64 $220.07 $520.70

Total Reimbursement: $752.41

Per-incident (or Per-condition) Deductible

A per-incident deductible is applied each time your pet goes to the veterinarian for a new condition. Plans with a per-incident pet insurance deductible could end up reimbursing you less when you claim, especially if your pet is seen for a variety of medical issues.

How a Per-incident Pet Insurance Deductible Works

If your pet has an unlucky year and is seen for a few different reasons, a per-incident deductible gets expensive quickly. For example, an episode of vomiting would count as an incident and a laceration would count as a separate incident. Your deductible resets for each incident. Using the same example as above with a $100 per-incident deductible, you can see that the deductible is paid three times because the incidents are not related. Depending on how many times and for what reasons your pet visits the veterinarian, you could pay multiple per-incident deductibles each policy year.

Claim 1 Claim 2 Claim 3
Reason for Visit: Vomiting Laceration Diarrhea
Veterinary Bill: $214.55 $275.09 $650.88
Per-incident Deductible: -$100 -$100 -$100
20% Copay: -$22.91 -$35.02 -$110.18
Reimbursement: $91.64 $140.07 $440.70

Total Reimbursement: $672.41

Embrace Pet Insurance's Deductible Type

The Embrace policy uses the annual deductible type. We believe annual deductibles are easier to understand and are fairer to you as a pet parent. Embrace also offers the industry’s best diminishing deductible feature called the Healthy Pet Deductible. For each year your pet goes without receiving a claim reimbursement, your annual deductible is automatically reduced by $50 the following year. You could even get your deductible to $0 for consecutive claim reimbursement-free years.

What claims apply to a pet insurance deductible?

Most pet insurance companies only allow charges related to covered accidents and illnesses to be applied towards your deductible. Every company handles coverage a little differently, so we recommend reviewing the terms and conditions of the plans you’re researching carefully. Charges that are not covered will not be applied towards your deductible. For example, charges for routine care and anything related to a pre-existing condition would not be applied to the deductible.

Does each pet have a separate deductible?

Yes, each pet on your pet insurance policy has their own deductible that must be met before reimbursement begins.

Is it possible to have a pet insurance policy with no deductible?

While some pet insurance companies do offer a policy with no deductible, you'll pay a considerably higher premium.