Understanding the Terms of Pet Insurance

Table of Contents

Every responsible owner knows how important it is to read the fine print before buying a pet insurance policy. Even long-time pet insurance policyholders can be left scratching their heads at times by the jargon used in policies covering their pets.

This guide to pet insurance terms and what they mean will help you make the best decision for your pet family. No technical language is used at all.


When your pet suffers an injury that was not planned for, we call that an accident.

When does your pet qualify as an accident? Some policies by industry leaders are as follows:

  • Punctures
  • Poisoning
  • Bone fracture
  • Vehicle injury
  • Bruises and bites from insects

The most popular pet insurance policies provide protection against disease and injury. Yet, the majority of insurers in this market provide accident-only policies for pets. These policies are only for emergencies; they do not cover conditions like cancer, diabetes, or heart disease.

Bilateral condition

A disease is considered bilateral if it affects both sides of the body. Conditions affecting the limbs and joints, such as hip dysplasia, are frequently referred to when the word "bilateral" is used.

A condition that was identified on one side of the body prior to insurance coverage being in place would typically be considered pre-existing on the other side as well. As a result, insurance probably won't pay for it.

Here's a specific example to clarify. Let's say your dog was covered before you found out they had hip dysplasia in just one hip. Your pet's bilateral conditions are considered pre-existing, per your insurance coverage. This implies that if your dog is later found to have hip dysplasia in their left hip, you will be responsible for the cost of any necessary treatment.

Chronic illness

Illnesses that can't be cured and won't go away in your pet's lifetime are considered chronic. A few examples of dog and cat chronic diseases are:

  • Cancer
  • Diabetes
  • Glaucoma
  • Kidney illness
  • Hyperthyroidism

Some insurance companies will pay for treatment for a long-term illness after it has been diagnosed. This is called the "waiting period."


A request for payment from an insurance company for services done by a licensed veterinary facility is called an insurance claim.

With Veterinary hospitals rarely receive payment from pet health insurance companies. Instead, they insist that pet owners pay for the entire vet bill out of pocket before filing a claim.

Fill out a claim form and provide your veterinarian's itemized bill when filing a claim. Typically, pet parents have 30 days from the date of treatment to submit a claim to their pet's provider.

The steps necessary to file a claim can vary from one service provider to the next. Pet owners can file claims to many insurers, including Healthy Paws and Embrace, via the insurers' websites or mobile apps. You can also try sending your claim via regular mail, fax, or electronic mail.


A copay (also known as coinsurance) is the portion of each vet bill that you are responsible for paying out of pocket. Your co-payment could be a set amount of money or a percentage of the total bill.

Here's an example that should help clarify the process. Let's say your cat has insurance and needs emergency veterinary care. Your 20% copayment will bring their total bill to $1,000. After meeting your deductible, you will need to pay an additional $200 out of pocket before receiving reimbursement from your insurance company. (More on the subject of deductibles in a moment.)

There are many different copayment choices available from different providers, and some even allow you to determine the amount yourself.

Curable illness

Your pet's insurance coverage may pay for treatment of a curable condition if its symptoms have subsided for a set amount of time.

Some typical treatable diseases covered by pet insurance are:

  • Ear infections
  • Respiratory illnesses
  • Bladder and kidney infections
  • Diarrhea and vomiting

Some insurance companies will pay for curable conditions, but only if the same symptoms don't return within a year of the initial diagnosis. There is rarely a root cause for problems that may be treated (like cancer).

Here's a sample of how it could be used. Let's say you got your dog insured, but before you did so, he developed an ear infection. Your veterinarian concluded that the ear infection was not due to any external factors. It's been two years since your dog first showed signs of ear trouble. Suddenly, for no apparent reason, they develop yet another ear infection.

Since the second infection didn't occur again within a year, in theory, treatment costs shouldn't be out of pocket. Curable conditions may or may not be covered depending on the insurer, so read the fine print or ask your doctor for further information.


The deductible is the out-of-pocket expense you must make before your pet insurance company begins paying for any services.

When it comes to pet insurance, how do deductibles work? Deductibles can be one of three varieties:

  • An annual deductible
  • Condition-based deductible
  • Lifetime deductible per condition

Let's analyze each one in more detail.

An annual deductible

The deductible is the out-of-pocket expense you must pay each policy year before your pet insurance begins to pay for any covered services. In most cases, pet insurance will have a yearly deductible.

What happened is as follows. Imagine your cat has diarrhea and you have a $200 annual deductible for veterinary care. A total of $500 is due. Your out-of-pocket maximum would be $200 plus your copayment before insurance would cover the rest.

Since you have already paid your annual deductible, you will only be responsible for your copay when taking your cat back to the doctor for a broken tooth. The same holds true for all other covered veterinary care provided during the policy year.

Condition-based deductible

A per-condition deductible is also called a per-incident deductible. It is the amount you pay out of pocket for a single health condition during the policy year. If your pet is diagnosed with many health problems throughout the insurance year, you will have to pay a separate deductible for each ailment.

Here's a case in point. If your dog needs to see the vet for a bite wound, and your plan has a per-condition deductible of $150. The deductible for this condition is $150, plus your copayment. Then, six months later, your pet eats something poisonous and requires another trip to the clinic. If the two ailments are unrelated, you'll have to pay two deductibles, each of which is $150.

Lifetime deductible per condition

The amount of money you'll have to pay out of pocket over the course of your pet's lifetime for medical care is known as the "per-condition lifetime deductible." The deductible only needs to be met once per condition, rather than annually.

Take the case of a dog diagnosed with heart disease as an illustration. Your deductible is $200, and the total bill is $2,000. This deductible would apply just once for all covered services provided throughout their lifespan. When you pay your deductible, insurance company will pay 90% of the remaining $1,620 needed to treat your dog's heart illness.

You will have already satisfied the per-condition lifetime deductible for heart disease, so the next time your dog needs cardiac care, it will only cost you $900. Of course, if your dog breaks a leg, you'll have to pay the deductible before the insurance company helps pay for the vet bills.


The terms of coverage in an insurance plan might vary widely. What follows is a list of medical issues and associated expenses that your health insurance will not cover.

Most pet insurance policies do not cover the following.

  • Grooming
  • Pregnancy
  • Spay/neuter
  • Dental cleaning
  • Diseases caused by parasites
  • Anal gland discharge
  • Alternative medicine, including homeopathy
  • Funeral, cremation, and other final expenses
  • Aesthetic surgery like declawing and tail docking

Wellness plans and pet insurance add-ons can pay for annual checkups, spaying and neutering, grooming, and other maintenance-related expenses.

Provider-specific exclusions may also apply. Read your policy's fine print carefully so you know what is and isn't covered. Also, feel free to contact your service provider with any inquiries.

Lifetime maximum payout

The maximum lifetime payout is the amount your insurance provider will pay out in total for your pet's lifespan. This could be expressed as a monetary value or a percentage.

If the maximum payout on your cat's policy is $10,000, for instance, your insurer will not reimburse you for any more expenses once they have paid out that amount.

You may want to consider getting another pet insurance policy if you use up your maximum lifetime payout. If you're worried about getting the most from an insurance policy, compare them to find one that fits your needs.

Per-incident maximum payout

Insurance companies typically have a cap on how much they will pay out for any given injury or illness.

For instance, if your policy's maximum payout per incident is $1,000 and your dog breaks its leg and requires surgery, your provider will only reimburse you $1,000.

Six months later, if your dog is diagnosed with allergies at the vet, your insurance company will pay up to $1,000 towards his or her treatment.

Our next pet insurance definition will explain why most companies limit their payouts to a total amount for the year rather than for each incident.

Maximum annual payout

This is the most money your insurer will pay out in one year to cover your veterinary bills. This sort of reimbursement is the norm in the pet insurance industry.

If your policy has a $5,000 deductible and a $100 copayment, the most your insurer will pay you back for covered expenses all year is $5,000.

Medically required

Any treatment directly related to an insured medical condition is considered medically necessary.

When it comes to cosmetic or non-medical surgery like ear cropping, medical need is usually not a factor. Also, surgery to fix problems that were present at birth may not be considered medically necessary, even if it would make your pet's life much better.

For example, dogs like Great Danes and Weimaraners can get bloat, which is also called stomach dilatation and volvulus. Prophylactic gastropexy is a surgical treatment that can reduce the risk of GDV. Insurance companies for pets may not cover this surgery if it is not used to treat an existing condition.


The cost of protecting your pet from unexpected financial losses is known as the premium.

The age, breed, species, and health history of your pet influence the cost of your monthly premium, which can be anywhere from $10 to $100.

A typical accident and illness policy will cost you between $28 and $47 per month. The cost of premiums may be adjusted in the future.

When the pet insurance premium is past due, what happens? Whether or not your pet is insured before you pay your premium depends on your provider. Several service providers allow a grace period before canceling coverage for nonpayment.

Existing medical conditions

Each insurance company has its own criteria for what constitutes a "pre-existing condition." Most commonly, the term "pre-existing condition" refers to:

  • A long-term ailment identified by your veterinarian either before or during the trial period
  • An incident that occurred or became apparent before the end of the waiting period, such as an injury or illness

Even if your pet has a health problem that has been around for a while, you may still be able to get it covered by an insurance company. That simply indicates that coverage for that ailment is being declined.

Preventive care

When it comes to healthcare, preventative measures are always preferred to curative ones. Medical insurance frequently does not cover preventive services like those in the list below.

  • Deworming
  • Treatment for heartworms
  • Preventatives for ticks and fleas
  • Grooming
  • Nail clipping
  • Vaccinations
  • Spay/neuter
  • Microchipping
  • Standardized blood and urine analyses
  • Regular checkups for health

As we've discussed, wellness insurance can help cover the expense of things like checkups and immunizations. Coverage for regular vet visits is an option with certain pet insurance plans.

Rate of reimbursement

Once you've paid your deductible and copayment, your insurance company will repay you at the reimbursement rate. This is usually a percentage, but it can also be a dollar amount.

Most popular pet insurance companies will pay between 60% and 90% of the cost of vet care. Your reimbursement percentage can be calculated using your copayment amount. If your copayment is 20%, the percentage you will be reimbursed is 80%.

Here's a simplified example to illustrate:

  • Vet bill: $1,000
  • Deductible: $100
  • Copayment Amount: 20%
  • Reimbursement: 80%

The entire amount due is due at once. After that, your insurance company will deduct your $100 deductible and your $200 copayment. Your claim, if accepted, will entitle you to a $700 reimbursement.

Waiting period

The time that passes between when someone enrolls and when their coverage starts is known as the "waiting period." Simply put, until the waiting period ends after you enroll in an insurance plan, your pet will not be insured.

How long, on average, does a pet insurance waiting period last? A 14-day waiting time is typical for diseases, though this will vary by provider. There are a lot of companies that offer instant accident insurance. Injuries to the cruciate ligaments are among those that have a longer recovery time.

Why do pet insurance companies make you wait before paying a claim? With waiting periods, pet owners are less likely to buy insurance for a sick animal. This cuts down on insurance fraud.

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