How do pet insurance dedutibles work?

A deductible on your pet insurance policy works the same way as it would with auto or home insurance. A deductible means that there is a certain amount the policy holder must pay out of pocket before insurance coverage kicks in. With pet insurance this generally takes two forms, a per visit deductible or a yearly deductible. With a per visit deductible the pet owner would be responsible for a fixed amount, typically between $50 and $200 dollars of care before insurance coverage will apply. A yearly deductible would work in a similar way, but would be capped on a per year basis rather than applying on each and every vetrinary visit.

How do co-payments work?

A co-payment allows the pet insurance company to charge a lower monthly premium by sharing the costs of care with the pet owner. Many pet insurance policies opt for an 80% to 20% split. This means that after any deductible amount has been met the insurance company will pay for 80% of the cost of care and the pet's owner will be responsible for the other 20% of the cost. Understand that the lower the co-payment, the more expensive the monthly premium will be. To maximize the value of your policy, ask yourself what the maximum you could pay out of pocket is and make sure that the copay will not exceed that amount even if the maximum coverage was needeed.

What to watch for

When comparing pet insurance policies take into account the trade-off between high deductibles and co-payments and the insurance premium. One way to view the maximum amount of deductibles and co-payments you should accept is to figure out what your out of pocket expense would be if the full coverage of the policy was needed. If this amount exceeds your ability or desire to pay for vetrinary care then you should shop for a policy for lower requirements.