What’s a Pet Insurance Deductible?
The short answer: What you pay before coverage kicks-in.
- Types of pet insurance deductibles
- How do pet insurance deductibles work at Lemonade?
- What’s the difference between deductibles, co-pay, and reimbursement rates?
- How to choose a pet insurance deductible?
- Can you get pet insurance with no deductible?
- When is my deductible not applied?
- Can I ever change my pet insurance deductible?
A pet insurance deductible is the amount you pay out of pocket before your insurance company covers eligible vet bills. It’s a key part of how pet insurance works; you meet your deductible first, then your insurance kicks in based on your reimbursement rate.
Understanding deductibles helps you pick the best pet insurance for your budget and your pet’s needs. Let’s break down everything pet parents need to know.
TL;DR
- A pet insurance deductible is the amount you pay out of pocket before your insurance company covers eligible vet bills
- Depending on the insurer, you will either have an annual deductible that resets each policy year, or a per-condition deductible
- Choose your deductible based on your budget and pet’s needs. Higher deductibles mean lower premiums but more upfront costs on eligible claims, while choosing a lower deductible will lead to higher premiums, but lower upfront costs
- At Lemonade, you can always decrease your pet insurance coverage by increasing your deductible, but you can’t always increase your coverage by decreasing your deductible
Types of pet insurance deductibles
Pet insurance companies can offer two main types of pet insurance deductibles:
Annual deductible
You pay this amount once per policy year, and it applies to all covered conditions. Once you’ve met it, your insurance coverage kicks in for the rest of the policy term. This is the most common type across pet insurance providers.
Per-condition deductibles
You pay a separate deductible for each new condition or illness your pet develops. For example, if your dog gets an ear infection and later needs surgery for a torn ACL, you’d pay the deductible amount twice.
Most pet insurance plans use the annual deductible model because it’s simpler for policyholders to track and often more budget-friendly for pets with multiple health issues.
How do pet insurance deductibles work at Lemonade?
Lemonade uses an annual deductible system that resets annually when your policy renews. We offer deductible options of $100, $250, $500, or $750.
Here’s how it works:
- You pay upfront: When your pet needs care, you pay your vet directly
- Submit your claim: Upload your vet bill through the Lemonade app
- Deductible tracking: We track how much you’ve paid toward your annual deductible
- Reimbursement kicks in: Once you’ve met your deductible, we reimburse you based on your chosen co-insurance percentage (70%, 80%, or 90%)
AI helps us process claims at lightning speed, with over 50% of pet claims being handled instantly and approximately 80% of Lemonade Pet claims handled within 5 days.
What’s the difference between deductibles, co-pay, and reimbursement rates?
These three terms work together to determine your out-of-pocket expenses:
| Deductible | Reimbursement rate | Co-pay |
|---|---|---|
| The amount you pay before insurance coverage starts | The percentage of eligible vet bills insurance covers after you meet your deductible (this is your co-insurance) | The percentage you’re responsible for after your deductible is met |
Here’s how it works at Lemonade
Your dog swallowed a sock and needs $1,000 emergency surgery. You have a $250 deductible and 80% reimbursement rate.
Step 1: Apply your reimbursement rate to the total bill first
$1,000 × 80% (reimbursement rate) = $800
Step 2: Subtract your deductible from that amount
$800 – $250 (deductible) = $550 (Lemonade pays)
Your total out-of-pocket cost: $1,000 – $550 = $450
Lemonade reimburses you: $550
The 20% you pay before the deductible is your co-pay, it’s the flip side of your reimbursement percentage.
How to choose a pet insurance deductible?
Choosing the right deductible depends on several factors:
Spend now or later: A higher deductible means lower monthly premiums, but more out of pocket when you file claims. A lower deductible costs more monthly but reduces your immediate expenses during vet visits.
Consider your pet’s profile: While pet insurance protects against unexpected accidents and illnesses, your pet’s age and breed can help guide your decision. Breeds known for specific health issues (like hip problems in large dogs or breathing issues in flat-faced breeds) might benefit from a lower deductible since they’re more likely to need treatment as they age.
Budget reality check: Think about what you can comfortably handle in an emergency. If a $500 vet bill would strain your budget, a lower deductible makes sense. If you can easily cover $1,000+ in pet emergencies, a higher deductible could save you money on monthly premiums over time.
Other policy factors: Your co-insurance and annual limit work together with your deductible to determine total out-of-pocket expenses. A higher deductible paired with 90% reimbursement might cost less overall than a lower deductible with 70% reimbursement.
Can you get pet insurance with no deductible?
Most pet insurance companies require some deductible, and Lemonade’s minimum is $100. However, some insurance services offer $0 deductible plans, though they typically come with super higher premiums and can have other limitations like lower reimbursement rates or coverage exclusions.
The trade-off usually isn’t worth it for most pet owners. A $100 annual deductible keeps premiums reasonable while still providing meaningful protection against major vet bills.
When is my deductible not applied?
Your deductible doesn’t apply to wellness care when you add one of Lemonade’s Preventative Care packages.
These packages include:
- Annual wellness visits
- Vaccines and boosters
- Routine blood work
- Heartworm and flea prevention
Wellness coverage works separately from your base policy, you get reimbursed for these routine care expenses without meeting any deductible. Think of it as your pet’s yearly maintenance plan. Just like you get an annual physical without worrying about your health insurance deductible, your pet can get their routine care covered separately from unexpected accidents and illnesses.
This means even if you haven’t met your annual deductible yet, you can still get reimbursed for that routine vet visit or vaccination appointment.
Can I ever change my pet insurance deductible?
In some cases, yes.
If you want to decrease your deductible (increase your coverage), you can do so within 14 days of purchasing your policy, along with other upgrades like increasing your reimbursement rate or coverage limit.
You can decrease your coverage (by increasing your deductible) directly on the Lemonade app at any time during your policy period.
If it’s been more than 14 days since you purchased your pet insurance policy, you’ll have to wait until renewal (12 months after your initial purchase) to decrease your deductible. Don’t worry, you’ll get an email reminder from us beforehand!
FYI, any coverage changes are subject to approval from our Underwriting team, and could be impacted by claims you’ve filed.
Most pet insurance providers follow similar rules; coverage changes typically happen at renewal, not during your current policy term. This prevents people from lowering their deductible right before a big claim.
Before we go…
Understanding how deductibles work helps you make informed decisions about your pet health insurance. Whether you’re comparing pet insurance plans or adjusting your current coverage, the right deductible balances your monthly budget with your comfort level for unexpected vet expenses.
Remember, the goal isn’t just finding the lowest deductible, it’s finding the sweet spot that fits your personal finance situation and gives you peace of mind about caring for your pet. Ready to see how different deductible options affect your coverage and monthly costs?
Pet insurance deductible FAQs
What happens to my deductible if I switch pet insurance companies?
Your deductible doesn’t transfer between insurance providers. You’ll start fresh with your new company’s deductible, and any amount you paid toward your old deductible is lost. This is one reason to carefully research the best pet insurance before switching.
Do waiting periods affect my deductible?
No, waiting periods and deductibles are separate. You still need to meet your deductible for covered conditions, even after waiting periods end. Most pet insurance plans have waiting periods for all conditions and won’t cover pre-existing conditions.
What's the point of a deductible?
Deductibles keep pet insurance affordable for everyone by having you cover smaller expenses while insurance companies focus on bigger, unexpected vet bills that could really strain your budget. Think of it like this: you probably don’t want to file a claim for a $75 routine ear cleaning, but you definitely want help with a $3,000 emergency surgery. Deductibles ensure pet insurance protects you from major financial surprises while keeping monthly premiums reasonable.
Should I file a claim if my vet bill is less than my deductible?
Yes, you can file a claim even if your vet bill is smaller than your deductible amount. At Lemonade, your deductible is annual so every dollar counts toward reaching it for the year. That $150 ear infection treatment in March gets you closer to your $250 deductible, so when your pet needs a $400 procedure in July, you’ll only pay $100 more before reimbursement kicks in.
If I insure multiple pets, do they each need a separate deductible?
Yes, at Lemonade each pet has their own separate annual deductible, so if you have two dogs with $250 deductibles, you’ll need to meet $250 for each dog before reimbursement starts for that pet. This means your total potential deductible expense is multiplied by the number of pets you insure, though we do offer multi-pet discounts to help offset some of the cost, and each pet’s deductible resets annually on their individual policy anniversary.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.
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