How To Compare Deductibles And Premiums In Pet Insurance Costs

Pet insurance gives you peace of mind that your pet will receive the care they need, even when you’re faced with an unexpected vet bill. However, navigating the different types of policies to find the right cost level can be a challenge. 

There are many factors to consider when choosing a pet insurance policy, but few aspects affect your wallet more than your deductible. Your deductible and the premiums you pay are directly related, so finding the right balance between the two can significantly impact your monthly budget and your long-term out-of-pocket costs.

When selecting the right deductible level for your pet insurance plan, consider examples of how deductibles affect premiums and use these practical tips for managing your premium costs.

Basic overview of pet insurance deductibles

A deductible is the amount of money you must pay out of pocket before your pet insurance policy begins to cover your pet’s medical expenses. 

In general, pet insurance deductibles are applied annually or per incident:

• Annual deductibles require you to meet a set amount each year before the insurance company covers expenses. For example, if you choose a $500 annual deductible, you must pay $500 in vet bills before your insurance kicks in for any further expenses that year.
• Per-incident deductibles apply to each specific medical issue your pet faces. For instance, if your pet injures a leg and later develops an illness, you must meet a separate deductible for each incident.

Deductibles are just one part of your pet insurance plan, but they directly impact the premiums you pay each month. Choosing a higher deductible means you’ll pay less in premiums. Picking a lower deductible increases your monthly payments.

The costs of high vs. low deductibles

When deciding between a high or low deductible, it’s important to understand how this choice will affect your premiums. Here’s an example to show how this works in practice.

Imagine you’re considering a pet insurance policy for your dog, and you receive the following options from an insurance provider:

• $250 deductible: Monthly premium of $60
• $500 deductible: Monthly premium of $40
• $1,000 deductible: Monthly premium of $25

In this example, you can see that as the deductible increases, the premium decreases. While a higher deductible means lower premiums, you will pay more out of pocket before the insurance company begins to cover costs. So, while you may pay less monthly, you’ll be on the hook for your larger deductible when your pet needs care.

How to choose the right deductible level for you

Choosing the right deductible depends largely on your financial situation and your expectations for your pet’s medical needs. 

If you expect to use your insurance frequently — for example, if your pet is older, has a known medical condition or is simply injuring themselves frequently — a lower deductible might be the best option. Your premiums will be higher, but you’ll have less to pay out of pocket each time you file a claim.

On the other hand, if your pet is relatively young, healthy and less likely to cause chaos resulting in injury, you might prefer to take on a higher deductible. This allows you to save money on monthly premiums while still having coverage in case of a serious illness or injury.

Here are a few factors to consider when deciding on the right deductible for your pet insurance plan:

• Budget: How much can you comfortably afford to pay each month for premiums? If your budget is tight, a higher deductible might make sense to keep premiums manageable. Just be sure you’re prepared to pay the deductible if an emergency arises — setting aside the full deductible amount in savings is smart.
• Pet’s health: If your pet has a history of frequent health issues or is prone to certain conditions, a lower deductible may be more cost-effective in the long run, despite the higher monthly premiums.
• Risk tolerance: Are you comfortable paying more upfront in an emergency in exchange for lower monthly costs? If so, a higher deductible might be the right choice for you.

Other ways to manage premium costs for pet insurance

Beyond choosing the right deductible, various other strategies can help you manage the cost of pet insurance premiums.

Adjust your coverage level

Many pet insurance companies offer different tiers of coverage, from basic accident-only plans to more comprehensive plans that include routine wellness care. A more basic plan can reduce your premiums, but you should weigh the trade-offs in coverage.

Consider wellness or routine care add-ons carefully

Some insurance plans offer optional wellness care add-ons that cover things like vaccinations, flea and tick prevention and routine exams. While these add-ons and riders can be helpful, they often come at an additional cost. 

If you want to keep your premiums as low as possible, consider whether you can pay for routine care out of pocket instead of adding this coverage to your policy.

Look for discounts

Some of the best pet insurance companies offer discounts that can help lower your premium costs. Common ways to save include multi-pet discounts, discounts for paying your annual premium upfront and even discounts for being part of certain organizations or employers. Be sure to ask about any available discounts when shopping for a policy.

Select a lower reimbursement percentage

Most pet insurance plans let you choose the percentage of covered expenses that will be reimbursed. For example, a plan might offer reimbursement levels of 70 percent, 80 percent, 90 percent or even 100 percent. Choosing a lower reimbursement level will reduce your premiums but increase your out-of-pocket costs for each claim.

The bottom line

Finding the right balance between your deductible and premium is an important part of managing the cost of pet insurance. Even with cheap pet insurance companies, higher deductibles mean lower premiums and lead to higher out-of-pocket costs when filing a claim. On the other hand, lower deductibles increase monthly premiums but reduce the amount you pay when your pet needs care.

To make the best choice, consider your budget, your pet’s health and how often you expect to use the insurance. Don’t forget to explore other cost-saving options like adjusting your coverage level, selecting a lower reimbursement percentage and taking advantage of available discounts. And when you do choose a high-deductible plan, be sure you set aside cash to cover an emergency vet visit. With the right strategy, you can ensure your pet gets the care they need without breaking the bank.

Frequently asked questions

• What happens if I choose a very high deductible?
  

  If you choose a high deductible, you will save on monthly premiums, but you may face higher out-of-pocket costs when your pet requires medical care. This could put a strain on your finances in the event of an emergency. It’s important to be sure you have the funds to cover the deductible should something happen to your pet.

• Can I change my deductible after choosing a plan?
  

  Most pet insurance providers allow you to adjust your deductible during your policy renewal period. However, it may not be possible to change your deductible mid-term, so it’s important to carefully choose your deductible when you first sign up. Check with your provider to understand any specific rules about adjusting deductibles.

• Are there pet insurance plans without deductibles?
  

  Yes, some pet insurance companies offer plans without deductibles, but these plans often come with higher premiums. Additionally, they may only cover certain types of care, such as wellness visits or routine checkups, rather than comprehensive illness or injury coverage.

• How do pre-existing conditions affect my deductible?
  

  Pre-existing conditions are usually excluded from coverage in most pet insurance policies, meaning your deductible won’t apply to treatments related to those conditions. However, if your pet develops new health issues after the policy is in place, the deductible will apply as normal for those conditions.