Key Terminology
Essential insurance terms every pet owner should understand before comparing policies.
Excess, Benefit Percentage, and Limits
Understanding these three terms is critical to knowing what you will actually receive from a claim.
Excess (Also Called Deductible)
The excess is the amount you pay towards each claim before the insurer pays anything. For example, if your excess is $200 and your vet bill is $1,000, the insurer calculates their portion on the remaining $800.
Excess types vary: - Per-condition excess — you pay once per condition, per year - Per-claim excess — you pay on every claim - Annual excess — you pay once per year, then all subsequent claims have no excess
Higher excesses reduce your premium, but mean you pay more out of pocket per claim.
Benefit Percentage (Reimbursement Rate)
After the excess is deducted, the insurer pays a percentage of the remaining eligible costs. Common benefit percentages are 60%, 70%, 80%, or 90%.
Example with $200 excess and 80% benefit: - Vet bill: $1,000 - Less excess: $1,000 - $200 = $800 - Insurer pays 80% of $800 = $640 - You pay: $200 (excess) + $160 (gap) = $360
Annual Limit
The maximum total amount the insurer will pay in a policy year. Common limits range from $10,000 to $30,000 per year. Some policies offer unlimited annual limits.
Sub-Limits
Caps on specific categories within the annual limit — for example, $1,500 for tick paralysis, $300 for routine care, or $2,000 per condition. Sub-limits can significantly reduce the real value of a policy, even if the headline annual limit looks generous.
A policy with a $20,000 annual limit might sound generous, but if it has a $1,500 sub-limit per condition, a single expensive treatment (like cancer or orthopaedic surgery) will hit the cap quickly. Always check both the annual limit and any sub-limits in the PDS.
Other Important Terms
Premium
The amount you pay regularly (monthly or annually) to maintain your policy. Premiums typically increase each year as your pet ages. Some policies increase premiums based on claims history as well.
Cooling-Off Period
A period (usually 14–30 days) after purchasing a policy during which you can cancel for a full refund, provided you have not made a claim.
Co-Payment
The portion of the bill you pay after the excess. This is determined by the benefit percentage. If the benefit percentage is 80%, your co-payment is 20% of the eligible amount after excess.
Scheduled Benefit
Some policies pay based on a schedule of set amounts for each procedure, rather than a percentage of the actual bill. This can leave a significant gap if your vet charges more than the scheduled amount.
Multi-Pet Discount
Many insurers offer a discount (typically 5–10%) when you insure more than one pet on the same policy or account.
Insurance Terminology Flashcards
Terminology Quiz
Your pet's vet bill is $2,000. Your excess is $200 and your benefit percentage is 80%. How much does the insurer pay?