Understanding Pet Insurance Terms

Having a pet is a big responsibility that requires a lot of time and sometimes a lot of money. In fact, one of the biggest drawbacks to having a pet is paying for the veterinarian if your pet gets sick or has an accident. You may be thinking of getting pet insurance but you do not know anything about it so you are not sure what to choose. If you select the wrong policy and it does not cover what you need when you need it, there is going to be a problem. You want to be sure you have the right kind of coverage for your pet so it is best to know some of the most common terms before you even start looking for a policy.


An accident is any unintended or unexpected event that causes injury to your pet.

Chronic Condition

A chronic condition includes any kind of illness or injury that is not able to be cured and is expected to continue throughout your pet’s lifetime.


A claim is a request to be reimbursed for the treatment of your pet by a licensed veterinary professional. Each insurance company has their own list of services you can claim and how much you are able to claim.


With some insurance policies, you may have to pay a small amount of money each time you see a veterinary professional. The additional costs that are covered will be paid for by your insurance company. The copay for most insurance policies is about $20 to $25.


There are two different kinds of deductibles. A deductible is the amount of money you and your insurance company agreed that you must pay before they start covering your pet’s veterinary care. An annual deductible is an agreed upon amount of money that you must pay every year before the insurance company begins to pay for your pet’s care.


Each insurance policy has their own exclusions. These are the conditions or care that your insurance policy does not cover. Exclusions may be certain illnesses or diseases, treatments, or even the veterinary professional that you can use. Some examples include grooming, anal gland expression, nail clipping, dental work, and experimental treatments.

Maximum Lifetime Payout

The maximum lifetime payout is the maximum amount of money that your insurance company will reimburse you during your pet’s lifetime. In other words, if the lifetime payout is $10,000 for your dog Fido, they will not pay for anything else after they have spent $10,000. In fact, even if that $10,000 is spent by the time he is two years old, you will not be able to get any more reimbursement for Fido if he gets sick or hurt. You will have to find a different insurance company.

Maximum Payout Per Incident

This is the maximum amount of money that your insurance company will pay for each injury or illness. For instance, if your maximum payout per incident is $1000 and Fido has to have surgery to fix his broken leg, anything over $1000 the insurance company will not cover.

Maximum Payout Per Year

The maximum payout per year, or maximum annual payout, is the total amount that your insurance company will reimburse you for each year.

Medically Necessary

Anything that is directly related to an injury or illness that is covered by your insurance policy is medically necessary.


The premium is the amount of money you have to pay per month or per year for your pet insurance policy.

Pre-Existing Conditions

Each insurance company may vary, but the most common meaning of pre-existing conditions includes:

  • A chronic condition that your veterinary professional has diagnosed before your waiting period
  • An injury or illness that you knew about before the end of the waiting period

Preventative Care

Includes worming, heartworm medication, flea control, grooming, nail trimming, and vaccinations. This also sometimes includes spaying and neutering. In addition, dental care that is not related to an injury.

Waiting Period

Some plans make you wait a certain amount of time after paying your first payment before the insurance is activated. If your pet has an injury or illness during that time, the company may decide not to cover it. The waiting period is usually about two to six weeks.

Of course, these definitions may vary from one company to another so you should be sure to ask questions about anything you do not understand. Get it in writing and take it with you to show your veterinarian for advice before you pay for it. Your veterinarian can tell you whether or not the policy is a good idea or not.

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