Pet insurance policies can be difficult to understand if you are unfamiliar with the meaning of the terms they contain. Many policies are written with jargon that is difficult to understand which can prevent you from knowing exactly what you are getting for your money.
Deductibles, co-pay, exclusions, pre-existing; the list of terms goes on.
Understanding what these terms mean before you start looking for a pet insurance policy will help you to avoid any frustration or confusion.
Here then are the meanings of the more common terms in pet insurance policies. The next time you read through the features of a pet insurance policy, you’ll have a better understanding of what everything means.
By knowing the meaning of each term, you’ll be able to ask intelligent questions, make informed decisions and ultimately buy the right policy for you and your cat.
Let’s get started.
Descriptions of Pet Insurance Policy Terms
The term ‘Deductible’ is fairly straight forward. You’ve probably heard of the term deductible from car insurance. If you don’t have a car or are new to insurance, here is what it means.
A deductible is essentially the money that is deducted from a Vet bill or a charge for medication. It’s the part of a claim that you are responsible for paying.
There are two types of deductibles in pet insurance; the annual deductible and the per-incident deductible.
The best way to explain what they mean is by example. Let’s say your Cat, Simone, is going to the Vet to be treated for an infection. After everything is done including the blood work, treatments, medications and visits to the Vet the total costs are $1800.
Luckily you have pet insurance and won’t have to take a second job to pay for the costs. The deductibles on your insurance policy determine how much money you will have to pay. The remaining amount will be paid by the insurance company.
First there is your annual deductible. Let’s say its $500. Next is the per incident deductible which is usually around $100. Your total deductibles come to $600. The remaining balance of $1200 dollars is paid through your insurance policy.
The next time Simone has to go to the Vet during the same year all you need to pay is the per-incident deductible and your policy covers the rest.
Once you’ve fully paid your annual deductible, you’re good for the rest of the year. With your annual deductible fully paid, you’ll only need to pay a per-incident deductible on any new claims made during the remainder of the year.
Per Incident Deductible
A per incident deductible is the amount that you pay on a claim for a specific incident. Depending on your pet insurance policy you may need to pay a per-incident deductible.
Let’s say your Cat has been diagnosed with kidney disease. The first time your Cat goes in for treatment you will pay a per-incident deductible. If the treatment continues you will not need to pay another per-incident deductible since it is part of the same incident.
If your pet dies during the term of your pet insurance policy, you will receive a benefit from the insurance company. This is a lump sum paid out to you that covers any related expenses such as the burial or cremation of your beloved pet.
A claim is a request made to a pet insurance company for any Vet expenses, treatments and or medications for your pet. Your pet insurance policy will have a list of the items you are able to claim for. Check your pet insurance policy to see the expenses you are able to claim.
Most claim forms are available on the insurance company’s web site. Once you have downloaded and printed the form, simply fill it out and mail it in.
The amount of time it takes your insurance company to process a claim and send out a payment varies from company to company. Check with your insurance company to see when you can expect to receive a payment.
A co-pay is a small fee that is paid each time you visit your Vet. Any additional expenses will be paid through your pet insurance policy. A Co-Pay is usually around $20. and must be paid before any other pet health insurance payments can be made.
Exclusions are items that your policy will not cover. Exclusions can be anything from specific diseases and ailments to the Vet you would like to use.
Depending on your pet insurance policy, only certain Vets or types of pet care will be covered. If you are unwilling to switch Vets, make sure the Vet you plan to use is covered before buying a policy.
Does your cat have any pre-existing conditions? Check to see if their condition is covered. Be sure to review all the exclusions of a policy and ask any questions in order to fully understand all the exclusions.
Most pet health insurance plans contain a number of common exclusions. If the pet insurance plan you are looking at has an exclusion that you need coverage for then ask what the additional cost would be to have the coverage added. If nothing can be done, consider looking for another pet insurance plan.
A surcharge is a fee charged to you when you are getting a pet insurance policy for multiple pets, a pet that has been sick before or an older pet. It’s always best to check and see if a surcharge will be included with your pet insurance policy.
A premium is the amount of money charged by your pet insurance company to keep your coverage active. This amount depends on the type and amount of coverage you have as well as the total deductibles in your policy.
A premium can be paid all at once to cover a one year period or on a monthly basis. Monthly premium payments can make the cost of pet insurance more affordable for those who can’t afford to pay the full amount up front.
A maximum payout is the total amount of money your policy will pay for the year to cover your pet health expenses. Once you reach the maximum amount your policy will not cover any further expenses until the next year.
Check the maximum payout for the policies you are planning to buy so you’ll know the most you can expect to receive each year.
A pre-existing condition is a disease or medical condition your cat has had before your pet insurance coverage started. It can also be a condition that has occurred during the policy waiting period, which would unfortunately be very bad timing. Your pet insurance company will go by the date the problem was first noticed by the Cat’s owner rather than when it was diagnosed by your Vet.
After you buy a policy, there is usually a waiting period before your pet insurance will become active. In the case your pet suffers from an illness or has an accident during the waiting period, there is a chance the condition will not be covered. A waiting period can be between two to six weeks depending on the physical condition of your cat.
AM Best Underwriter Rating:
The AM Best Rating is a top rating company that develops independent reviews on insurance companies. They determine how well an insurance company can make payments to you based on their financial state.
To get an idea of the stability and quality of the pet insurance company you are planning to go with be sure to take look at the AM Best Rating. This rating is a good indicator as to the ability of a particular insurance company to pay on a claim.
A better understanding of Pet Insurance policy terms.
We hope this list of terms and their meaning will come in handy during your search for a pet insurance policy. Although this list is not exhaustive, it will help you to better understand pet insurance policies.
There are many pet insurance companies with different plans available. By knowing the meaning of these common terms you’ll see that pet insurance isn’t as complicated as you may have originally thought.
If there is a term you come across while reviewing a pet insurance policy that is not covered here, share it with us in the comments. Also, be sure to ask as many questions as you need to fully understand the meaning of any terms not covered here.
Never assume or take someone elses word for anything that appears in a policy. It’s your money and your Cat’s welfare you’re protecting. Make sure you understand everything completely.
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