The five numbers in every policy
| Term | What it means | Effect on the price |
|---|---|---|
| Premium | What you pay each month or year to keep the policy active. | The number you see first, and rarely the whole cost. |
| Deductible | The amount you pay yourself before the insurer starts paying. | A lower deductible typically means a higher premium. |
| Reimbursement rate | The percentage of covered costs the insurer pays after the deductible, for example 70%, 80% or 90%. | A higher rate typically means a higher premium. |
| Annual limit | The most the insurer pays in one policy year. Some plans have no annual limit. | Higher or unlimited limits typically cost more. |
| Waiting period | The time after you buy before coverage starts. | Does not change the price, but decides when you can claim. See waiting periods. |
Deductibles come in different forms. Some plans use an annual deductible that resets each policy year, others apply a deductible per condition or per incident. The difference can change what you pay over several claims, so check which one your policy uses.
What happens when your pet needs care
- You visit the veterinarian and pay the bill. Many insurers reimburse you afterwards. Some offer direct payment to the clinic, so ask about it.
- You submit a claim with the invoice and, if requested, medical records.
- The insurer checks the claim against your policy: is the condition covered, has the waiting period passed, and is it a pre-existing condition?
- Your deductible is applied to the covered amount.
- You are reimbursed at your reimbursement rate, up to the annual limit.
A worked example
Suppose your dog has a $2,000 covered bill. Your plan has a $250 deductible, an 80% reimbursement rate and a $10,000 annual limit.
| Step | Amount |
|---|---|
| Vet bill | $2,000 |
| Minus your deductible | $2,000 − $250 = $1,750 |
| Insurer pays 80% of that | $1,400 |
| You pay | $2,000 − $1,400 = $600 |
Try your own figures in our payout calculator.
Types of pet insurance
The industry association NAPHIA tracks four kinds of products:
- Accident only: covers events such as foreign body ingestion, lacerations, motor vehicle accidents, ligament tears and poisoning.
- Accident and illness: accident coverage plus illnesses such as cancer, infections and digestive problems.
- Insurance with embedded wellness: comprehensive plans that may include vaccinations, early screening diagnostics, nutrition consultations and dental care.
- Endorsements: riders such as wellness or cancer add-ons.
The difference between the first two is the most important choice you make. We explain it in accident-only vs accident and illness.
What is usually not covered
Exclusions differ by insurer and by state, but three come up again and again: pre-existing conditions, conditions that appear during the waiting period, and any other exclusion your policy lists. Read the exclusions section before you buy. A policy that looks cheap can be cheap because it covers less.
How pet insurance is regulated
In the United States, insurance is regulated by the states. In August 2022 the National Association of Insurance Commissioners (NAIC) adopted a Pet Insurance Model Act, a template that states can enact. It requires clear disclosure of waiting periods, policy limits, exclusions and benefit schedules, requires insurers to prove that a pre-existing condition exclusion applies, and requires insurers to clearly differentiate pet wellness programs from insurance policies. Where a state has enacted it, these protections apply to policies sold there. Your state department of insurance can tell you what applies to you.
Is pet insurance worth it?
That depends on how well you could absorb a large veterinary bill. Only about 4.27% of U.S. pets were insured in 2025, according to NAPHIA. The largest single claims paid by NAPHIA members that year were $66,600 for a dog (an undiagnosed chronic illness) and $51,600 for a cat (cancer). Those are rare cases, but they show the risk a plan is designed to cover. Compare the premium with what you could set aside yourself and with what the plan would actually pay, and see what pet insurance costs.
Before you buy
- Compare plans with the same deductible, reimbursement rate and annual limit.
- Read how the policy defines a pre-existing condition.
- Check the waiting periods for illness and for orthopedic conditions.
- Find out whether the deductible is annual, per condition or per incident.
- Ask whether the insurer can raise your premium as your pet ages, and how often.
- Look for a free-look period so you can cancel after reading the policy.
Frequently asked questions
What is a deductible in pet insurance?
The amount you pay yourself before the insurer starts to pay. Depending on the plan it can apply once a year, per condition or per incident.
What does the reimbursement rate mean?
It is the percentage of covered costs that the insurer pays after your deductible. With an 80% rate and a $1,750 covered amount after the deductible, the insurer pays $1,400.
Does pet insurance cover routine care such as vaccines?
Not usually. Routine care is generally covered only through wellness add-ons or plans with embedded wellness. NAIC's model act requires wellness programs to be clearly distinguished from insurance.
Is there a free-look period?
The NAIC model act includes a 15-day free-look period, during which you can review the policy and return it for a full premium refund if you have not filed a claim. Whether it applies to you depends on your state and insurer, so check your policy.
Is pet insurance regulated?
Yes, by state insurance departments. Many states have adopted or are adopting the NAIC's 2022 Pet Insurance Model Act, which standardizes disclosures and rules on pre-existing conditions and waiting periods.
Sources
Figures and statements on this page were checked against the following sources on 20 September 2026. Prices, rules and policies change, so always confirm details in the policy documents and with your state department of insurance.