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What does a Pet Insurance Excess Mean?
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The excess is the amount a pet owner pays towards any pet insurance claim. Here we explain the types of excess you might come across, an example illustrating how payments are shared between pet owner and insurer, discussion of when to choose a higher excess and information on how excess might change for older pets.
- What are the types of pet insurance excess?
- How much will I pay towards a vet claim? An example
- When do you pay the excess?
- Should you opt for a higher excess?
- Will I pay a higher excess for my older pet?
Types of Excess
The excess on a pet insurance policy is generally a compulsory, fixed £ amount (e.g., £100). Your policy may also include an optional voluntary amount (fixed £ or %) which you may opt to pay on top of the compulsory amount in order to reduce your premium.
Some insurers also require that you pay a copay, which is a percentage of vet fees. The copay percentage is calculated after the fixed £ excess. It's becoming more common for pet insurers to institute a copay once a pet hits a certain age (and claims are likely to increase).
Pet Insurance Example
How much are you really out of pocket when you make a claim on a vet bill? Let's say you have a policy with a £100 fixed excess and a 20% copay and you are submitting a claim for a £1,000 vet bill. You'd pay £280 and the insurance company would pay £720. Here's the breakdown:
| Excess Example with £1,000 vet bill, £100 fixed excess and 20% copay | |
|---|---|
| Starting Vet Fees | £1,000 |
| Owner excess contribution | -£100 |
| Owner copay contribution (20% of remaining £900) | -£180 |
| Insurer pays: | £720 |
| Pet owner pays: | £280 |
One question that many people have is, 'If my claim is for more than my limit, does the pet insurer pay the full limit or do they pay that less the excess?' The short answer is, it depends. Each insurer will have their own policy for this; and some insurers may change their policy, in which case it will take a year to transition everyone to the new policy as renewals come up.
For example, we recently reached out to Animal Friends to ask about this. They said this was one of the things that changed in last year's policy update. For any new policy taken out from 1st December 2021 or for any policy that renews after 1st December 2021, the excess is NOT removed from the vet fee. So a customer would be able to claim the full limit. Their existing customers are being switched over to the new policy terms in the month of their renewal, so by end of November 2022, this approach to the excess will apply to everyone.
How a Pet Insurance Excess Works
The excess is generally taken from the first claim on a new condition. For example, if you submit a claim for a £300 vet fee and your excess is £100, then your insurer will pay £200 of the claimed amount.
On most Lifetime types of pet insurance, in which the the vet fee limit resets each year you renew, you pay the excess on the first claim for each condition each year. For example, if you claim for an ongoing condition periodically over three years, you'd pay the excess three times—once per year for the same ongoing condition.
If you make multiple claims in one year and they are for different conditions, you'd pay the excess multiple times—once for each different condition.
But on a Max Benefit we've seen policies where the excess is either payable per condition (just once per condition) or per condition per year (so every year you claim for each condition). Be sure to check your documents.
And remember, if there is a % copay component of your excess, then you pay that % of all vet bills after the fixed £ excess is taken into consideration.
Optional Higher Excess = Lower Premiums
Some insurers provide the option to choose amongst a variety of excess amounts—for example, Tesco Pet Insurance can be purchased with an excess of £60, £120, £200, £300 or £500 and Agria sells policies with your choice of £95 or £160 fixed excess for dogs and £85 or £160 for cats. By choosing a higher excess amount you are likely to pay a lower premium—but you will also pay more towards any claims you make against the policy.
Our observations of the market tell us that it only pays to choose a higher excess if you don't make any claims in a year. Generally speaking, if you make a claim then you would be better off financially on a more expensive policy with a lower excess. You can learn more in our article analyzing the High Excess vs. Low Excess Dilemma.
If you would like a plan with both a relatively low excess and a low price, there are some decent, cheap Lifetime pet insurance options available in the UK that you may find suitable.
Excess Changes for Older Pets
Some insurers increase the excess for older pets, typically around the age of 8 to 10 years old for dogs and 9 to 11 years for cats. (Some breeds of dog are categorized as "older" once they turn 5.)
In that case, the "older" pet excess is most commonly your previous fixed £ excess + a 20% copay of remaining vet fees.