When delving into the world of pet insurance, the term "excess" or “co-pay” often causes confusion for many pet owners.

Understanding how excesses function is key to making informed decisions about your beloved companion's healthcare cover and selecting the best pet insurance policy for your needs.

What exactly is a pet insurance excess?

An excess is the amount you, as the policyholder, must pay towards your pet's veterinary expenses before your pet insurance policy begins to reimburse you. Think of it as your agreed contribution to the vet bill before the pet insurance provider steps in to cover the remaining eligible costs.

For example, if your chosen pet insurance plan has a £250 excess and your dog or cat incurs a £1,000 medical bill for an unexpected illness or injury, you would pay the first £250. This means your insurer would then reimburse you or pay your vet the remaining £750, if the claim is agreed. This is a crucial factor to consider when comparing pet insurance quotes.

What is a pet insurance co-pay excess?

Some policies now have an excess amount and a co-pay amount. A co-pay amount is an additional percentage of any claim that you will pay. For example, if you have a vet bill of £1000, an Excess of £100 and a co-pay of 10% you will cover the £100 excess and 10% of the remaining claim amount, which would be 10% of £900 which is an additional £90. In total you will pay £190 of the claim and the insurer will reimburse you for the remaining £810. The Lifetime Cover policies offered by the Kennel Club are one example of policies that have both an excess and a co-pay amount. 

In some cases, the co-pay percentage is something you can set yourself. In these cases, if you wish to pay a higher co-pay amount you can, and this will lower the cost of your pet insurance. Cover My Pet offer Lifetime Pet insurance policies with variable co-pay percentages.

In some instances, the co-pay amount only becomes applicable when your pet reaches a certain age. Lifetime Pet Cover policies work this way.   

Decoding the different types of pet insurance excesses

When you're evaluating pet insurance policies, you'll typically encounter a few different types of excesses. Knowing these distinctions can significantly help you compare pet insurance options effectively:

• Annual Excess: This is the most common type of excess seen in the more expensive insurance policies. You pay this excess once per policy year if you make any claims. Once it's met, your insurer will cover eligible vet bills for the remainder of that policy year. It's important to remember that when your policy renews annually, this excess resets, meaning you'll need to pay it again if your pet requires further treatment in the new policy year.
• Per-Condition Excess: With this type of excess, you pay an excess for each new illness or injury you claim for. For instance, if your pet is treated for an ear infection and later experiences a broken leg, you would pay a separate excess for each distinct condition. If treatment for a particular condition stretches over more than one policy year you may have to pay the excess again in each new policy year.  
• Lifetime Per-Condition Excess: While less common in the UK pet insurance market, some specialist insurers may offer a lifetime per-condition excess. The benefit here is that once you've paid the excess for a specific condition, you won't have to pay it again for that condition in the future, regardless of how many times your pet needs treatment for it. This can be particularly beneficial for chronic conditions, but it's essential to verify its availability with UK providers.

How your excess choice impacts your pet insurance premiums

There's a direct relationship between the excess you choose and your monthly pet insurance premium:

• Higher Excess = Lower Monthly Premium: Opting for a higher excess can reduce your monthly premium, making pet insurance more affordable upfront. This can be an attractive option for those looking for cheap pet insurance.
• Lower Excess = Higher Monthly Premium: Conversely, choosing a lower excess will result in a higher monthly premium. However, this reduces your out-of-pocket expenses should your pet require veterinary care.

It's crucial to balance what you can comfortably afford on a monthly basis including pet insurance premiums, routine care costs such as worming, flea and tick preventative medications and vaccinations, boarding or day care costs, with what you could afford to cover during a veterinary emergency. This financial consideration is vital when determining the best pet insurance policy for your specific financial situation.

Weigh everything up and read the small print

Understanding how pet insurance excesses work is fundamental to selecting the right pet insurance policy for your furry friend. When evaluating your options, consider your pet's health status, age, your personal financial circumstances, and your comfort level with potential vet care expenses. Always take the time to read the small print of any policy to ensure you are fully aware of what types of claims are and are not covered, and how excesses are applied.

Comparing different pet insurance plans can seem daunting, but armed with a clear understanding of excesses, you're better equipped to make a well-informed decision that provides peace of mind for both you and your pet.