What are pet insurance benefit limits & how much can you claim?

21 July 2016
In this article, we explain how annual benefit limits apply to pet insurance claims, and how age limits affect your insurance policy.

Pet insurance claims work by the insurance provider reimbursing you for the eligible costs of medical treatment for beloved Fluffy or Fido. But there’s always a limit to how much an insurer will pay towards your pet’s treatment.

Different insurance providers are willing to stomach varying levels of risk and will therefore have different benefit limits.

The type of cover you choose – Accident Only, Accident and Illness, or Comprehensive – will also determine your benefit limits on certain conditions or accidents. But firstly:

Pet insurance is insurance designed to pay, in part or in full, for the cost of medical treatment for your dog or cat (or horse, or bird). The range of injuries or illnesses covered depends on your choice regarding the level of cover. Accident Only policies will cover the cost to visit a vet after accidental harm or injury such as car accidents, scratches from fighting with other animals, or snake bites. Accident and Illness policies cover accidents plus the cost of seeing a vet for illnesses such as cancer, infection, hereditary conditions, and more. Comprehensive policies should include all of the above plus cover for the cost of routine care treatments such as vaccinations, worming treatments, de-sexing, dental care, and behavioural training. Some policies will even pay you if your pet should die or be lost or stolen. Compare pet insurance with Canstar: http://www.canstar.com.au/pet-insurance/

What is a Benefit Limit?

Most pet insurance policies place an annual benefit limit on the total amount you can claim per year. Anecdotally, our research shows that most people will never reach their annual benefit limit. But the peace of mind in knowing you can claim that much is worth paying for, even if you only use a fraction of the pet insurance benefit available.

Some policies have sub-limits that restrict how much you can claim to treat a certain condition per year. It’s worth knowing what the sub-limits are for the health conditions most common to your breed. That way, you can check that should the condition arise, your policy will provide sufficient coverage.

Some insurers also place sub-limits on how much you can claim for any one type of treatment per year, such as X-rays, medications, and surgeries. If you choose one of these plans, make sure you read the fine print and know exactly how they work so there are no surprises if you do need to make a claim.


What is an Out of Pocket Expense?

Your “out of pockets” are a big consideration when it comes to choosing the right pet insurance policy.  Although it is nearly impossible to foresee what might happen to your pet, here are the things to consider…

Larger claims:

  • Co-payments will be extremely expensive. Do you have sufficient funds to cover this?
  • Policies with high percentage of cost reimbursement are highly regarded. The high premiums are able to be offset when it comes to making a claim.

Smaller claims:

  • Co-payments are more manageable.
  • When you weigh up the costs of premiums, excess and co-payment, you may be better off with a policy which has lower benefits.

A good policy is one which meets the following criteria:

  • Low monthly premiums.
  • High annual benefit limit.
  • High percentage of vet costs reimbursed.

Here’s what mean when we talk about “co-payments” and “reimbursement”:

Most insurers follow the reimbursement model, where you pay your vet, file a claim with your insurance provider, and receive a reimbursement of a certain percentage of your costs. Depending on the age of your pet and your choice of insurer, that percentage might be anything from 100% down to 60% or even 50%. Usually, a policy that refunds or reimburses you up to a 100% claim limit of your costs will be more expensive in premiums than an 80% policy.

Under the reimbursement model, pet owners need to know whether they can afford to pay a large vet bill upfront before getting anything back from their insurer.

Remember what we said about age limits – even if a policy appears to cover 100% of your claim, check the fine print to see whether the age of your pet may mean you are only covered to get 60% back.

A different option is the direct model, where your insurer will pay your vet directly for the bill. Under this model, consumers only need to make a co-payment towards their bill if their insurer pays less than 100% of the bill. 3 of the providers currently on our database this year will pay your vet directly:

  1. Petplan (underwritten by Allianz Insurance)
  2. PetSure (also underwritten by Allianz Insurance)
  3. Woolworths Pet Insurance (underwritten by Hollard Insurance)

But don’t forget about that excess! Even with a 100% reimbursement or direct payment, pet owners will need to pay any excess that applies to a certain condition.

About pet insurance out of pocket expense

What is an Excess?

The excess is the amount that you (the pet owner) pay towards a claim. Some insurance providers let you choose between a higher excess with a lower monthly premium (e.g. $200 per claim) or a lower excess but a higher monthly premium (e.g. $0 excess per claim).

For example, if your pet has an ongoing stomach complaint and requires follow-up treatments, only one excess should apply to the treatment of this complaint.

But be warned – some insurers charge per claim, not per condition. With all good insurers, you only need to pay an excess the first time you make a claim regarding one condition. With other insurers, you are asked to pay an excess each time you make a claim, even if multiple claims relates to the same condition.

What is an Age Limit?

The age limit on a policy can affect the age that a pet can get a new insurance policy, and the age of your pet can also effect the reimbursement percentage you receive on claims.

At the minimum end of the age limit, in general, you can insure a cat or dog from the time they are 8 weeks old. It is wise to get pet insurance before any medical problems have a chance to develop. If you apply for pet insurance after health conditions are discovered, these would be deemed pre-existing conditions and would be excluded from coverage.

As for the maximum age limit, you can usually continue insuring a cat or dog up until the age of 7, 8 or 9 years old, and after that point you cannot apply for a new policy, but you are eligible for lifelong cover. Lifelong cover means that you stick with the insurance provider you currently have and renew that policy each year from then onwards – as long as it is still affordable and necessary. That way you know that your pet’s current health situation will continue to be covered, whereas applying for a new policy would have meant that their current pre-existing conditions would likely be excluded.

Some providers specify that there is no upper age limit for their Accident Only plan, but they have an age limit on applying for their Accident and Illness and Comprehensive policies.

The reimbursement percentage you receive on insurance claims can also change according to the age of your pet. For example, you may be covered for 100% until your cat or dog turns 8, and then you might be covered for 80% from then on.

In June 2016, ASIC began cracking down on misleading pet insurance advertising, resulting in hundreds of thousands of dollars in compensation to pet insurance customers. One insurance provider had been advertising “100% reimbursement” policies without explaining that they only reimbursed 65% to 80% of claims once a pet reached 8 years old. Cases like this highlight why it’s important to always read the fine print in any insurance policy!

What is the age limit for pet insurance


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