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In 2023, what is a reasonable annual maximum for pet insurance?


Edited by

Angela Bunt

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Angela Bunt is an accomplished editor with more than a decade of experience writing, producing and editing content. She has a breadth of knowledge spanning the home, travel, music and health industries, and she is a proud New Hampshire homeowner. In her spare time, Angela enjoys live music, watching the Real Housewives and hanging out with her dog, Jim.

Reviewed by

Dr. Kate Boatright

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I am a small-animal veterinarian with a passion for improving patient outcomes through client and veterinary professional education. I particularly enjoy soft tissue surgery, emergency medicine, feline medicine and internal medicine.

One of my core values is building relationships — with pet owners, veterinary professionals and students. Engaging in educational opportunities around cost of care, spectrum of care, communication and mentorship has allowed me to build relationships across the profession. In mentoring early career veterinarians, veterinary students and pre-veterinary students, I hope to have a positive influence on the future of our profession.

As the owner of two cats, I have found pet insurance to be a valuable tool to limit financial stress while allowing me to provide the care that is the right fit for our family.

A pet insurance policy relieves some of the unexpected and routine costs of pet ownership. To ensure most of these costs are covered, you’ll want to choose a policy with a good annual limit.

We at the Marketwatch Guides Team have extensively researched the premier pet insurance companies to help you find the right coverage. Here are the factors to consider when shopping for a plan and selecting an annual limit.

What Is a Pet Insurance Annual Limit?

If you’re a pet parent looking for insurance coverage, you’ve likely seen a lot of information about annual limits. But what exactly is an annual limit in pet insurance? We’ve broken it down below.

An annual limit is the maximum amount of money your pet insurance provider will pay per year once you’ve met your annual deductible. For example, if you have a pet insurance policy with an annual limit of $10,000 but you have $12,000 worth of expenses, you’re responsible for $2,000 of those expenses. You’ll be reimbursed for all covered items if you only receive $8,000 worth of services.

Remember that you’ll also need to pay the coinsurance and deductible amount. Let’s say you have a policy with a $250 deductible, a 90% reimbursement rate and a $10,000 annual limit. If your dog breaks its leg, it may have surgery, medication, exam fees, and follow-up checkups. These services total $7,000. First, you’ll pay the $250 deductible, leaving a $6,750 balance. If your insurer approves the claim, it will reimburse you $6,075, or 90% of the $6,750 balance.

The final bill for your dog’s broken leg would be $925. That includes the $250 deductible plus the remaining 10% co-pay ($675) of the $6,750 balance. Because the insurance company only paid $6,075 toward the claim, there’s still $3,925 left before you reach your annual limit.


What Are Maximum Reimbursement Limits?

Maximum limits vary by company. While there are many common maximum limits amongst providers, each has its own limitations. Below is a list of some of the more common pet insurance maximum limits.

  • Maximum amount per incident: This is the maximum amount your insurance company will pay for a particular incident. If your dog gets a laceration and there are follow-up problems, such as infection or improper healing, vet bills may not be covered if you’ve already reached the maximum on laceration-related claims.
  • Maximum amount per lifetime: This is the maximum amount the company will pay throughout your animal’s lifetime. For example, if your dog develops lameness due to spinal issues, it may need surgeries, treatments and medications. If your policy has a maximum amount per lifetime limit of $10,000 and your dog’s treatments exceed that amount, you’ll have to pay for the excess out of pocket.
  • Maximum annual limit: This is a per-year amount. If the maximum annual limit is $8,000, the company won’t pay more than that per year. The limit starts over when the new policy year begins.
  • Maximum limit of body systems: This is the total amount the insurance company will pay for a particular body part. For example, the limit for a paw may be $1,000. If the laceration your dog got costs $700 for stitches and medication, pet insurance covers only $300 in future paw-related claims.

Annual Payout Limit vs. Unlimited

While some pet insurance companies have no payout limit, others do. Both types have pros and cons.

Policies with annual limits are generally affordable, but if your pet is accident-prone or has congenital health conditions, you may end up paying a lot out of pocket for its care even with insurance coverage.

Some pet insurance companies offer policies with no payout limit. That means there’s no cap on how much your provider will pay for veterinary care covered under your policy; all eligible expenses will be reimbursed once you hit your pet insurance deductible. While these policies can offer peace of mind, they’re usually a lot more expensive.

What Happens if I Hit My Annual Limit?

Unfortunately, you may end up hitting your annual pet insurance limit. This can sometimes happen with cheap pet insurance companies with lower yearly limits. If you hit your limit, you’ll have to pay out of pocket for additional vet visits and treatment. Some vets offer financing options if you don’t want to pay with emergency funds or a credit card.

Another option is to upgrade your existing pet insurance plan. Suppose your pet has any chronic conditions or ongoing medical issues that your insurance company already covers. In that case, you may be able to switch to a plan with a higher maximum payout, though it may increase your monthly pet insurance premium. 

Switching plans rather than insurance companies is often the best option, as many companies have exclusions for preexisting conditions. Switching companies could also result in a waiting period after enrollment before you can access coverage again. If you stick with the same company but change your plan, your pet will remain covered.


How Do I Choose a Good Annual Limit for Pet Insurance?

It can be difficult to choose the right annual limit for your plan. While a lower annual limit means a lower monthly premium, it may leave your pet underinsured, resulting in high out-of-pocket costs for unexpected accidents or illnesses. You may save some money on your policy, but in these instances, having a low annual limit can be like having no insurance at all.

Here are some factors to consider when selecting an annual limit for your policy.

The Bottom Line: What Is a Good Annual Limit for Pet Insurance?

Choosing an annual limit can be stressful for pet owners. Most companies offer a range of options, and some even offer no annual limit. However, a good annual pet health insurance limit will leave you confident that your pet’s needs are covered.

Start by determining if your pet needs an accident-and-illness or accident-only plan and consider any additional wellness coverage. Then, look for providers with an annual limit that fits your budget and priorities.

It’s worth it to choose a company with a flexible policy. That way, you can adjust your annual limit if you feel you need to at any point.


Angela-Bunt-150x150

Angela Bunt is an accomplished editor with more than a decade of experience writing, producing and editing content. She has a breadth of knowledge spanning the home, travel, music and health industries, and she is a proud New Hampshire homeowner. In her spare time, Angela enjoys live music, watching the Real Housewives and hanging out with her dog, Jim.

DSC_0025_Boatright-150x150

I am a small-animal veterinarian with a passion for improving patient outcomes through client and veterinary professional education. I particularly enjoy soft tissue surgery, emergency medicine, feline medicine and internal medicine.

One of my core values is building relationships — with pet owners, veterinary professionals and students. Engaging in educational opportunities around cost of care, spectrum of care, communication and mentorship has allowed me to build relationships across the profession. In mentoring early career veterinarians, veterinary students and pre-veterinary students, I hope to have a positive influence on the future of our profession.

As the owner of two cats, I have found pet insurance to be a valuable tool to limit financial stress while allowing me to provide the care that is the right fit for our family.

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