My pet insurance policy mentions a limit (or cap) on benefits. What does that mean?

Share
More

Some pet insurance policies will limit the amount paid in claims for your pet. (There are also policies with no limits). Generally, there are five different types of limits on payouts:

    * **Maximum payout per incident** - This is the maximum amount the insurance company will pay out for each separate illness or injury. Once you hit that limit, the insurance company will not reimburse any additional expenses for that incident. For policies that have a maximum payout per incident, the limits can go up to $7,000.


    * **Maximum payout per year **- This is the maximum amount the insurance company will pay for each twelve-month period on your policy. Once you hit that limit, you're not eligible for any more money until the next year. For policies that have a maximum payout per year, the limits can go up to $20,000.


    * **Maximum lifetime payout **- This is the maximum amount the insurance company will pay during the lifetime of your pet. Once you hit that limit, you're not eligible for any more reimbursement and your policy will be terminated. For policies that have a maximum lifetime payout, the limits can go up to $200,000.


    * **Maximum payout per body system **\- This is the maximum amount the insurance company will reimburse for a body system. Examples of body systems include: digestive system, musculoskeletal system, and nervous system. Once you hit that limit for a body system, you will not receive any more money for any injury or illness that relates to that body system.


    * **Maximum payout based on a schedule of benefits - **This is the maximum amount the insurance company will reimburse, based on a listing of allowances for health conditions. For example, the schedule might have a maximum allowance for asthma of $500. That's the maximum payout you'd be eligible for, per year, for any expenses related to your pet's asthma.

A word of caution here: we don't recommend policies that have a maximum payout per body system or based on a schedule of benefits. We think these types of limits shortchange pet owners. They're also confusing, so it's difficult to understand what you're buying (which often leads to unhappy pet owners when they file a claim). We're also not fans of policies with maximum payouts per incident. An incident could be a single life-threatening event (e.g., cancer or a car accident) that requires expensive, lifesaving care. A per-incident limit is typically lower than an annual or lifetime limit…so the per-incident limit might actually defeat the purpose of pet insurance, which is to allow you to make decisions about lifesaving care without worrying about the cost.

On the other types of payout limits - annual and lifetime - we think they're totally fine as long as they're high enough to cover a worst case scenario (which can run upwards of $20,000 for certain conditions). There are also plans with no limits on payouts. These plans provide the greatest peace of mind (and are still reasonably priced).