Insurance guide, not financial advice. Prices and policy terms come from public sources and change often, so check the details of your own policy. Last reviewed September 30, 2026. How we research
In this guide
- Quick answer
- The three numbers you choose: deductible, reimbursement and limit
- What’s covered, what isn’t, and when coverage starts
- Types of pet insurance
- How much pet insurance costs, and why premiums rise
- Filing a claim and getting paid
- Choosing your settings: what real bills would cost you
- The bottom line
- Frequently asked questions
- How we researched this
- Sources
Quick answer
Most pet insurance works by reimbursement: you pay the vet, send the invoice to your insurer, and it pays you back a percentage of the covered costs after your deductible, up to an annual limit. You choose all three numbers when you buy the policy. Together they set your monthly premium and how much you’ll pay when something goes wrong. In 2025 the average U.S. accident-and-illness policy cost $836 a year for a dog and $435 for a cat.
How a claim works, in four steps:
- Your pet gets care. You pay the vet bill at checkout, unless your hospital bills the insurer directly.
- You file a claim with the invoice, usually through an app or website.
- The insurer reviews it. It removes anything not covered, such as pre-existing conditions or, on many plans, exam fees.
- You’re paid back the reimbursement percentage, minus any deductible you haven’t met yet.
Example: a $3,000 covered bill on a policy with a $250 annual deductible and 80% reimbursement.
| Step | Amount |
|---|---|
| Covered bill | $3,000 |
| 80% reimbursement | $2,400 |
| Minus the $250 deductible | −$250 |
| Insurer pays you | $2,150 |
| You pay | $850 |
Math as Healthy Paws and Lemonade describe it: percentage first, then the deductible. Sources: Healthy Paws; Lemonade; NAPHIA State of the Industry 2026.
The details that change the result — how the deductible is applied, what’s excluded and how long you wait for coverage — are covered below. Each setting also has its own guide: pet insurance deductibles, reimbursement rates (70%, 80% or 90%) and annual limits vs. unlimited coverage.
The three numbers you choose: deductible, reimbursement and limit
Every policy is built from three settings, and each one trades a lower premium for more out-of-pocket cost when you claim.
| Setting | What it means | Typical options | Examples |
|---|---|---|---|
| Deductible | What you pay before the insurer starts paying | $100–$1,000 | Lemonade: $100, $250, $500 or $750 a year; Trupanion: $0–$1,000 per condition |
| Reimbursement rate | The share of covered costs the insurer pays | 70%, 80% or 90% | Lemonade: 70%, 80%, 90%; Trupanion: 90% |
| Annual limit | The most the insurer pays in a policy year | $5,000 to unlimited | Lemonade: $5,000–$100,000; Healthy Paws: $5,000, $7,000 or unlimited; Trupanion: no annual or lifetime limit |
Sources: Lemonade; Healthy Paws; Trupanion; checked September 2026.
When the deductible resets
An annual deductible resets every policy year; a per-condition deductible is paid once for each condition, for your pet’s lifetime. Healthy Paws, Lemonade and Embrace use annual deductibles. Trupanion uses a per-condition deductible: once it’s met for, say, diabetes, future diabetes costs have no deductible. A per-condition deductible suits pets with one long-term illness. An annual deductible suits pets with several unrelated problems in the same year. Our guide to annual vs. per-condition deductibles compares the options at each major insurer.
The order of the math matters
Healthy Paws and Lemonade apply the reimbursement percentage first and then subtract the deductible. Some quotes and calculators do it the other way round, which makes the payout look slightly bigger. The gap equals the deductible times the share you pay:
| $3,000 bill, $250 deductible, 80% | Percentage first | Deductible first |
|---|---|---|
| Insurer pays | $2,150 | $2,200 |
| You pay | $850 | $800 |
Ask your insurer which method it uses, or check the claim example in its policy documents.
How the settings change a $3,000 bill
| Deductible | Reimbursement | Insurer pays | You pay |
|---|---|---|---|
| $100 | 90% | $2,600 | $400 |
| $250 | 80% | $2,150 | $850 |
| $500 | 80% | $1,900 | $1,100 |
| $500 | 70% | $1,600 | $1,400 |
| $750 | 70% | $1,350 | $1,650 |
Our calculations, percentage first, on a fully covered bill within the annual limit.
Don’t choose the annual limit lightly. Healthy Paws says the limit you pick at enrollment can never be raised later. A single bad year can exceed $5,000: Trupanion lists a real claim of $8,294 for a fever and pneumonia that needed emergency surgery and hospitalization.
What’s covered, what isn’t, and when coverage starts
A standard accident-and-illness policy pays for diagnosing and treating new injuries and illnesses. It doesn’t pay for pre-existing conditions, routine care or, on many plans, the exam fee.
| Usually covered | Often excluded or add-on only |
|---|---|
| Emergency care and hospitalization | Pre-existing conditions |
| Surgery, such as TPLO or foreign body removal | Exam and office-visit fees (Healthy Paws, Trupanion; add-on at Lemonade and Embrace) |
| Diagnostics: X-rays, ultrasound, MRI, blood work | Wellness and preventive care (vaccines, checkups, routine dental cleaning) |
| Prescription medication | Euthanasia and aftercare (Healthy Paws) |
| Hereditary and chronic conditions that start after coverage | Anything during the waiting period |
Sources: Healthy Paws FAQ; Trupanion; Lemonade; Embrace. Coverage varies by insurer and plan.
Pre-existing conditions
A pre-existing condition is anything your pet showed signs of, was treated for or got veterinary advice about before coverage started or during the waiting period. That’s the definition in the NAIC Pet Insurance Model Act, the template for pet insurance laws in a growing number of states. Once a condition is covered, it can’t become pre-existing when the policy renews. Embrace notes that symptoms showing up during the waiting period make that condition pre-existing. That’s why it pays to insure a pet while it’s young and healthy. See our full guide to pre-existing conditions.
Waiting periods
| Insurer | Accidents | Illnesses | Orthopedic |
|---|---|---|---|
| Trupanion | 5 days | 30 days | Same as illness |
| Healthy Paws | 15 days (none in some states) | 15 days | Hip dysplasia: 12 months (30 days in some states) |
| Embrace | See policy | 14 days | Dogs only; varies by state |
| Lemonade | See policy | 14 days | 30 days |
Sources: each insurer’s own FAQ or help pages, checked September 2026. Aggregator tables often differ, so trust the insurer’s policy.
The Model Act caps waiting periods at 30 days, bans them for accidents and lets them be waived after a vet exam. Only states that have adopted it are bound by it. Healthy Paws, for example, uses shorter or waivable waiting periods in 16 states, including California, Florida, Maryland, Ohio, Pennsylvania and Washington. See our guide to waiting periods.
Types of pet insurance
Accident-and-illness coverage is the main type. Accident-only plans cost far less but skip illness entirely. Wellness add-ons pay for routine care and aren’t insurance at all.
| Type | What it covers | Average annual premium, 2025 (dog / cat) |
|---|---|---|
| Accident-only | Injuries such as fractures, bite wounds and swallowed objects | $190 / $112 |
| Accident and illness | Injuries plus illnesses such as cancer, diabetes and infections | $836 / $435 |
| Insurance with wellness built in | The above plus routine care | $1,414 / $859 |
Source: NAPHIA State of the Industry Report 2026 (U.S. data for 2025).
Wellness plans are budgeting tools, not insurance. Under the NAIC Model Act, insurers can’t market a wellness program as insurance or require you to buy one to get coverage, and its cost must be listed separately. Wellness plans pay fixed amounts for vaccines, checkups and similar routine care. Whether one is worth it depends on whether the plan costs less than the routine care you’d buy anyway.
Accident-only plans suit tight budgets and young, healthy pets, but they won’t help with the conditions behind many large bills, such as cancer, bloat or kidney disease. Compare them in our guide to accident-only vs. accident-and-illness coverage.
How much pet insurance costs, and why premiums rise
The average U.S. accident-and-illness policy cost $836 a year (about $70 a month) for a dog and $435 a year (about $36 a month) for a cat in 2025. Only 4.27% of U.S. pets were insured that year: 5.99% of dogs and 2.29% of cats.
| What sets your premium | Effect |
|---|---|
| Species | Cats usually cost less to insure than dogs |
| Age | Older pets cost more, and premiums typically rise as your pet ages |
| Breed | Breeds prone to hereditary problems cost more |
| Where you live | Areas with pricier vet care have higher premiums |
| Deductible | A higher deductible lowers the premium |
| Reimbursement rate | 90% costs more than 70% |
| Annual limit | A higher limit costs more |
Sources: NAPHIA State of the Industry Report 2026; Lemonade.
For scale, Lemonade says its dog owners pay around $48 a month and cat owners around $27, with base policies from $10 a month. Its example of a 4-year-old Goldendoodle in Chicago comes to about $61 a month. Your quote depends on the settings above, so compare quotes with the same deductible, reimbursement rate and limit.
Budget for increases. Premiums typically rise as pets get older, so a price that looks cheap for a puppy will be higher at age 8. When you compare insurers, ask how their prices change with age. For the other reasons a renewal price jumps, see why pet insurance goes up.
Filing a claim and getting paid
Most insurers pay you back after you’ve paid the vet, so you still need cash or credit for the bill itself. A few can pay the hospital directly at checkout.
| Insurer | How you’re paid | How fast |
|---|---|---|
| Trupanion | VetDirect Pay: Trupanion pays its share at checkout at participating hospitals; otherwise you claim and are reimbursed | Instant at checkout with VetDirect Pay |
| Healthy Paws | You pay the vet, then claim | On average within 2 business days of approval |
| Lemonade | You pay the vet, then claim in the app | Half of eligible claims paid instantly; the rest typically within 5 days |
Sources: Trupanion; Healthy Paws FAQ; Lemonade FAQ, checked September 2026.
To get paid without delays:
- Ask for an itemized invoice, with each test, drug and procedure listed.
- Keep past vet records handy. Insurers may ask for your pet’s history to check for pre-existing conditions, especially on a first claim.
- File soon after the visit, and check your policy for any claim deadline.
- Ask about direct billing if a large bill is coming. Some emergency hospitals, BluePearl among them, bill Trupanion directly.
If you change your mind after buying, states that adopted the NAIC Model Act give you at least 15 days to return the policy for a refund, as long as you haven’t filed a claim.
Choosing your settings: what real bills would cost you
A low deductible and high reimbursement cost more each month but protect you best against a big bill. Here’s what you’d pay out of pocket on four typical bills under three common setups.
| Bill | $100 deductible, 90% | $250 deductible, 80% | $500 deductible, 70% |
|---|---|---|---|
| Overnight ER stay for vomiting, $1,536 | $254 | $557 | $961 |
| Foreign body surgery, $4,383 | $538 | $1,127 | $1,815 |
| TPLO knee surgery, $5,000 | $600 | $1,250 | $2,000 |
| Bloat emergency with 3 days of ICU, $7,725 | $873 | $1,795 | $2,818 |
Bills from our guides to emergency vet costs, foreign body surgery, TPLO surgery and bloat surgery. Our calculations, percentage first, assuming everything is covered and the deductible hasn’t been met that year.
The annual limit matters on the biggest bills. With a $5,000 limit, the $7,725 bloat bill leaves you paying about $2,725 even at 90% reimbursement, because the insurer stops at $5,000.
A simple way to choose:
- Pick the deductible you could pay tomorrow without borrowing.
- Choose 80% or 90% reimbursement if a $5,000 bill would force you onto a credit card.
- Choose an unlimited or high annual limit for large dogs, breeds with known problems and pets that may need surgery. Some insurers don’t let you raise it later.
- Check the exclusions before the price: exam fees, the orthopedic waiting period and how bilateral conditions (such as both knees) are handled.
Then compare the yearly premium against the out-of-pocket numbers above. If you’d rather save the premium and self-insure, see is pet insurance worth it.
The bottom line
Pet insurance is a reimbursement deal: you pay the vet, and the insurer pays back a share of covered costs after your deductible, up to your limit. Buy while your pet is young and healthy so fewer conditions count as pre-existing. Choose settings you could live with on a $5,000 bill. Read the exclusions (exam fees, waiting periods, orthopedic rules) before comparing prices. A dog policy averaged $836 a year in 2025, which is less than one mid-sized emergency.
Frequently asked questions
How does a pet insurance deductible work?
It’s the amount you pay before the insurer starts paying. Many plans, including Healthy Paws, Lemonade and Embrace, use an annual deductible that resets each policy year; Trupanion uses a per-condition deductible you pay once per condition for your pet’s lifetime. Healthy Paws and Lemonade apply your reimbursement rate first and then subtract the deductible.
What does 80% reimbursement mean?
The insurer pays 80% of covered costs and you pay the other 20%, plus your deductible. On a $3,000 covered bill with a $250 deductible, that’s $2,150 back and $850 out of pocket.
Does pet insurance pay the vet directly?
Usually not; you pay the vet and get reimbursed. Trupanion’s VetDirect Pay can pay its share at checkout at participating hospitals.
Does pet insurance cover pre-existing conditions?
No. Anything your pet showed signs of, was treated for or got advice about before coverage started, or during the waiting period, is excluded. A condition covered on your policy can’t become pre-existing at renewal.
How long is the waiting period for pet insurance?
It depends on the insurer: illness waiting periods run about 14 to 30 days, and accidents from none to 15 days. Orthopedic conditions can have longer waits, such as Healthy Paws’ 12 months for hip dysplasia in most states.
How much is pet insurance a month?
In 2025, the average U.S. accident-and-illness policy cost about $70 a month for a dog and $36 for a cat. Accident-only plans averaged $190 a year for dogs and $112 for cats.
Does pet insurance cover vet exam fees?
Not always. Healthy Paws and Trupanion exclude exam fees, while Lemonade and Embrace offer them as an add-on.
How we researched this
We took each insurer’s terms from its own FAQ, help pages or policy examples (Healthy Paws, Lemonade, Trupanion, Embrace) and checked them in September 2026. Where comparison sites disagreed with an insurer’s own page, we used the insurer’s. Average premiums and insurance rates come from the North American Pet Health Insurance Association’s 2026 State of the Industry report, covering 2025. Rules on pre-existing conditions, waiting periods and the free-look period come from the NAIC Pet Insurance Model Act. All payout examples are our own calculations. Terms vary by state and change often, so read your policy’s sample documents before you buy.
Sources
- NAPHIA: State of the Industry Report 2026 highlights
- NAIC: Pet Insurance Model Act
- Healthy Paws: Frequently asked questions
- Healthy Paws: Claim reimbursement examples
- Lemonade: Pet insurance deductibles
- Lemonade: Pet insurance cost
- Lemonade: Pet insurance FAQ
- Trupanion: How deductibles work
- Trupanion: Dog insurance
- Trupanion: When coverage begins
- Trupanion: Actual claims and vet cost examples
- Embrace: What waiting periods does Embrace have?
- Embrace: How does pet insurance work?