Pet Insurance Terms and Definitions

Understanding pet insurance can feel overwhelming with all the lingo and jargon. This guide breaks down the most common words and phrases you’ll encounter, helping you make informed decisions about your pet’s coverage.

Common Terms in Pet Insurance

Here’s a list of the most common words and phrases you might see during your pet insurance search or when reviewing your policy.

A

Accident and Illness Pet Insurance Coverage: This is a popular, base-level type of pet health insurance plan. Veterinary treatment for unexpected medical conditions and injuries falls under this type of coverage. Accident-only pet insurance coverage only covers accidents like broken bones, cuts, ingestion of foreign substances, and poisoning.

Adverse Selection: This is when people buy pet insurance only after their pet gets sick or injured. To avoid this, insurers use waiting periods and exclusions for pre-existing conditions.

Age Restrictions: Pet insurance has age limits. Most times, a pet younger than 6–8 weeks or older than 10–12 years cannot be enrolled in pet insurance.

Alternative Therapy or Alternative Treatment: Pets can develop chronic conditions, just like people. Many vets now use alternative therapies to help. Some pet insurance plans, like Fetch, cover these treatments automatically, while others, like Trupanion, offer them as add-ons.

American Animal Hospital Association (AAHA): AAHA stands for the American Animal Hospital Association. It sets standards of veterinary care and gives accreditation to top veterinary clinics in the U.S. and Canada. AAHA-accredited hospitals meet strict care guidelines and often offer advanced treatments like surgery or cancer care.

Annual Deductible: A deductible is what you pay before insurance starts covering costs. An annual deductible means that you must meet it each year of your policy before insurance kicks in. This is different from a per-incident deductible (a deductible that you pay each time you file a claim).

Annual Limit or Annual Maximum: The annual limit is the most your pet insurance will pay in a year. Some plans use a calendar year, others start from your enrollment date. Some also have per-incident limits instead. In general, a higher limit means better coverage.

B

Benefits: The specific veterinary services and treatments that are covered by a pet insurance policy.

Benefit Schedule: A benefit schedule lists set payout amounts for specific conditions or treatments. Instead of paying a percentage of your vet bill, the insurer pays a fixed amount. This type of plan is less common in pet insurance.

Bilateral Condition or Bilateral Exclusion: A bilateral condition affects both sides of your pet’s body, like hip or knee problems. Many insurers treat the second side as a pre-existing condition, so they may not cover it if the first side had issues before.

Breed Exclusions: Conditions or treatments that an insurer excludes based on a pet’s breed due to increased risk.

Breed-Specific Condition: A health issue commonly found in certain breeds due to genetics or anatomy.

Behavioral Problems: Mental or emotional issues in pets, like anxiety or aggression, which insurers may or may not cover.

C

Chronic Condition: A chronic condition is a long-term illness that often lasts for life and can be costly to treat. If your pet receives a diagnosis before enrolling, insurers usually treat it as a pre-existing condition, and they won’t cover it.

Claims: A pet insurance claim is a request for reimbursement after your pet gets vet care. You submit a claim form and vet bill, and the insurer reviews it to see what they can cover. If approved, they’ll pay you based on your coverage, deductible, and reimbursement rate.

Claims Adjuster: A claims adjuster reviews your pet insurance claim to decide the details of coverage and reimbursement. It works a lot like auto or home insurance—you file a claim, and they send you a check if the expenses are eligible for coverage.

Clinical Signs: Clinical signs are visible changes in your pet’s health or behavior. If these signs show up before you enroll, insurers usually treat them as pre-existing conditions and don’t cover them. That’s why it’s best to get insurance while your pet is still healthy before they show clinical signs.

Co-Insurance: Co-insurance is the percentage of covered costs you pay after meeting your deductible (e.g., 20%).

Complementary Treatment: A term used to describe “holistic” or “alternative” treatments and therapies that an insurer may cover.

Congenital Condition: A congenital condition is a health issue present at birth or early in life.

Continuous Coverage: Continuous coverage means your pet stays insured without gaps between policy periods—even if they get sick. Most companies guarantee coverage for life, no matter how many claims you file. Be sure to check how each insurer handles this before choosing a plan.

Covered Expenses: Covered expenses are the veterinary costs that your pet insurance policy agrees to pay for, according to the terms of your plan.

Cruciate Ligament: Cruciate ligaments are in the knee and help keep it stable. The most common injury in pets is a torn ACL, which often requires surgery. According to Lemonade Pet Insurance, ACL surgery for dogs can cost about $1,500 to $10,000. This number can depend on your pet and location.

D

Deductible: A deductible is the amount you pay out of pocket before insurance pays. Most plans use either an annual deductible (you pay once per year) or a per-incident deductible (you pay separately for each new illness or injury). You typically won’t see both in the same plan. Annual deductibles usually range from $100 to $500, and choosing a higher deductible often means lower monthly premiums. Be sure to check which type of deductible a plan uses before enrolling.

Diagnostics: Tests and procedures used to identify a pet’s health condition, such as blood work or X-rays.

Direct Vet Pay: Direct Vet Pay (also called Vet Direct Pay) is a payment option where the pet insurance company pays your veterinarian directly, so you don’t have to pay the full bill upfront and wait for reimbursement. Not all veterinary clinics accept this option, so it's important to check in advance. Some pet insurance companies that offer Direct Vet Pay include Healthy Paws, Pets Best, and Prudent Pet.

E

Effective Date: The effective date is when your pet’s insurance coverage starts. After enrolling, there’s a waiting period before coverage begins. Coverage does not start on the enrollment day, so it’s important to know the effective date.

Elective Procedure: These are non-essential treatments or surgeries that are usually not covered by insurance.

Emergency Vet: An emergency vet hospital handles serious accidents and health issues that your regular vet can’t. They have advanced equipment like X-rays and surgical tools. Treatment can be expensive and can range from a couple of hundred dollars to thousands. For claims filed by Pumpkin Pet Insurance parents between February 2022 and February 2025, the average emergency vet bill for dogs costs $653, and for cats, it is $919.

Enrollment Date: The enrollment date is when you buy your pet insurance. It starts the waiting period before coverage begins on the effective date. Different conditions may have different waiting times.

Exotic Pet: These are pets other than cats and dogs, like birds, reptiles, or small mammals. Some insurers offer exotic pet insurance.

Explanation of Benefits: A document from the insurer that details how a claim was processed and what was paid.

G

Guaranteed Renewable: A guaranteed renewable policy means you can renew your pet’s insurance every year, no matter their age or health. This ensures your pet’s coverage continues without interruption. Not all insurers or plans offer guaranteed renewability, so it’s important to check before enrolling.

H

Hereditary Condition or Hereditary Disorder: A hereditary disorder is a condition passed from a pet’s parents. For example, hip dysplasia is a common hereditary condition in larger dog breeds like Golden Retrievers. It’s different from a congenital condition, which appears at birth.

Holistic Treatment or Holistic Therapy: Another way to describe “alternative treatment” or “alternative therapy.” Alternative medical treatments focusing on the whole pet’s well-being, such as acupuncture or chiropractic care. Some pet insurance plans cover these treatments automatically, while others offer them as add-ons or don’t cover them at all.

I

Incident: An incident is each separate accident or illness your pet has during the policy. For example, a broken leg and swallowing a sock are two incidents. Some insurers charge a deductible per incident, while others use an annual deductible. Some also limit how much they pay per incident.

Invoice: A bill from the veterinarian listing services provided and the amount owed.

L

Lifetime Limit: The maximum total amount an insurance policy will pay over a pet’s lifetime.

Loss Ratio: A loss ratio is a percentage that shows how much an insurance company pays in claims compared to the money it collects in premiums. For example, paying $55 million in claims from $100 million in premiums is a 55% loss ratio.

M

Maximum Limit: The maximum limit is the most that a pet insurer will pay for covered claims. This can take a few different forms, such as a per-incident limit (a cap on how much is paid for each specific illness or injury), an annual limit (a cap on the total amount paid in a policy year), or a lifetime limit (a cap on total payouts over your pet’s lifetime). Not all policies include every type of limit, so be sure to check the details before enrolling to avoid unexpected out-of-pocket costs.

Medically Necessary: Treatments or procedures required to diagnose or treat an illness or injury.

N

Neuter: A surgical procedure to remove a male pet’s reproductive organs to prevent breeding.

O

Onset: The time when symptoms of a condition first appear.

Orthopedic Condition: An orthopedic condition affects bones, muscles, joints, or ligaments. Most pet insurers have a 6–12 month waiting period for these conditions to prevent late sign-ups. You can often reduce this wait by submitting a healthy orthopedic exam after enrolling.

Orthopedic Exam: An orthopedic exam is a vet check of your pet’s joints and bones. If your pet is healthy, this exam can reduce the waiting period for orthopedic coverage from 6–12 months to just 14 days. Not all insurers offer this, so check before enrolling.

P

Per Incident Deductible: A per-incident deductible means you pay a set amount each time your pet has a new injury or illness. For example, with a $200 deductible, you pay $200 for each claim. Most plans have an annual deductible, where you pay once per year, no matter how many claims you make. Trupanion offers a lifetime per-incident deductible, meaning the policyholder only pays the deductible once for each specific condition, not annually. In general, higher deductibles usually mean lower premiums.

Per Incident Limit: A per-incident limit is the most your insurer will pay for each separate injury or illness. For example, with a $5,000 limit, they’ll pay up to $5,000 for one surgery. Some companies use annual limits instead, capping total payments for the year. Always check limits before buying a policy to avoid surprises.

Pet Hospital: A pet hospital is like a hospital for people, but instead, it’s for pets.

Pet Insurance Policy: A pet insurance policy helps pay vet bills if your dog or cat gets sick or injured, just like auto or home insurance covers unexpected events. Most plans cover 80–90% of costs. Policies have key sections that explain what’s covered and what’s not.

Pet Medications: Pet medication coverage refers to how a pet insurance policy handles the cost of prescription drugs. Coverage varies by insurer, so it’s important to check what’s included.

Policy Conditions: Policy conditions are rules in a pet insurance contract that must be followed for claims to be paid. They may include things like submitting proof of loss on time or cooperating during a claims review. If these conditions aren’t met, the insurer can deny or reduce payment.

Policy Declarations: The declarations page (or declarations section) is the first part of a pet insurance policy that summarizes key details. It includes information like your pet’s name, coverage limits, reimbursement rate, deductible, premium, and policy period.

Policy Exclusions: An exclusion refers to any condition or service not covered by a pet insurance policy. Each company has a list of exclusions, so it’s important to review them before enrolling to understand the extent of coverage.

Policy Insuring Agreement: The insurance agreement is the core part of a pet insurance policy that outlines what’s covered and what’s not. It states the insurance company’s main promises, like paying for covered claims and providing specific services.

Policyholder: The person who owns the pet and enrolls in the pet insurance policy.

Policy Period: The policy period is the 12-month time frame during which a pet insurance policy is active, starting on the effective date.

Pre-Existing Condition: A pre-existing condition is any illness or injury that occurred or showed symptoms before your pet insurance policy started. In most cases, insurers do not cover pre-existing conditions.

Premium: A premium is the amount you pay for pet insurance, usually monthly or annually. It’s based on factors like your pet’s type, age, and location.

Preventative Care Coverage: Also known as a pet wellness plan, this coverage is for routine care that helps prevent illness, like vaccines and dental cleanings. Not all pet insurance companies offer this type of coverage as an add-on to their base coverage, so it’s important to check availability before enrolling.

Q

Quote: An estimated price for a pet insurance plan based on pet and pet parent details.

R

Reimbursement or Reimbursement Rate: A reimbursement rate is the percentage of vet bills the insurance company pays, usually ranging between 60% and 100%. It works with your deductible to determine your claim payout.

Renewal: Policy renewal is when your pet insurance automatically continues at the end of each term. Most renewals happen as long as you pay your premium. Costs may rise over time due to factors like vet fees and your pet’s age.

Rider: An add-on to a pet insurance policy that modifies or adds coverage.

S

SOAP Notes: A method vets use to record patient info, including Subjective, Objective, Assessment, and Plan.

Spay: A surgical procedure to remove a female pet’s reproductive organs to prevent breeding.

T

Telemedicine: Telemedicine (or virtual vet visits) is remote veterinary care that is provided via phone or video consultations.

U

Underwriter: An underwriter evaluates risk and decides if pet insurance will be offered, what coverage to provide, and how much the premium will be.

V

Veterinarian: A veterinarian is a licensed animal doctor who treats pets and other animals. Some focus on general care, while others specialize in certain animals or medical fields like surgery or oncology.

W

Waiting Period: A waiting period is the time between when you enroll and when your pet’s insurance coverage begins (the effective date). Waiting times vary by condition and insurer, from a few days for accidents to several months for orthopedic issues.

Wellness Plans: Also known as preventative care coverage, pet wellness plans cover routine care like exams and vaccinations. They work alongside accident and illness plans to help manage both expected and unexpected vet costs. Not all pet insurance companies offer wellness plans as an add-on to their base coverage, so it’s important to check availability before enrolling.

Get Pet Insurance Today

Now that you’re familiar with common pet insurance terms, you’re better prepared to choose the right plan for your pet. Compare pet insurance companies to find the best plan for your best friend today.

Disclosures

The information provided here is for general educational purposes only and does not constitute insurance advice. Coverage details, exclusions, and terms vary by insurer and state. Mentions of specific companies or plan features are for example purposes only and do not imply endorsement, guarantee of coverage, or availability.