What is an Excess in Pet Insurance? (Simple Guide)

What Does “Excess” Mean in Pet Insurance?

An excess (sometimes called a deductible) is the amount you agree to pay out of your own pocket each time you make a claim on your pet insurance. It’s the portion of the vet bill you cover before your insurer pays their share.

For example, if your dog needs $2,000 surgery and you have a $200 excess with 80% benefit, you pay $200 excess plus 20% of the remaining $1,800 ($360). Your insurer pays $1,440. Your total out-of-pocket cost is $560 instead of $2,000.

Types of Excess in Australia

Australian pet insurers use different excess structures. Understanding which type your policy uses is critical:

Per-Claim Excess

You pay the excess amount every time you make a claim. If your dog visits the vet three times in a year for different conditions, you pay the excess three times. This is the most common type in Australia.

Per-Condition Excess

You pay the excess once per condition per year (or per policy period). If your cat needs four visits for the same ear infection, you only pay the excess on the first visit. Subsequent claims for the same condition in that policy year have no excess.

Annual Excess

You pay the excess once per year, regardless of how many claims you make. After your first claim hits the excess, all remaining claims that year have zero excess. This is less common but very favourable for pets needing frequent treatment.

How Choosing a Higher Excess Lowers Premiums

There’s a direct trade-off between your excess amount and your monthly premium. The higher the excess you’re willing to pay per claim, the lower your ongoing premium will be. Here’s a real-world example for a 2-year-old Labrador on comprehensive cover:

• $0 excess: ~$75/month ($900/year)
• $100 excess: ~$60/month ($720/year)
• $200 excess: ~$50/month ($600/year)
• $300 excess: ~$44/month ($528/year)
• $500 excess: ~$38/month ($456/year)

The difference between $0 and $200 excess is roughly $25/month or $300/year in premium savings. If you make one claim per year, you pay $200 excess but save $300 in premiums — a net saving of $100.

Typical Excess Ranges

Across Australian pet insurers, excess options typically range from $0 to $500:

• $0 excess: No out-of-pocket per claim. Highest premiums. Good for pets with frequent health issues.
• $50 – $100 excess: Small contribution per claim. Slightly lower premiums. A popular middle ground.
• $200 excess: The most common default option. Balances premium savings with manageable out-of-pocket costs.
• $300 – $500 excess: Significant premium savings. Best suited for healthy pets where you only expect to claim for major incidents.

Calculator Example: Which Excess Saves You More?

Let’s compare two scenarios over 5 years for a dog that averages one significant claim per year:

Scenario A: $0 Excess

• Monthly premium: $75
• Annual premium cost: $900
• 5-year premium total: $4,500
• Excess paid over 5 claims: $0
• Total 5-year cost: $4,500

Scenario B: $200 Excess

• Monthly premium: $50
• Annual premium cost: $600
• 5-year premium total: $3,000
• Excess paid over 5 claims: $1,000
• Total 5-year cost: $4,000

In this example, the $200 excess saves you $500 over five years. However, if your pet needs three claims in one year, the $0 excess option becomes more cost-effective for that year.

When to Choose a High Excess

A higher excess ($200-$500) makes sense when:

• Your pet is young and healthy with no ongoing conditions
• You want the lowest possible monthly premium
• You have savings to cover the excess when needed
• You primarily want insurance for major, infrequent events

When to Choose a Low or Zero Excess

A lower excess ($0-$100) makes sense when:

• Your pet has a breed predisposed to frequent health issues
• You expect to claim multiple times per year
• You want to minimise all out-of-pocket costs at claim time
• Your pet is older and more likely to need regular treatment

Tips for Choosing the Right Excess

1. Check the excess type: Per-claim, per-condition, or annual makes a big difference
2. Run the numbers: Calculate total annual cost (premiums + likely excess payments) for each option
3. Consider your breed: Breeds prone to chronic conditions may benefit from lower excess
4. Think about cash flow: Can you comfortably pay $500 at the vet if you need to?
5. Review annually: You can often adjust your excess at renewal time

Frequently Asked Questions

Can I change my excess after I’ve taken out a policy?

Most Australian insurers let you adjust your excess at renewal time. Increasing your excess will lower your premium, and decreasing it will raise your premium. Changes usually take effect from the next policy period.

Do I pay the excess before or after the vet visit?

You pay your full vet bill upfront, then submit a claim to your insurer. The insurer deducts the excess from the claim reimbursement. So if your bill is $1,500 with a $200 excess and 80% benefit, you receive $1,040 back ($1,500 minus $200 = $1,300 x 80%).

Is the excess applied before or after the benefit percentage?

This varies by insurer. Some deduct the excess first, then apply the benefit percentage. Others apply the benefit percentage to the full amount, then deduct the excess. Check your policy’s PDS for the exact calculation method.

Does the excess apply to every vet visit?

It depends on your excess type. With per-claim excess, yes — each separate claim incurs an excess. With per-condition excess, you pay once per condition per year. With annual excess, you pay once per year total. Most Australian policies use per-claim excess.