Pet insurance can feel simple right up until you hit words like excess, benefit percentage, and annual limit. Then suddenly it feels like you need a translator.
If you have ever looked at a policy and thought, “Okay… but what am I actually paying when I make a claim?” you are not alone.
Excess is one of the most commonly misunderstood parts of pet insurance, but once you understand it, it is actually pretty straightforward. So, let’s break it down.
An excess is the amount you agree to contribute towards eligible vet bills when you make a claim. Rather than coming off the vet bill itself, your excess is deducted at the end of the calculation, after your benefit percentage has already been applied. For example, if your policy has a $250 excess, that means once we’ve worked out your benefit amount, we deduct $250 from it before paying you. It is not an extra fee or surprise charge. It is simply part of how many insurance policies are structured.
It is a fair question. Excesses help keep insurance practical and sustainable by sharing costs between pet parents and insurers. They also help reduce claims for very small expenses that may cost less than, or close to, the excess itself.
In simple terms, an excess means insurance is generally there to help with the bigger, more unexpected costs, rather than every small routine expense. That is often when cover matters most anyway.
Let’s say your dog injures their leg at the park and needs treatment costing $2,000. Your policy includes:
Here is how that may work:
First, we work out 80% of the $2,000 eligible bill = $1,600.
Then, your $250 excess is deducted from that amount: $1,600 − $250 = $1,350.
That means:
Insurer pays $1,350
You pay $650 in total (the $400 not covered by your benefit percentage, plus your $250 excess)
This is why excess is only one part of the picture. Your benefit percentage is applied to the full eligible claim first, and your excess is deducted from the result — so your out-of-pocket cost is shaped by both.
Your annual excess is the amount you contribute per policy period, and it's applied to each claim within that period until it's fully paid — once you've reached it, no further excess applies for the rest of that period. It resets when you renew your policy. Note: the annual excess does not apply to Routine Care items. That is why it is worth checking how your specific policy works, especially if you are comparing cover options.
The key takeaway? Do not just compare premiums. Compare how claims actually work too. A lower premium can sometimes come with a higher excess, which may mean paying more when you need to claim.
Often, yes. Generally, choosing a higher excess can reduce your premium because you are agreeing to contribute more if something happens. Choosing a lower excess may increase your premium, but it could reduce your upfront cost at claim time. Neither option is automatically better. It really comes down to what feels manageable for your budget.
Some pet parents prefer lower monthly premiums and are comfortable covering a higher excess if needed. Others prefer paying more regularly for lower claim-time costs.
Both approaches can make sense.
There is no universal right answer, but a helpful question to ask yourself is this: If my pet needed urgent treatment tomorrow, how much could I comfortably contribute upfront? That answer can help guide your decision.
Try to think beyond monthly premiums and consider real-life claim scenarios too. Because when your dog swallows a sock, or your cat suddenly stops eating, the last thing you want is confusion about costs.
Here is the simplest way to think about it. When you claim, your out-of-pocket cost may include:
Once you understand those three moving parts, pet insurance becomes much easier to navigate. And that is really the goal — not to memorise insurance jargon, but to feel confident enough to understand what cover could look like when you actually need it.
1. What is excess in pet insurance?
Excess is the amount you contribute towards your claim each policy period. It's deducted from your calculated claim benefit — after your benefit limit (where applicable), Booster Care limit (where applicable) and benefit percentage have already been applied, based on your policy's terms.
2. Do you pay excess every time you claim?
Your annual excess applies per policy period, and is applied to each claim within that period until it's fully paid — after which no further excess applies for the rest of that period. Always check your Product Disclosure Statement (PDS) for details.
3. Is excess the same as a premium?
No. Your premium is the regular amount you pay to maintain your policy, usually monthly or annually. Excess is what you may need to pay when you make a claim. With an annual excess, once your chosen excess amount has been paid in full, you won’t pay an excess again for the rest of that policy period.
4. Does a higher excess lower pet insurance premiums?
In many cases, yes. Choosing a higher excess can reduce your premium because you are agreeing to contribute more towards eligible claim costs if your pet needs treatment.
5. What happens after I pay the excess?
Once we've worked out your benefit amount using your benefit percentage, your excess is deducted from that figure — the result is what's paid to you.
6. What other costs might I pay when claiming pet insurance?
In addition to excess, you may also pay the portion not covered by your benefit percentage and any costs that fall outside your policy cover.
7. How do I choose the right excess for my pet insurance?
A good approach is to consider how much you could comfortably pay upfront if your pet needed urgent treatment. The right excess depends on your budget and financial preferences.
8. Why does pet insurance have an excess?
Excess helps share costs between pet parents and insurers and supports the sustainability of insurance by reducing claims for smaller expenses.