Two features of pet insurance catch many owners out at claim time: the excess and the co-payment. Together they decide how much of a vet bill you pay yourself, and they can be larger than people expect. This guide explains pet insurance excess and co-payments, how they work, and how to choose them sensibly.
What an excess is
An excess is the fixed amount you pay towards a claim before the insurer pays the rest. So if you have a £100 excess and a £600 vet bill, you pay the first £100 and the insurer covers £500, subject to the policy limits. The excess is a standard feature of insurance, designed to share the cost and discourage very small claims. Choosing the excess is part of setting up your policy, and it affects your premium.
How the excess applies
On pet insurance, the excess usually applies per condition, per policy year. That means you pay one excess for each separate condition each year, and on a lifetime policy that resets each year on renewal. So if your pet has an ongoing condition, you typically pay the excess again each year it is treated. Understanding how often the excess applies matters, because several conditions, or several years of treatment, mean paying it more than once.
What a co-payment is
A co-payment, or co-insurance, is a percentage of the claim that you pay on top of the excess. So with a 20 per cent co-payment, after the excess you would still pay a fifth of the remaining bill, with the insurer covering the rest. Co-payments are increasingly common, particularly for older pets, and they can add up on a large bill. They are a key thing to check, as our guide to what is not covered notes.
How excess and co-payment combine
When a policy has both, they stack. Take a £1,000 vet bill with a £100 excess and a 20 per cent co-payment: you pay the £100 excess, then 20 per cent of the remaining £900, which is £180, so £280 in total, with the insurer paying £720. As you can see, a co-payment on a large bill significantly increases your share, so it is important to know whether your policy has one and how big it is.
Why insurers use them
Excesses and co-payments exist to share risk between you and the insurer and to keep premiums affordable. By having you pay part of each claim, insurers reduce their costs and can offer lower premiums than they otherwise would. They also discourage very small claims that cost more to process than they are worth. For older pets especially, a compulsory co-payment helps insurers keep cover available and priced at a level owners can manage.
How they affect your premium
There is a trade-off between your excess and co-payment and your premium. Choosing a higher excess, or accepting a co-payment, lowers your premium, because you are taking on more of each claim yourself. Conversely, a low excess and no co-payment means a higher premium. This lets you tune the policy to your budget, but the saving on the premium has to be weighed against paying more whenever you claim.
Older pets and compulsory co-payments
Many insurers introduce a compulsory co-payment once a pet reaches a certain age, often in addition to any you have chosen. This reflects the higher likelihood and cost of claims for older pets, as our guide to why premiums rise with age explains. So even if your younger pet's policy had no co-payment, one may appear as it ages, increasing your share of each bill in later life.
Choosing an excess you can afford
When setting your excess, choose a level you could comfortably pay at the time of a claim. A high excess lowers your premium, but if it is more than you could readily find, it could leave you unable to afford treatment when you need to claim, defeating the purpose. Balancing a manageable excess against an affordable premium is the aim, so the cover actually works for you when it matters.
Check before you buy
Before buying a policy, check both the excess and any co-payment, including how the excess applies and whether a co-payment kicks in with age. Two policies at similar premiums can leave you paying very different amounts at claim time once these are taken into account. Reading the detail, as our guide to making a claim also stresses, ensures you understand exactly what you would pay before you ever need to claim.
The excess and the type of cover
How the excess works depends partly on the type of cover. On a lifetime policy, where the limit refreshes each year, the excess typically applies again each policy year for an ongoing condition, so a long-term illness means paying the excess annually for as long as it is treated. On time-limited or maximum benefit cover, the excess applies for the period or until the cap is reached. Knowing this helps you anticipate your real costs over time, not just for a single claim.
Voluntary and compulsory elements
Sometimes part of the excess or co-payment is compulsory, set by the insurer, and part is voluntary, chosen by you to reduce the premium. The compulsory element you cannot avoid, while the voluntary part is a lever you control. For older pets in particular, a compulsory co-payment may be added regardless of your choices. Reading which parts are fixed and which you have chosen helps you understand both your premium and what you would pay on a claim.
Watch for changes at renewal
Your excess and co-payment can change at renewal, particularly as your pet ages and a compulsory co-payment is introduced or increased. It is worth checking your renewal documents each year rather than assuming the terms are unchanged, because a new co-payment can noticeably increase your share of future bills. If the terms change in a way you are unhappy with, that is the moment to review your options, mindful of the risks of switching.
The simplest rule is to check both the excess and any co-payment before you buy, and to choose an excess you could readily find at the moment you needed to claim, so the cover actually works when you call on it.
In short
An excess is the fixed amount you pay towards each claim, usually per condition per year, while a co-payment is a percentage of the remaining bill you also pay, common for older pets. Together they decide your share of a vet bill, and on a large claim a co-payment in particular can be significant. Higher excess and co-payment lower your premium, so choose levels you could comfortably afford at claim time.
Where to get help and next steps
Read pet insurance explained for the basics, see what pet insurance does not cover, and learn how to make a claim. This is general information, not financial advice.