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7 Pet Insurance Terms You Need to Know

Women looking at her dog with book in her hand while learning about affordable pet insurance

Pet health insurance doesn’t have to be a scary world for pet parents, filled with terms that you only understand if you work extensively with the industry. Pet insurance in Canada seems to have its very own language but once you understand the basics, it becomes much less of a minefield to navigate. Understanding the different insurance types and what is or isn’t covered is going to reduce the headache of making a claim and help you sleep better knowing your pet is covered.

The cost of owning a dog or a cat in Canada can be expensive and at a time when inflation means many pet owners are looking to save on their pet costs. We’ve put together some key terms that will make it much easier to navigate the world of pet insurance and find one that really suits you and your pet’s needs.

Policy limit

The policy limit on pet health insurance refers to the maximum amount of annual coverage you are eligible to receive for medically necessary veterinary services required to treat your pet’s illnesses or injuries. Pet insurance policies will always give you an annual figure that is the maximum amount of financial support you can claim for them through the period of a year.

If you take out a policy with a limit of $5,000, this means that every time you make a claim throughout the year, this figure gets lower. For instance, if you make a claim for $1,000 and your pet insurance policy covers 80%, they will have paid $800 and your available annual limit moving forward would now be $4,200. Some affordable pet insurance policies can be much lower than others but it’s important to always review the policy documents of any pet insurance provider you are considering to make sure it is a right fit for you and your pet.


Most pet insurance policies will have a co-insurance (similar to how it operates with human health insurance) which means the amount of cover you are responsible for while your insurer pays the rest of the claim. You will usually be responsible for either a set amount or a percentage. For instance, if your co-insurance covers 20% of each eligible claim and your trip to the vet costs $100 then you will pay the first $20 while the remaining $80 is reimbursed to you. The $80 the insurance company paid is then deducted from your annual policy limit.

You might also see “Reimbursement Options” in lieu of Co-Insurance. Your reimbursement option is the amount that a policy will cover of eligible expenses on a claim after the annual deductible is met. If you select an 80% reimbursement level on your pet insurance plan, you would be responsible for 20% of the remaining eligible costs associated with the treatment of a condition (known as your co-insurance).

Oftentimes, when calculating your reimbursement, the co-insurance is applied first, followed by the deductible, less any excluded costs.


A deductible is a fixed amount that is taken from your claim after your co-insurance amount has been applied. Most policies come with deductible amounts that are applied annually when you make a claim and is deducted from the amount you are reimbursed.

Waiting periods

While your policy effective date is the date your policy comes into effect, with pet health insurance, there are several waiting periods in place that dictate when your coverage becomes available. Different companies require different waiting periods so it is important to read your pet insurance policy carefully.

If there are clinical signs of an illness that your pet needs to be seen by a vet before the expiry of your waiting period, this would then be considered a pre-existing condition.

 Women writing in key pet insurance terms in notebook with cat lying next to her

Photo by Sam Lion on Pexels

Pre-existing condition

A pre-existing condition is anything your pet has previously been treated for by a veterinarian and therefore will not be covered by insurance when you take out a new policy. If clinical signs were present for an illness or injury during a previous examination by a vet, this counts as a pre-existing condition.

Associated conditions

Pre-existing conditions can sometimes feel confusing. Especially when your pet seems to have a different ailment but your pet insurance provider denies coverage for a claim.

Associated conditions are any medical condition or complication arising from another condition for which your pet showed signs or symptoms that are directly related to, and caused by, the primary medical condition. If you conditions previously symptomatic, occurring, diagnosed and/or treated in a prior Policy year, after which, this Condition is no longer eligible for coverage


New-Condition-coverage in pet insurance is unique to PHI Direct and means your insurer will cover each new condition for a specific amount of time.

With PHI Direct, we’ve designed our plans to provide you with reasonable financial insurance coverage for your pet for any accident, any non-pre-existing medical condition and/or any illness for up to a year – depending upon when within the policy year the accident or illness occurred.

With our plans, when that time period of up to a year has expired, coverage for any accidents or new illnesses claimed during the policy year is no longer available.

However, you’ll continue to have coverage – and peace of mind – that your pet is protected against any future accidents or new illnesses that might occur in future policy years.

Offering you pet health insurance through this ‘New-Condition’ coverage approach allows us to continue to provide protection with very affordable premiums year after year over the life of your pet – as long as you remain enrolled.

All of PHI Direct’s policies offer ‘New-Condition’ coverage to help pet owners in Canada have access to affordable pet insurance. Each policy has time-limited coverage of one year before a condition is considered pre-existing.

Hopefully, now that you have more understanding of some of the pet insurance jargon, you’ll be able to find a coverage that’s perfect for you and your pet. For even more information, check out our guide on How to Choose the Right Pet Insurance for You and Your Pet.

Or, get a quote from us here to find out how much it costs to protect your pet with PHI Direct. 

Header Photo by Samson Katt on Pexels