Pet insurance glossary: the terms in policies and rate filings

Here are the English terms you meet in pet insurance policies, disclosure documents and rate filings, in alphabetical order. These guides show how they work in practice: how pet insurance works, what is in a policy, how pet insurance is priced and how to read a rate filing.

Accident and illness (A&I). A plan that covers both injuries and illnesses, as opposed to an accident-only plan.

Age at enrollment. The insurer fixes the age factor on the day you buy, so the price does not rise with birthdays because of age. Trupanion prices this way. The opposite is attained age.

Amendatory endorsement. A state’s amendment to a countrywide policy form. Your contract is the form plus your state’s endorsement, not the sample policy on the website.

Annual limit. The most the policy pays in a policy year. Unlimited means no maximum.

Attained age. The pet’s current age. The insurer recalculates the age factor at every renewal, so the premium rises as the pet gets older. Also called “birthday pricing”.

Bilateral condition. A condition of paired joints, such as cruciate ligament tears or hip dysplasia. If one side was treated before the policy, many insurers will not cover the other side either.

Curable condition. A condition the policy covers again after a set time without symptoms or treatment. Chronic, congenital, hereditary and many orthopedic conditions stay excluded for good.

Deductible. The part of the bills you pay yourself before the insurer starts to reimburse you. Annual: once per policy year. Per-condition (lifetime): once for each condition, for the life of the pet.

Direct pay. The insurer pays the clinic directly, so you do not pay the full bill and wait for reimbursement.

Effective date (new / renewal). The day the rates in a filing start to apply to new policies and, separately, to renewals.

Exam fees. The vet’s fee for the visit itself. Some policies include it, some sell it as an option, some exclude it.

Indicated vs selected. How much the insurer’s own calculation says it needs to raise rates (indicated), and how much it actually asks for or gets (selected). The gap is a likely future increase.

Insurer (underwriter). The insurance company that carries the risk and pays the bills. Its name is on the policy. It is often not the company whose brand you see.

Insurer Disclosure of Important Policy Provisions. A short document on the key terms of the policy. States whose law follows the NAIC model require it. It lists exclusions, waiting periods, deductibles and limits, says whether the price rises with age, and names the insurer.

Loss ratio. The share of premium paid out in claims. The permissible loss ratio is the share at which the insurer covers its expenses and earns its planned profit. When the projected loss ratio is above it, the insurer usually asks for an increase.

Pre-existing condition. A condition with signs, symptoms, treatment or vet advice before the policy started or during the waiting period. A diagnosis is not needed. See pre-existing conditions.

Prior approval. The regulator must approve a new rate before the insurer can use it. California works this way.

Program administrator (MGA). The brand company. It sells and services the policy on behalf of the insurer.

Rate filing. The insurer’s request to the state regulator to set or change rates. Its rate pages or rate manual hold the base rates and every factor table; its actuarial memorandum explains the change.

Reimbursement (coinsurance). The percentage of covered bills the insurer pays back after the deductible. Coinsurance of 10% means 90% reimbursement.

Renewal. Continuing the policy with the same insurer or an affiliated one. Under laws based on the NAIC model, a condition the policy already covered does not become pre-existing at renewal.

Renewal impact distribution. A table in a filing that shows how many customers get each size of price change at renewal, for example how many get +40% or more.

Tenure factor. A factor that changes the price with the number of years the policy has been in force. At Independence American’s V4 program in Florida it adds about 3% a year (filing 26-024273).

Territory. The price factor for where you live, set by ZIP code or by its first three digits.

Trend. How fast the insurer expects the cost of claims to grow each year. It builds this into its rates.

Waiting period. A period after purchase when some claims are not covered. A waiver cancels it after a vet exam.

Wellness. A plan for routine and preventive care. Under Florida’s law it is not insurance, and an insurer cannot make you buy it to get a policy.