When it comes to your pet’s wellbeing, you can’t always protect them from the unexpected — but insuring them means you don’t have to face the vet bills alone.
Pet insurance terms can sound overwhelming at first. At Knose, we want pet owners to feel confident in understanding the key concepts behind their policy, so they can make the best decisions for their dog or cat.
In this article, we’ll focus on one of the most important levers in your policy: annual excess — what it is, how it works, and how to choose the right level for your situation.
What Is Annual Excess?
Annual excess is the amount you need to contribute toward your pet’s eligible vet expenses each policy year, before your insurance benefits kick in. It applies once per policy period, and the amount depends on the cover you choose.
Once your annual excess has been met, eligible claims will be reimbursed according to your benefit percentage and the other conditions of your policy.
With Knose, you can choose an annual excess of $0, $100, or $200. You can increase your excess at any time, but you can only reduce it when your policy renews at the end of the policy period.
How Does Annual Excess Work? A Step-by-Step Example
Say your pet has a gastrointestinal condition requiring treatment, and you receive a vet bill of $800. Here’s how the claim would be calculated with a $100 annual excess and an 80% benefit percentage.
- Eligible Vet Bill: $800
- Annual Excess: $100
- Benefit Percentage: 80%
Step 1: Annual excess is applied
The $100 annual excess is deducted from your eligible Vet costs first. This leaves a remaining balance of $700. Importantly, this $100 applies to the entire policy year — you won’t pay it again until your policy renews.
| Annual Excess | $100 |
| Eligible Claim | $800 |
| Remaining Balance | $700 |
Step 2: Benefit percentage is applied
Your benefit percentage is the portion of the remaining balance that Knose reimburses. With Knose, you can claim back up to 90% of eligible vet costs. In this example, let’s use 80%.
| Benefit Percentage | 80% |
| Reimbursement (80% × $700) | $560 |
| Your out-of-pocket share (20% × $700) | $140 |
Step 3: Your total costs summarised
| Your total payment (annual excess ($100) + out-of-pocket share ($140)) | $240 |
| Knose’s reimbursement | $560 |
This example uses one claim for the year. Any further eligible claims during the same policy year would skip the annual excess step entirely — it’s already been applied.
Annual Excess vs. Per Condtion vs. Per Claim Excess
It’s worth understanding the difference between these two structures that are available in the market, as they can significantly affect your out-of-pocket costs.
| Excess Type | When You Pay |
| Per Claim | Every single claim submission |
| Per Condition | Once per condition, however many claims submitted |
| Annual | Once per policy year, regardless of claims or conditions |
Knose has an annual excess! An annual excess is paid just once per policy year, regardless of how many claims you make. If your pet needs ongoing treatment — multiple vet visits, follow-ups, or separate health issues — you only pay the excess once, and the rest of the year’s eligible claims are assessed without it.
💡 A claim is an individual request for reimbursement on a vet expense. Each time you submit an eligible vet invoice to Knose, that counts as one claim. Learn how to make a claim with Knose.
For pets with chronic conditions, recurring illnesses, or breeds that tend to need more frequent care, an annual excess structure like that of Knose can represent meaningful savings over the course of a year.
Why Does Annual Excess Matter?
Depending on your pet’s breed, age, and lifestyle, they may need more regular vet attention than you expect. With an annual excess, you can stay focused on getting them the care they need — without the added concern of paying an excess for each visit.
Annual excess also directly affects your premium.
💡 A premium is the regular payment you make to keep your insurance policy active — whether or not you make a claim.
Generally, choosing a higher annual excess will lower your ongoing premium, while a lower excess means a higher premium but less to pay at claim time. Knowing this trade-off helps you choose a structure that suits your budget.
Is a Higher or Lower Annual Excess Better?
There’s no single right answer for everyone — it depends on your budget, your pet’s health needs, and how comfortable you are with upfront costs versus ongoing payments.
Scenario 1: Choosing a Higher Excess ($200) You pay more when you make a claim, but benefit from a lower ongoing premium. This works well if you have savings set aside and your pet is generally healthy and not injury prone.
Scenario 2: Choosing a Lower Excess ($0 or $100) You pay less excess (or nothing) at claim time, but your premium will be higher. This suits pet owners who want predictable, lower out-of-pocket costs each time they get an eligible vet bill — and who prefer Knose to cover more of the expense at the claim time.
With Knose, your annual excess options are $0, $100, or $200 — giving you flexibility to match your cover to your financial comfort level.
Other Factors That Affect Your Reimbursement
Annual excess is only one piece of the puzzle. When calculating your final reimbursement, your policy is also affected by:
Benefit percentage — the portion Knose reimburses after excess is met. With Knose, you can claim back up to 90% of eligible vet bills!
Annual limit — the maximum Knose will contribute toward eligible claims in a policy year. Knose offers up to $25,000 in annual limit.
No sub-limits — Knose applies no sub-limits on eligible treatments. Your full annual limit applies to any covered condition, whether that’s surgery, specialist referrals, or hospitalisation.
Exclusion periods — the waiting period before certain conditions become eligible for cover. Knose’s exclusion periods are among the shortest in the market: 1 day for injuries, 14 days for illnesses, and 14 days for dental illness (for pets under 1 year old), except for Specified Conditions where 6 months exclusion period applies.
Eligibility of treatment — whether the treatment or service is covered under your policy. Routine and preventive care, pre-existing symptoms and conditions, and certain specified treatments are not covered by Knose.
Understanding how these factors interact gives you a clearer picture of what you can expect to be reimbursed — and helps you choose the right excess level for you.
What Should You Consider When Choosing an Annual Excess?
Your budget and cash flow
Think about what you’re comfortable paying at claim time versus what you can manage as a regular premium payment.
If your budget is not tight month-to-month, a higher monthly premium with a $0 excess might give you more peace of mind. If you’d rather keep premiums low and have savings to draw on if needed, a $200 excess could be the better fit.
Your pet’s age and health needs
Older pets or those with recurring conditions tend to visit the vet more often. For these pets, an annual excess (rather than per-claim excess) can be particularly cost-effective — you pay once regardless of how many claims you make that year.
If your pet is young and healthy, you may not need to claim often. Even so, when you do claim, a lower annual excess means less to pay at that moment.
And if the unexpected happens and multiple claims arise in one year, you’re protected from repeated excess payments.
Overall pet insurance policy value
Your annual excess should be considered as a key part of your whole pet insurance policy. Consider the benefit percentage, annual limit, optional benefits, and exclusion periods together with annual excess — not just the premium in isolation.
For example, a policy with a $0 excess, 90% benefit percentage, $25,000 annual limit, and no sub-limits may offer far greater value than one that appears cheaper at first, but offers less coverage.
Protect Your Pet with Knose Pet Insurance
Understanding annual excess — and how it fits alongside your benefit percentage, annual limit, and overall coverage — puts you in a stronger position to choose a policy that genuinely meets for your and your pet’s needs.
Knose Pet Insurance is an award-winning Australian provider with over 20 excellence awards. We offer flexible, customisable cover with up to 90% reimbursement, up to $25,000 in annual limit, no sub-limits, and some of the shortest waiting periods in the market.
Ready to find cover that fits? Get a quote in under two minutes!
Disclaimer: Pet Care Plans are provided to help pet owners improve and maintain the health of their pets. Such plans are designed with vets and administered by Knose Care Pty Ltd (ABN 96 619 770 973). Veterinary services are provided by your vet.
Knose.com.au Pty Ltd, (ABN 70 680 822 986, AR 1311940) (“Knose”) promotes and distributes Knose Pet Insurance as an authorised representative of ThePetInsuranceCompany.com.au Pty Ltd (ABN 38 620 795 735, AFSL 536651) (“The Pet Insurance Company”). The Pet Insurance Company acts under a binding authority from the insurer, Pacific International Insurance Pty Ltd (ABN 83 169 311 193, AFSL 523921) (“Pacific”), which underwrites this product. In all aspects of arranging this product, Knose and The Pet Insurance Company act as agents of Pacific, not as your agents.
Any advice provided is general and does not take into account your objectives, financial situation, or needs. Please consider the Product Disclosure Statement (“PDS”), Financial Services Guide (“FSG”), and Target Market Determination (“TMD”) at www.knose.com.au or by calling 1300 356 642 before deciding to acquire or hold the product.
Terms, conditions, limits and exclusions apply. Please refer to the PDS.
