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Pet insurance companies usually determine how much to reimburse for a claim in one of two ways. Some plans use what is known as a benefit schedule while others use the actual veterinary bill to determine reimbursement.

Pet Insurance With A Benefit Schedule A benefit schedule sets a maximum reimbursement for a procedure or treatment.

With a benefit schedule the pet insurance company decides in advance how much it is willing to reimburse for a procedure or course of treatment, regardless of what it cost you. The benefit schedule may not vary by geographic location and traditionally has not increased every year to take into account veterinary inflation. So if the benefit schedule is not kept updated, your reimbursement will actually shrink about 20% every three years at the current inflation rate for veterinary fees!

Benefit schedules are currently used by Veterinary Pet Insurance and Pet First Healthcare.

Pet Insurance with Usual, Customary, and Reasonable Benefits UCR stands for "Usual, Customary, and Reasonable" and is a way of reimbursing claims based on the actual fees charged for procedures and treatments in a certain geographic area. The reimbursement recognizes the veterinary costs where you live (for example, veterinary care in Manhattan can be more expensive than in Cleveland) and also allows for higher fees for emergency care (emergency facilities are usually more costly than your family vet clinic because they are open 24/7, 365 days a year), and veterinary inflation over time.

UCR benefits are currently used by all other pet insurance companies except the ones listed above.

Benefit Schedules Can Leave You Shortchanged If you have a policy with a benefit schedule you might be in for a surprise when you make a claim. Many pet parents are shocked when their claims reimbursement is much less than their veterinary bill. They had no idea their pet insurance would not recognize what they had actually paid.

The important thing to remember is that benefit schedules limit the payout no matter what the veterinary bill is.

Choosing A Pet Insurance Plan Because UCR reimbursements are more closely tied to your actual veterinary bill they are less likely to give you a shock when you make a claim than a benefit schedule. For the current pet insurance plans on the market, your premium might be higher for one with UCR benefits than one with a benefit schedule because you receive a higher claims reimbursement.

To avoid complication at claims time and to make sure you get what you expect from a pet insurance plan go with one that doesn't use a benefit schedule.

A Note On Veterinary Fees Many pet insurance companies utilize the Veterinary Fee Reference Guide to help guide them in determining how much to reimburse. This guide compiles average veterinary fees on hundreds of procedures from 1,786 veterinary hospitals across the United States. There is a 5th edition that will be out some time this fall updated with 2006 data.

Alex Krooglik is the co-founder of Embrace Pet Insurance based in Cleveland, Ohio. Embrace Pet Insurance was founded in 2004 and its mission is to convince responsible pet parents that cat and dog insurance can and should be an integral part of maintaining every pet's good health. Alex is pet parent to a very cheeky black kitten rescued from the Geauga Humane Society.