Australians love their pets. Almost two thirds of households have a pet, while 90% of us have had a pet at some stage of our lives.
But the reality is that pet ownership can be expensive. After pet food, the cost of a vet accounts for the second largest category of ongoing expenditure related to pet ownership.
The fact is that pet insurance is rising sharply. One report suggests that Australian pet owners are spending more than $2.6 billion annually at the vet, up 19%, or some $414 million, since 2016.
It also reveals that on average, Australians are forking out $470 each and every year on vet services for their dog, and $261 for their cat.
These results, which have been extrapolated from spend recall by pet owners, could be at the lower end of the scale, but provide a useful indicator on the rising costs.
The hefty price tag associated with pet ownership is why so many pet owners consider whether it’s worth getting pet insurance—especially as our cost-of-living increases.
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What Is Pet Insurance?
Pet insurance involves paying a monthly premium to an insurer in return for peace of mind that should your pet become ill or injured you will be reimbursed for vet bills.
Many owners take out insurance to avoid having to pay costly vet bills for operations and other serious procedures, which can run into the thousands if not tens of thousands of dollars.
The premium you pay will be based on the age of your pet, the level of coverage you select (from basic to comprehensive) and even your pet’s breed.
How Does Pet Insurance Work?
Pet insurance works in the same fashion as other forms of insurance: owners usually pay up front for the cost of the vet and then lodge a claim with the insurer for partial reimbursement. The best insurers will pay up to 90% of eligible vet bills, and some will cover routine care, including dental.
You may be required to pay an excess, although some companies waive the excess.
It’s worth noting that many insurers are starting to offer GapOnly services, allowing pet owners to pay the difference between what the insurer will cover and the vet bill, preventing the need for owners to fill out forms and lodge claims later.
Some insurers allow you to make a claim online, while other companies require you to make a call to start the claims process.
The most common pet insurance cover on the market will provide insurance cover for your dog or cat. But you can also find cover out there for fish, birds, small mammals and even reptiles.
Pet insurance gives you the ability to claim up to a certain dollar limit, say $20,000 per year, on vet bills, and you may be offered a discount for the second or third pet insured, and so on.
Traditionally, pre-existing conditions have been excluded from pet insurance policies, although this is slowly changing. It’s worth asking the question of an insurer and reading the fine print before signing on the dotted line to understand what’s included and excluded from the policy.
As CHOICE points out, one of the biggest issues with pet insurance is that you’re locked into your policy if your pet develops a health condition.
“If you switch, you won’t be covered for any pre-existing conditions while your insurer can change premiums and introduce new restrictions with each renewal,” the consumer group warns.
What Are Some of the Major Pet Insurers?
Over the average lifespan of a dog, pet owners spend more than $25,000 per animal, on average, according to figures from the Australian Veterinary Association.
The cost of dog ownership is generally much higher than owning a cat.
There are endless pet insurers on the market to choose from. Some of the big players in this space include Real Insurance, Woolworths Comprehensive Plus Cover, Medibank Ultimate Pet Care, RSPCA Pet Insurance, Coles Pet Insurance, Petsy, and Pet Insurance Australia.
The Main Types of Pet Insurance Cover Are:
Accident and illness: Whether your pet is in an accident or suffers from a disease or illness such as hereditary conditions or cancer, you’ll be covered.
Accidents only: Basic cover that covers a portion of the cost of your pet if injured at the park, or hit by a vehicle, for example.
Comprehensive: This is top-tier cover that will cover you for all of the above, and also other circumstances, such as the cost of ongoing care.
When deciding on what type of cover suits you best, you should consider the kind of pet you have and whether or not they are likely to beed basic cover or a more comprehensive policy to suit ongoing care.
If you think your pet will cost you more than the average, then it may be worth selecting comprehensive care, but, again, make sure it offers the kind of features your pet is likely to include and ensure you have adequate annual limits.
What Does Pet Insurance Cover?
A comprehensive policy will typically cover your pet for:
- Accidents from snake bites, allergic reactions, car accidents.
- Illnesses with exception of an illness that could have been prevented if it was vaccinated or is part of a pre-existing condition.
- Pet hospitalisation, if needed.
- Emergency boarding fees.
- Paralysis.
- Broken bones.
- Euthanasia.
- Medication.
- Boarding and care if you are unwell or unable.
What Typically Isn’t Covered?
A few things that are commonly not covered under pet insurance usually relates to preventative care:
- Routine check-ups
- Dental
- Vaccinations
- Desexing
- Behavioural problems: a good reason to select your pet carefully.
- Parasite control
- Pregnancy
- Grooming
How To Choose the Best Cover
Here are a few things to consider when selecting a policy:
- Maximum annual benefit: The total amount the insurer will pay out each year.
- Range of features: Which conditions are included, and what’s excluded?
- Annual benefits: Are there extras and what are the limits for conditions such as tick paralysis?
- Excess: Check the sum you need to pay on each claim. These can vary greatly.
- Dental: This is a common exclusion on policies, so check with your vet to understand if your pet is susceptible to tooth issues.
- Age of pet: If your pet is senior, bear in mind your options on policies will be limited.
- Pre-existing conditions: If your pet already had a condition before you took out the policy, ask if it will be covered.
- Exclusions: Routine treatments for conditions like pregnancy, vaccinations, parasite control and desexing aren’t covered.
- Waiting periods: Check how long you will need to wait before you can make a claim.
- Sub-limits: Some policies list sub-limits on certain types of claims, such as a limit on cruciate ligament claims.
- Optional extras: Some policies offer extras, like dental, which cost more. You will need to weigh up whether it’s worth it, depending on your pet and the likelihood of ongoing issues.
- Does the vet offer “gap only cover”. This is a relatively new feature and involves the insurance company paying the vet directly, with owners only paying any balance not covered by the policy.
Wait: Do You Actually Need Pet Insurance?
This is the million dollar question that only you can answer.
Some people argue that it’s better to physically put the money away each month in case of an emergency. But they don’t have the discipline and for them an enforced premium is the way to go.
According to insurance underwriter, PetSure’s 2021 Australian Pet Monitor Health report, the most common conditions affecting puppies under one year old include, in order, gastrointestinal tract diseases; ear infections; eating foreign objects or toxins; skin diseases, including infections and allergies; and traumatic accidents, including broken bones.
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As the table above indicates, vet bills can rise very quickly. So at least do your homework as to whether pet insurance is worth it for you.