??!
Avleen M.
Avleen M.Oct 16, 2020

Pet Insurance Buying Guide

If you're a pet owner, you probably agree there’s nothing worse than your dog or cat getting sick or hurt. But what happens when vet bills are sky high? Pet insurance can grant you peace of mind, helping your pet get the treatment they deserve, without sending you broke.

Is pet insurance worth it?

Man and dog hugging

Pet insurance may be worth it if you don't think you'll be able to afford the upfront costs of paying for veterinary treatment when your dog or cat is sick or injured.

This is the primary reason pet insurance exists - to help you afford veterinary costs. The nature of an accident or even an unexpected illness is that it's sudden and unplanned. If you don't have enough money saved up for a rainy day, you could find yourself in a stressful situation, prolonging treatment for your pet until you figure out how to get the money.

How does pet insurance work?

Pet owners pay an insurance premium, which is usually deducted monthly. When the time comes for you to claim, your pet insurer will cover a certain percentage of eligible vet bills, up to the annual limit specified by your policy. This usually falls within the gambit of 65-85% of the bill, depending on the level of cover you've chosen. For certain conditions, you may have to pay both an excess and a co-payment.

How much is pet insurance in Australia?

MoneySmart estimates that the cost of a monthly pet insurance premium is around $20-60, which amounts to a higher-end figure of $720 per year. This is comparable to the sum you’d spend on ‘premium dog food, plus treats’ which MoneySmart ballparks at $800 per year.

The exact price of a pet insurance premium is tricky to zero in on, as it depends on several factors that make each pet insurance quote unique. Here are some of the primary factors that will affect the price of your premium.

Your pet’s age, breed and species

Cute French Bulldog pup
A French Bulldog puppy

Age: The best time to insure your pet is when they’re still a puppy or a kitten. Many policies allow coverage from 8 weeks old. Insuring your pet while they're young means they're less likely to develop a pre-existing condition that's excluded from coverage. The older your pet becomes, the more expensive pet insurance becomes, too.

Species: Pet insurance is mainly available for dogs and cats, however some insurers offer coverage for other animals, too (like 'exotic' pet insurance for rabbits or birds).

Cat insurance is generally cheaper than dog insurance, and there’s less of a price discrepancy between cat breeds, whereas for dogs the cost of a premium will fluctuate greatly depending on their breed.

Breed: Some breeds have inherent health conditions that make them more expensive to insure. For example, the average cost of insuring a 1-year old French Bulldog on an annual comprehensive policy is around $1,456, compared to $610 for a Jack Russell terrier.

Excess

The amount of excess you choose to pay also effects the price of your premium (a lower excess equals a higher premium). Some pet insurance plans are 'no excess,' but will cost more each month.

Excesses may be charged as a one-off per condition - letting you claim on the same condition multiple times in a year, while only paying an excess once. They can alterntively be charged each time you claim for that condition. Sometimes an insurer will require a co-payment along with an excess fee.

Discounts

Some pet insurers offer discounts as incentives. For example, you may receive a discount if your pet is desexed and microchipped, if you have multiple pets insured with the same provider (a 'multi-pet policy,') or if you have other active policies with the insurer. For example, some companies offer pet insurance as an add-on to home and contents insurance - however coverage is usually limited.

Your chosen level of cover

There are usually three tiers of pet insurance you can opt for, discussed below. Accident-only coverage is the budget option, whereas a comprehensive policy equates to a higher premium.

Types of Pet Insurance

Accident-only coverage

This most basic policy type covers your pet for accidental injury, but excludes coverage if they become ill. Note that some insurers don’t offer this policy type. Instead, they skip straight up to the next level, which is the case with Seniors Pet Insurance.

Accident and Illness coverage

This provides coverage in the event of accidental injury or illness. This is the mid-tier level of coverage, and often the most popular policy with pet owners in Australia.

Comprehensive Pet Insurance

Comprehensive policies offer coverage for all manner of misfortunes that could befall your pet, including accidents and illnesses. This includes the costs of surgery, hospitalisation, and medication.

Routine care, also called preventative care, may be offered as a standard inclusion or an optional extra as part of a comprehensive policy. The benefit amount isn’t usually very high, and may or may not include treatments or procedures like dental care, vaccinations, flea, tick and worm control.

Note that a routine care benefit is often differentiated from vet’s consultation visits in a policy. Make sure to clarify the difference between them with your insurer before signing up.

Is there anything a pet insurance policy won't cover the cost of?

Yes - there are actually several types of conditions, treatments or circumstances that may exclude you from being reimbursed by a pet insurance provider.

Pet insurance policies can be tricky to navigate, because of the sheer number of exclusions and trying to understand the differences in wording. Make sure to scour a Product Disclosure Statement and know the terms and conditions before committing, to ensure you’re getting the optimum protection for your animal companion.

General Exclusions

While these will be covered in your specific policy, here are some examples of general exclusions commonly found in pet insurance policies:

Kitty with toothbrush

  • Bilateral conditions: These refer to pre-existing conditions that affect two parts of the body. For example, if your pet had a condition in their left eye, they won't be covered if they later develop that same condition in their right eye.
  • Elective treatments: These may actually be included - but only in some comprehensive policies. They refer to any treatments that are 'not medically necessary,’ such as de-sexing, orthodontics and check-ups.
  • Diseases with a known vaccine: If the disease could have been preventied by a vaccinaton (such as kennel cough) it's excluded.
  • Dental treatments: While dental disease is one of the most common medical conditions in dogs over four years old, most pet insurance policies exclude it. This includes cleaning, orthodontics and treatment for gum disease.

Other Exclusions

Pre-existing conditions

This refers to any illnesses or injuries that your pet has, which you’re aware of. You’re required to disclose these to your insurer when applying for pet insurance. They will make the cost of your premium higher.

Pretty much all pet insurance companies will exclude pre-existing conditions from being covered. This is another reason why it’s important to get pet insurance as early as possible into the life of your pet, when they have few to no pre-existing conditions.

Waiting periods

Just like human health insurance, waiting periods also apply for pet insurance. In most cases, for routine treatments you can make a claim after serving a 30-day waiting period. However for more serious health conditions like tick paralysis and cruciate ligament problems, you might have to wait up to 6 months.

Sub-limits

While you'll have an annual benefit limit, which caps the costs you can claim, there are also sub-limits. For certain conditions, you can only claim up to a certain amount each year - even if you have 'spare' money in your overall benefit limit. These include conditions such as tick paralysis and cruciate ligament issues.

Age restrictions on illness cover

Many pet insurers exclude illness coverage for pets nine years and older (however accident cover is always available, regardless of age).

Switching insurance providers when your pet is a senior is often a headache. You'll have to list their medical history as pre-conditions, which makes coverage much more expensive than if you'd stayed on the same policy from the get-go.

Sometimes the only way to avoid this is to sign up to a lifetime pet insurance policy, as opposed to an annual policy, referred to as a time-limited policy. This means your pet will be comprehensively insured throughout their lifetime. Keep in min though that lifetime policies are dearer than time-limited ones.

Alternatives to Pet Insurance

If the idea of being locked into a monthly pet insurance premium seems daunting, you're not alone. According to the RSPCA, only 30% of dog owners and 21% of cat owners had pet insurance in 2019.

So what are the alternatives?

Dedicated savings account: Some families set money aside into a special savings account for their pet. Whether you'll have enough saved up when the time comes can be hard to predict with this contingency plan. For some pet owners, a temporary savings accounts may be a good option while they sit through longer, 6-month waiting periods at the start of their policies.

Vet payment plans: Some vets offer these, but they exclude a number of the benefits afforded by insurance, such as expensive surgery costs.

Ultimately, while pet insurance can be expensive and confusing, the truth is that some accidents can throw you a real curve ball, like your dog ingesting a foreign object, or your cat falling from a height. It can be heartbreaking to watch your pet suffer without having a means of helping them.

Many pet insurance reviews on ProductReview noted that without pet insurance they might not have been able to ‘keep' their pet. Since around 10% of vet visits result in pets being put to sleep according to Pet Insurance Australia, paying a monthly premium seems like a small price to pay to safeguard the precious life of your fur baby.

Conclusion

Pet insurance can really help ease some of the burden associated with your pet becoming sick or injured unexpectedly. There are different levels of cover that can cater to your budget, however always make sure that the policy you choose is the right match for your pet's age, breed and any existing or foreseeable health conditions. Know your non-negotiables when it comes to what you want to claim, and always read the PDS carefully to ensure that these benefits are not ruled out by any policy exclusions.


About the author
Avleen is a content writer for ProductReview. Her area of expertise covers furniture and bedding, home appliances and beauty products. Outside of work she enjoys scribbling down poetry and music, reading fantasy novels, and discovering delicious vegan restaurants.