Aussie pet owners forked out over $12 billion in pet services and products in 2016, and it’s estimated that when you add up all the expenses of food, vet care, health products, grooming needs and boarding fees, the average cost of keeping a dog in this country is $1475 per year (for cats it’s $1029).
These, of course, are just the ‘running costs’. At times, our pets can be involved in an accident or suffer a sudden illness. When this happens, things can get expensive, with surgical costs sometimes creeping into thousands of dollars on top of treatments, medicines, X-rays and all the rest. That’s where pet insurance can help.
Around a quarter of Australian dog owners and 1 in 5 cat owners have pet insurance. How it typically works is you pay the vet bill up front, get reimbursed by the insurer and you pay any excess.[i] Although pet insurance is still a fairly new product in Australia, pet owners have an increasing number of policy choices and insurer options to select from.
How to choose the right type of pet insurance cover
There’s a lot to think about when deciding on a pet insurance policy – your own financial circumstances are just one factor. There is also the type of pet you own. Some pets, for example, may be more accident-prone or susceptible to certain conditions or illnesses than others. Mostly it comes down to how prepared you want to be for an unexpected health event in your pet’s life. Pet insurance can take a lot of worry out of the equation.
The cost of your pet insurance premium is based on a risk assessment of how likely it is that a claim on the policy will be made in the future. The insurer will also look at where you live: for example, if your region is one where paralysis ticks are more prevalent, this may influence the premium.
Pet insurance comes in three basic types: accident only, accident and illness, and comprehensive. ‘Accident only’ policies cover accidents like burns, snakebite, fractures, getting hit by a car, bites from other animals, etc.
‘Accident and illness’ covers injuries and accidents but also covers veterinarian-diagnosed illnesses and disease. Each policy varies, but in general you can expect things like skin conditions, bee stings, ear infections, infectious diseases, cancer, hereditary conditions and more to be covered.
Pre-existing conditions and diseases where there’s a known vaccine are typically excluded from accident and illness cover.
Comprehensive pet insurance covers just about everything you’ll find in an accident and illness policy, but also includes a number of ‘routine care’ treatments such as dental care, vaccinations, worming treatments, de-sexing, behaviour training and more.
Most policies have age restrictions. While you can usually insure a pet once they turn 8 weeks, you’ll find it much harder to find insurance for an animal that’s more than nine years old.
A pet’s needs change as it ages, which in turn dictates the most appropriate type of insurance cover. For example, the priorities for a young pet will be things like health checks, preventative vaccinations, microchipping and de-sexing, which are only covered through a comprehensive policy.
A ‘mid-life’ pet may be okay with an accident and illness policy for awhile, but an older pet may require extra cover for ‘senior citizen’ conditions such as cancer, eye conditions or arthritis, which means you may be switching back to a comprehensive policy again.
It pays to aggressively shop around for the best pet insurance and to keep your eye on what’s being offered, so you get the best value for money and cover that matches up with your pet’s age and health.
How much does pet insurance cost?
While most pet insurance is reasonably affordable, there are still ways to reduce the cost. One way is to choose an accident only or accident and illness policy instead of comprehensive cover.
You could also opt to pay a higher excess in exchange for a lower premium, although in this case you’d want to make sure you could afford to pay that excess if your pet suddenly needed emergency treatment.
Another way to save money is to switch to a different insurer, if you can find one that provides a similar level of care at a lower price. As is the case with all forms of insurance, it pays to be aware of ‘too good to be true’ policies that seem suspiciously cheaper than their competitors.
Always read the Product Disclosure Statement – that oh-so-boring but oh-so-important ‘fine print’ that explains all the policy details, including any waiting periods that may apply.
Be aware of all the exclusions
Every policy has clearly outlined limitations and exclusions – and many of these policy exclusions help keep your premium costs low. If you have any questions at all about the finer details of what’s included (and what’s not) with your cover, ask your insurer for clarification. Every policy is different, but here are a few typical exclusions you may run across:
- Behavioural problems
- Pet births, pregnancies and other breeding-related expenses
- Treatment for conditions that could have been prevented through prior vaccination
- Treatment during policy-specified waiting periods (normally 30 days)
- Elective treatments (e.g. de-sexing or orthodontics)
- Treatments required because the pet owner didn’t take adequate precautions to protect their animal from situations that may result in illness, injury or aggravation of an already treated condition
- Treatment during periods when the pet may be used for occupational/commercial purposes
Treatment for pre-existing conditions where symptoms were visible before purchase of the policy[iii]
[i] https://www.moneysmart.gov.au/life-events-and-you/life-events/getting-a-pet/the-cost-of-a-pet [iii] http://understandinsurance.com.au/types-of-insurance/pet-insurance
This post was brought to you by Budget Direct Pet Insurance