In Australia, 3 out of 5 households have pets. We choose to own pets for all sorts of reasons: companionship, security and to teach our children about the responsibility of looking after animals. Dogs are our most popular four-legged friends (38%) but cats aren’t too far behind (29%).
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 can pet insurance help?
Pet insurance policies tend to come in three different types: (a) accident only, (b) accident and illness and (c) accident, illness and routine care. Typically, there is an upper and lower age limit for pet eligibility (e.g. 8 weeks to 9 years old) and a waiting period before any claims can be made for pet illness (30 days is pretty normal). In some cases you can get a multi-pet discount.
Depending on the policy, your pet cover might include any of the following benefits: accidental injury, illness, routine care (this may be an optional extra), a yearly benefit for vet visits and consultations, cruciate ligament conditions cover, paralysis tick cover and more.
Some policies even provide cover for emergency boarding kennel fees, if you should be stuck in hospital for a spell and are unable to look after your pet. Policies typically reimburse you for a stipulated percentage of eligible veterinarian fees (known as a co-payment), excluding pre-existing conditions. Most pet insurance policies focus on dogs and cats, though you can also find horse policies.[ii]
There’s a good chance your furry mate will have to visit the vet at least once during its lifetime for more than just a routine check-up, and this is where having pet insurance can make a big difference. In the worst case scenario, a pet owner unable to afford a large vet bill might be forced to make the upsetting decision of needing to have their treasured pet put down if they can’t meet the cost of expensive treatment. Having your pet insured means you have more treatment options available when the unexpected occurs.
How to choose a policy
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.
The type and age of your pet also makes a difference – certain breeds might be more predisposed toward joint problems or eye issues, for example. The type of cover you select and the amount of excess (if any) you pay will also affect price.
Ultimately, you want a policy that serves the needs of your pet’s health, contains the benefits you want and won’t break your budget. As with all insurance, the devil is in the detail. Make sure you read the Product Disclosure Statement (fine print) of the policy so you know exactly what’s covered and what isn’t.
Limitations and 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]