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In defence of pet insurance
The pet insurance industry has come under fire recently, but here are 5 reasons why pet owners should think twice before cancelling their policy.
Thinking about introducing a pet into your family this season?
There are plenty of things to consider before making the leap. Starting with what kind of pet? While cats and dogs are the most common pets to own, but they do have their differences and "running costs".
Once you've decided on what kind of animal then there might be the question of which breed? From rescue to purebreeds, this choice can affect not only your hip pocket but also will be dictated by your own lifestyle and home situation. While there is plenty of good information out there to help you make the right choice of animal for you and your lifestyle, when it comes to the thorny issue of vet bills and pet insurance it can be hard to get a straight answer.
Recently there's been some criticism thrown at the pet insurance industry, being labelled as "emotionally manipulative" and "riddled with exclusions". While pet insurance might not be the right fit for every pet owner, here are five reasons why it should still be worth considering.
1. It can be the difference between life and death for your pet
If you got struck with a huge vet bill, what would you do? For some, the only option is to put their pet down. This is commonly referred to as "economic euthanasia".
"Economic euthanasia" is a term coined by Julia Crawford, the President of the Australian Veterinary Association (AVA), where people who are faced with huge vet bills are forced to pet their pet down because they can't afford to pay for treatment.
It's something many Australians are vulnerable to.
In a recent survey conducted by Finder, we found that dog owners would only spend $4,128 on vet bills before they would euthanise their pup. Cat owners fared even worse, with the average cost they'd spend on vet bills sitting at $2,137.
It's a figure that could have been life or death for Sam Cotton's cat, Dexter. Cotton didn't always have pet insurance. Two years ago, his cat Dexter contracted severe urinary issues which required immediate treatment at an emergency hospital. He was asked to make a decision on the spot: pay $13,000 for the surgery or have Dexter euthanised.
Cotton was fortunate enough to have the savings to be able to cover the operation. He said he never considered putting Dexter down. If he didn't have the cash, family members could have chipped in. Dexter was young and the prognosis was good.
However, a surprise bill of $13,000 to save Dexter's life was still a massive shock.
Cotton decided to get pet insurance for Dexter immediately so he wasn't faced with a similar situation again. "I feel more confident having pet insurance," he says.
"We're lucky that we could afford to pay for that operation. If you can't afford an emergency then you should get it so you don't have that emotional decision put on you."
Unfortunately, many other Australians don't have the same luxury to access the funds needed for veterinary surgery, which can hit upwards of $20,000 in some circumstances.
Here are the average costs of common pet surgeries, based on Hollard Insurance Company's 2016/17 claims data from Pet Secure.
|Condition||Average claim cost||Highest claim cost|
|Cataracts and eye treatments||$456||$10,338|
|Dermatitis and skin conditions||$374||$11,578|
|Foreign body ingestion||$982||$22,919|
|Urinary tract infections||$576||$9,305|
To see how other common pet surgeries stack up, just visit this page.
2. Purebreds could benefit the most
Purebred pups might look cute, but they often have a bunch of health issues that could mean bad news for your bank account.
If you've got a brachycephalic breed like a Frenchie, pug or a King Charles spaniel, be especially careful if you're planning on going without pet insurance. These kinds of pups often suffer from breathing difficulties due to their cute but squashed muzzles. In many cases, this can affect the dog's quality of life and surgery is necessary.
According to claims data from Petsure, breathing obstruction surgery will set you back an average of $1,321, but the insurer has also previously paid out a claim of $12,294 for this same surgery.
If you've got a cute, long-bodied breed like a dachshund, a corgi or a basset hound, you're not off the hook either. These breeds are at high risk of intervertebral disc disease, of which surgery can cost you an average of $5,209.
Large purebreds such as German shepherds, golden retrievers and labradors also have a predisposition for hip dysplasia, which will set you back an average of $2,628 at the vet.
While pet insurance certainly isn't perfect, the exclusion of pre-existing conditions at least for a certain amount of time is common to other insurance products, including most travel, health and life insurance products.
If you've got an older dog or one that's already had a bunch of health issues, then pet insurance might not be worth it, as you won't be covered for these pre-existing conditions. But if you're lucky enough to have a puppy or kitten at the moment, or you're looking at getting one soon, then you'd get the most bang for your buck by taking out pet insurance as soon as you have them in your arms.
3. Vets recommend it
Not sure if you want to pay for pet insurance? Maybe it's time to listen to your vet.
In a recent interview with the ABC, Julia Crawford of the AVA, which represents over 8,500 members, stated that she believed pet insurance to be beneficial for pet owners.
"As a guiding principle, we believe that it's an inherently valuable tool, and in our practices we see that it really improves outcomes. It's always those emergency illnesses, accidents, things you can't predict, that pet insurance is so brilliant for."
According to the AVA, owners with pet insurance are often in a better financial position to be able to afford complex operations and emergency care. For them, "insurance is a well-established tool that consumers can use to manage their financial risk".
4. Savings accounts are a good idea, but they aren't a perfect solution
Savings accounts are a commonly proposed alternative to pet insurance. If you're disciplined, you can pop the cash you'd spend on insurance into a high interest savings account. That way the money is still staying with you and isn't going to insurers – sounds good!
It worked for Cotton and Dexter, as he thankfully already had some savings put away. But this technique might not work for everyone.
First, you have to ensure that you're putting aside enough money each month to cover your pet's routine care, preventative care and any unexpected illness or injury. Second, if your pet gets sick or injured early in their life, you may not have enough saved up to cover the costs.
That's where pet insurance becomes incredibly useful. It means that you don't need to have a toss-up between digging into your life savings or putting down your pet if the worst were to happen.
5. Pet insurance pays out more than you'd think
There are claims floating around that pet insurers will find any excuse not to pay out come claim time. But this is simply not true.
According to Campbell Fuller, the Head of Communications for the Insurance Council of Australia (ICA), pet insurers pay more than 85% of the half a million claims made each year, "which shows customers are receiving value from the product".
Figures from Hollard Insurance Company's Petsecure tell a similar story.
Over 40% of Petsure customers claim every year, each submitting around 5.6 claims a year. Still not convinced? Petsure has also paid out almost $140 million in claims benefits in the last 12 months. It has also grown from 40,000 policies in 2008 to over 468,000 today, proving that there's definitely a large group of people that see the value of pet insurance.
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