What is pet insurance?
Pet insurance works like a promise between you and the insurer: you pay the insurer a certain amount (a "premium") each month, and in return, the insurer pays a percentage of your cat or dog's vet bills if your pet is sick or injured, up to an agreed maximum. It helps take the sting out of unexpected bills if your furry pal needs surgery or treatment for anything from a snakebite to cancer, as the bills can add up to thousands of dollars. Since most of us don't have that kind of money sitting around (and there's no Medicare for our dogs and cats), having insurance can help you make decisions based on your pet's health and not your bank account. This is how pet insurance works in Australia:
- You can visit any licensed vet of your choosing
- You pay either a monthly or an annual fee (the cost depends on your pet's age and breed)
- You get up to 85% of vet costs reimbursed, as much as $20,000 a year
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Comparing the different types of pet insurance
When signing up for pet insurance, you can generally choose from three types of cover:
Compare some pet insurance policies for 2019
|Policy||Percentage of Bills Covered||Maximum Annual Limit|
|Pet Insurance Australia Major Medical Cover||80%||$15,000|
|Woolworths Comprehensive Cover||80%||$12,000|
|Bow Wow Meow Comprehensive Plan||80%||$12,000|
|RSPCA Ultimate Cover||80%||$11,000|
|Guide Dogs Premium Care||85%||$20,000|
How can you compare pet insurance policies?
At first glance, it might seem like most pet insurance policies are pretty similar. Here's how 2 insurers' comprehensive policies stack up against one another.
|Insurer A||Insurer B|
|Annual Benefit Limit||$12,000||$20,000|
|Choice of excess||$0, $100 or $200||$0 or $50 only|
This comparison was made for Teddy the male French bulldog. He is 4.5 years old, desexed, and lives in Campbelltown NSW.
As you can see, these policies cover Teddy for similar services, both cost around the same, and both come with 80% back on treatment. However, there are some differences worth noting, such as:
- Annual Benefit Limit: The maximum benefit limit between policies can vary from around $11,000 to $20,000. A lower limit generally means cheaper premiums but you risk reaching your annual limit and being out of pocket if your pet is seriously ill or injured or becomes ill.
- Choice of excess: This is how much you pay out of pocket if you needed to make a claim. Some policies allow you to choose your excess amount (the higher your excess, the less you pay each month). In the example above,
- Reimbursement rate: While the difference between an 80% and an 85% reimbursement rate doesn't seem like a lot, imagine if you were faced with a $5,000 vet bill. You'd be out of pocket $750 with Insurer A and $1000 with Insurer B.
Case Study: Teddy the frenchie
As many a pet owner will tell you, it seems like pets are forever munching on things they're not allowed to eat, from slippers to freshly baked brownies.
It only takes a moment's lapse in concentration and you could be looking at an expensive trip to the vet. For instance, imagine that Teddy the frenchie swallows one of his owner's socks. Surgery can range from $982 to a staggering $22,919 and costs generally depend on where and when you need it. With something like a swallowed object, you don't have time to shop around for the best deal - your pet needs to be taken care of now. A comprehensive policy with a benefit limit of $20,000 would help cover up to 85% of the cost of surgery to remove the object. So while you'd still be out of pocket $3,000 in the worst case scenario, it's a bit more palatable than $20,000, or having to make a far more difficult decision. That's why it's always worth looking for higher annual limits when searching for a policy. While slightly lower premiums may be tempting, you risk being seriously out of pocket if something goes wrong.
Common situations where pet insurance can help
Our pets can get themselves into all sorts of trouble. Pet insurance can help you out if an accident or illness strikes. Here are some common issues your pet insurance can help cover:
- Illnesses: Diarrhoea, conjunctivitis, ear infections and lethargy are all common illnesses among kittens and puppies, and can cost anywhere from $100 to $2,500 or even more. While pet insurance can also cover you for scarier things like cancer and surgery, pet insurance is often just as helpful when it comes to these common illnesses.
- Accidents: Animal fights, car accidents, swallowing objects - these are all common occurrences with pets, often resulting in a trip to the vet. The average cost to treat a fracture is $2,500, meaning if 80% of your bill is covered with pet insurance, you'll be looking at $500 for out of pocket expenses.
- Genetic health conditions: Short-nosed dog breeds such as pugs often have breathing and digestive problems, labradors often have hip dysplasia and Persian cats are prone to certain kidney diseases. If you have a pet that's pre-disposed to health issues, you're better off getting insured before any of them come up.
When should I get pet insurance?
You can get cover for your pet once it's 8 weeks or older. If you're considering pet insurance, you're better off getting it while your pet is young and healthy, before it develops any pre-existing conditions. It's a good idea to consider pet insurance for any of the following reasons:
- You have a purebred: It's more likely that your purebred will have congenital conditions which means they're likely to need surgery at some point, or regular medication. Pet insurance can help keep things more affordable.
- If you can't afford a huge unexpected bill: Pet insurance keeps things manageable with a small monthly payment. Without insurance, you run the risk of being hit with an unexpected bill you can't afford and a potentially horrible decision to make.
- If you've got an adventurous pet: Is your canine naturally excitable? Does your pet love exploring the outdoors? If so, you really need to think about pet insurance as you never know what kind of trouble your pet might get into, whether it's eating something they shouldn't, getting into a fight or running into traffic.
- If your pet is under the age of 9: You can get usually cover for vet bills, accidents, illnesses and routine care for pets under the age of 9. Some policies do cover pets for illness over the age of 9, but it can be harder to get comprehensive cover, as most insurers only offer accident cover for older pets.
Should I switch pet insurance?
It's often the case that the best deals are available to new customers, so it makes a lot of sense to compare what's out there and switch to a more affordable policy, as long as you're still covered for what you need. However, there are a few things to watch out for when switching brands:
- Pre-existing conditions: Any pre-existing condition your pet might have suffered from prior to being insured is unlikely to be covered. If your pet has had a pre-existing condition, you may not be covered with a new insurer. Always check the product disclosure statement (PDS) before you switch providers and check in to make sure.
- Your excess: The monthly premiums might be cheaper but a high excess means that sometimes you'll be forking out more than the cost of treatment itself whenever you need to claim. Look for a policy that comes with a low excess. Some have options as low as $0 or $50.
How much does pet insurance cost?
We crunched the numbers on 560 dog breeds and 96 cat breeds, and found that the average cost of comprehensive pet insurance for a 5-year-old dog was $78.04 a month, while the average cost of comprehensive pet insurance for a 5-year-old cat was $51.69 a month.
As a pet owner, you know that having a pet isn't exactly cheap. The average Australian dog owner spends $1475 a year, and the average cat owner spends $1,029 a year on their pets (ASIC MoneySmart). When you consider that Australians spent $2.24 billion on vet costs in 2016, pet insurance starts to make a lot more sense. Insuring your pet helps offset the costs of owning a pet with policies ranging from around $20 a month (accident only cover) to $60 a month and upwards (comprehensive cover). As you can imagine, the cost differs considerably from one brand to another, so it pays to compare. Read our pet insurance cost guide to see what impacts the cost of pet insurance.
Is it worth it?
Check out some of the pros and cons of pet insurance to help you work out if it's worth it.
- Your pet may not have expensive health issues (in the short run anyway)
- Some conditions have sublimits (e.g. treatment for paralysis ticks)
- You are unlikely to get cover for pre-existing conditions
- You'll still have some out of pocket expenses
If you're still unsure whether it's worth it or not, check our our guide on the pros and cons of getting pet insurance.
What extra cover should you consider?
Pet insurance policies will often let you tailor your policy to work for you. Consider each optional extra on its own merits, and compare pet insurance policies to look for the ones you're more likely to use. Here are some optional extras that are available with different policies:
- Routine care. Routine care can be added onto most comprehensive policies. This covers the cost of everyday care, from vaccinations to teeth cleaning.
- Alternative and complementary medicine. This provides cover for things like physiotherapy, acupuncture and hydrotherapy when recommended by your vet.
- Dental illness. This covers conditions such as gingivitis, abscesses, and the removal of teeth due to cavities or tooth fracture.
Things you probably didn't know pet insurance could cover
Other than health issues for your cat or dog, pet insurance policies often include some cover for the following:
- Emergency boarding. If you're hospitalised for an extended period or in an emergency situation, most policies will cover the cost of boarding for your pet until you're able to get home again.
- Overseas pet travel insurance. Extends your cover overseas, but generally only if you're travelling to New Zealand or Norfolk Island.
- Essential euthanasia. Under this option, if euthanasia is deemed humane and essential by your veterinarian, your insurance provider will cover the expenses involved in this process.
- Paralysis tick treatment. Your policy will cover up to a certain amount of veterinary treatment arising from paralysis tick bites.
What isn't covered by pet insurance?
Just like any other insurance, pet insurance doesn't cover everything. Here are some common exclusions:
- Pre-existing conditions that your pet was diagnosed with or showing signs of before you got insurance.
- A malicious act, deliberate injury or gross negligence by you or even someone living with you.
- Treatment for diseases for which there is a known vaccine. This includes conditions like kennel cough and parvovirus.
- Preventative treatments and procedures such as vaccinations or flea/tick control, unless you have routine cover included.
- Behavioural problems or any conditions caused by behavioural problems.
- Breeding or pregnancy, or any conditions resulting from these.
- Grooming, including shampoos, baths, dips or any cosmetic surgeries.
- Training, socialisation and any alternative therapies.
- Pet food or supplements, even if they've been recommended by your vet.
- Organ transplant surgery, artificial limbs or prosthetics.
- Dental procedures or dental diseases. Some insurers offer specialist dental cover, but this isn't very common in Australia.
Some common questions about pet insurance
Picture: GettyImages, Unsplash
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