Pet insurance traps

If it feels like pet insurance is a scam, it might be because you fell into one of the traps. Fortunately, it’s a lot easier to walk around those traps once you know what to look for in the fine print.

Read on to learn about 5 common pet insurance traps and how you can avoid them.

Secret #1: Australia's pet insurance market is dominated by just two underwriters

If it seems as though most pet insurance policies in Australia are quite similar, it’s because they are. Generally, you’ll keep running into two different types of policy, one from a company called MS Amlin, and one from Hollard Insurance Company. These are the insurance underwriters who create policies. These policies are then sold by a wide range of other providers, who might adjust certain features and set costs differently.

This type of arrangement is fairly typical of all kinds of insurance all over the world. The main difference is that Australia’s pet insurance market is a bit smaller than most.

This isn't necessarily bad news for two reasons:

• You can still shop around. The core policies might be similar, but it’s still a competitive market with many insurers. Once you know whether you like the MS Amlin or Hollard policies more, you can compare “like for like” plans based on price.
• It makes finding what you're looking for easier. With two main types of pet cover on the Australian market, it’s easier to compare them side by side, while still getting a good look at the whole picture.

This guide looks at the fine print of MS Amlin and Hollard pet insurance policies side by side, so you know what to look for, the pet insurance traps to watch out for in each, and which one you like more.

Secret #2: Be wary of age limits

Generally, most insurers won’t offer illness cover for pets over a certain age (typically around 9 years). As such, accident-only pet insurance might be offered as an alternative for older pets. However, they might be unlikely to get much use out of it as they slow down with age.

One of the notable exceptions is Australia Post, which has created a Bronze pet insurance package, based on a Hollard pet insurance policy. This policy has relatively low limits, but can cover pets for accidents and illnesses without any age restrictions.

If you’re looking for more effective cover, you may want to consider comprehensive accident and illness policies.

Secret #3: Don't be fooled by cheaper cover

With almost all pet insurance providers there are two main types of cover.

• Accidental injury only. Covers treatments for injuries that resulted from accidents.
• Accident and illness. Covers treatments needed as a result of accident or illness.

It seems simple enough, until you start thinking about the exact definition of “accident” and “injury”, or things like illnesses that were caused by accidents.

Generally, policies will have a specific definition for these terms, which can affect how you’re actually covered.

Sometimes, an accident might also exacerbate an existing illness or condition. For example, if a dog ruptures a tendon playing fetch.

You’d typically assume that this would be covered as an accidental injury, but a vet might confirm that the injury was not caused by a specific accident, but was instead the end result of repetitive strain over time. In this example, a ruptured tendon (accidental injury) might instead qualify as chronic tendonitis (illness).

In this case, you might not be able to claim under an accident only policy, even though you’d probably think you were covered. Having illness cover, in addition to accident cover, greatly expands your cover and the range of situations where you can claim.

Secret #4: Understand how accident and injury is defined

So what’s the difference?

While both are similar at a glance, they’re different in specific situations. For example Ms Amlin might not cover injuries resulting from a venomous snake bite.

There might also be differences depending on whether or not you can specifically identify the time and place where an accident happened.

For example, if your dog arrives home injured, and a vet confirms your pet was struck by a car, you might only be able to claim with Hollard, because you can’t identify exactly where or when it happened.

In this case, Hollard might initially seem more limited and specific, but might provide cover in a wider range of circumstances than MS Amlin.

Secret #5: Keep an eye on limits and percentage of vet bills covered

These should always be fairly clear and straightforward.

• Percentage covered. Many pet insurance plans will pay for a set percentage of vet bills, rather than covering all the costs. 80% is a fairly typical amount for comprehensive cover. You need to pay the remaining percentage yourself.
• Limits. This is the most that a policy will pay in a 12-month period. It’s usually around $10,000 to $15,000 for comprehensive plans. This will almost always be enough to cover the cost of needed treatments, but if your pet gets particularly unlucky, for example getting seriously ill and being hit by a car in the same 12-month period, it might fall short.
• Sub-limits: The limits are the maximum for your total policy, while the sub-limits are the maximum for specific treatments. For example, you might have a sub-limit of $1,500 for tick paralysis treatments. At other times, sub-limits might come as number of treatments, rather than a dollar amount. For example, you might only be able to claim one foreign object removal surgery per 12-month period.

Protect your pet - compare policies

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Name	Product	Accidental Injury	Illness	Paralysis Tick Benefit	Maximum yearly benefit	Reimbursement rate	Reimbursement Rate	Maximum Yearly Benefit
Woolworths Comprehensive Cover				$1,500	$24,000	80%	80%	$24,000	Woolworths has a price beat promise for similar policies. 1 year free VetAssist gives you instant access to vets online (valued at $199). T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
Vets Choice Elite Cover				$2,500	$15,000	100%	100%	$15,000	Get a 5% discount when you insure more than one pet.	Get quote View details	Compare	loading Fetching your data...
Coles Premium Cover				$2,500	$12,000	100%	100%	$12,000	Get 1 month free cover with promo code: 1MFREE. Ends March 31, 2021. Plus, Earn 10x Flybuys points per $1 spent on pet food at Coles Supermarkets. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
Knose Dog Cover				$25,000	$25,000	70%, 80% or 90%	70%, 80% or 90%	$25,000	Get cover for your pet.	Get quote View details	Compare	loading Fetching your data...
PIA Major Medical Cover				$1,200	$15,145	80%	80%	$15,145	Get 2 months free when you sign up.	Get quote View details	Compare	loading Fetching your data...
Bow Wow Meow Ultimate Care Plan				$3,000	$20,000	80%	80%	$20,000	Join and get 2 months free pet insurance for puppies. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
Kogan Pet Luxury Cover				$2,000	$15,000	80% or 65%	80% or 65%	$15,000	Sign up and get $50 Kogan.com Credit. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...
PetSecure Accident and Illness Cover				$500	$12,000	75% or 85%	75% or 85%	$12,000	Your pet is covered for life.	Get quote View details	Compare	loading Fetching your data...
Petsy Dog accidental injury and illness cover (Vet Select)				$1,500	$25,000	100%	100%	$25,000	Enjoy 2 months free and personalised pet tag with promo code: PETSYPET. Petsy members enjoy free personalised gifts, exclusive pet discounts and perks for humans.	Get quote View details	Compare	loading Fetching your data...
Medibank Ultimate Pet Care				$1,200	$15,000	80%	80%	$15,000	Get 15% off pet insurance for the first year. Plus, Medibank health members save 10% every year after. Use promocode SAVE15. Ends February 15. T&Cs apply*. Find out more.	Get quote View details	Compare	loading Fetching your data...
RSPCA Ultimate Plus Accident and Illness Cover				Up to $20,000 annual limit	$20,000	80%	80%	$20,000	Get 1 month free for the first year of new policies. T&C's apply.	Get quote View details	Compare	loading Fetching your data...
Real Premium Accident & Illness Cover				$1,200	$12,000	80%	80%	$12,000	Get 10% of premiums back in the first 12 months.	Get quote View details	Compare	loading Fetching your data...
Guardian Platinum Accident & Illness Cover				$1,200	$12,000	80%	80%	$12,000	No joining fee to pay.	Get quote View details	Compare	loading Fetching your data...
Prime Sovereign Accident & Illness Cover				$1,200	$14,000	85%	85%	$14,000	With guaranteed renewal you can protect your pet for life.	Get quote View details	Compare	loading Fetching your data...
Australian Seniors Top Accident & Illness Cover				$1,200	$12,000	80%	80%	$12,000	If you're over 50 get 10% off.	Get quote View details	Compare	loading Fetching your data...
Guide Dogs Premium Care				$2,000	$20,000	85%	85%	$20,000	Get 1 month free pet insurance when you sign up for cover with Guide Dogs. T&Cs apply.	Get quote View details	Compare	loading Fetching your data...

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What other traps should I look out for?

A lower percentage covered, and lower total limits are clearly less comprehensive, but also typically cost less. If you can find significantly lower premiums with 75% pet insurance compared to 80%, it might be well worth it.

For sub-limits, however, you should make sure you understand them all, and that there are no deal-breakers. You can expect sub-limits for some treatments, like tick paralysis, routine care and other additional benefits like pet boarding cover, as well as limits of one or two foreign object removal surgeries per policy period.

With policies that cover alternative therapies, pet dental procedures and the like, you might also expect to find sub-limits.

However, if you start seeing low sub-limits for broader and more serious things like cancer, skin conditions or all surgery in general, you might be looking at a trap. Depending on your situation, insurers might set different sub-limits for certain conditions.

Exclusions, obligations and other fine print

All insurance policies have exclusions, which are situations where the insurer won't pay out. Some of the typical pet insurance exclusions are obvious, such as no cover for injuries caused by illegal dog fights.

Some of the main exclusions to be aware of in all policies are:

• Pre-existing conditions. Your pet is typically not covered for injuries or illnesses which became apparent before taking out cover.
• Infectious diseases and parasites. Infectious diseases, illnesses caused by worms and other parasites are typically not covered.
• Elective procedures. You can’t necessarily expect to be covered for any veterinary treatment of a specific condition.
• Complex treatments. Blood transfusions, organ transplants and certain other complex procedures are not necessarily covered.

Considered together, the policy exclusions and obligations highlight a few of the key differences between some Hollard and MS Amlin policies.

Generally, MS Amlin policies can cover certain treatments, like behavioural issues and dental procedures, that Hollard policies will not. However, if you want to claim those things, you are more strictly obligated to take certain steps to make sure your pet is healthy.

For example:

• Hollard. Australian Hollard pet insurance policies might not cover feline leukemia under any circumstances, regardless of whether or not your cat was vaccinated against it.
• MS Amlin. .Australian MS Amlin pet insurance policies might still cover feline leukemia, as long as your cat was vaccinated against it. However, if your cat is not vaccinated against any disease for which there is a known vaccine, where vets recommend that vaccine, any claim whatsoever might be denied.

Similarly:

• Hollard. Australian Hollard pet insurance policies may not cover pet dental treatments.
• MS Amlin. Australian MS Amlin pet insurance policies can cover pet dental treatments. However, you are obligated to pay for annual dental inspections, and follow your vet’s resulting recommendations.

Generally, you might be able to find a wider range of treatments covered under MS Amlin policies, but only if you meet your policy obligations. In some situations this might be difficult.

For example, MS Amlin policies may require you to arrange for a vet examination as soon as possible if your pet shows any clinical signs of injury or illness, otherwise subsequent payouts for related conditions may be reduced or denied.

However, MS Amlin pre-approves treatments over the phone, so you’ll generally need to pay out-of-pocket charges and then claim them back later, if possible. Similarly, you’ll still be required to pay for those treatments even if you’ve already reached the limits of your policy for the current 12-month period. This might leave you in a tough position.

If you don’t have the budget to pay out-of-pocket expenses for vet treatments that can only be claimed back later, or don’t think you’ll be able to keep up payments after reaching your policy limits in a year, then this might be a trap to watch for in MS Amlin pet insurance specifically.

How do the underwriters compare?

Generally, you might be able to enjoy significantly more comprehensive cover with MS Amlin pet insurance if you’re willing to contribute a little bit more up front for preventative care, and take care to meet your obligations.

However, depending on your situation, you might find Hollard pet insurance to be more cost-effective overall, with policy terms that better suit your needs. Hollard policies are also sold more widely, so there might be more room for multi-policy discounts, loyalty rewards and other bonuses.

The cover you find with each underwriter’s policies will likely be similar regardless of which provider you buy it from. However, you can shop around for varying limits, percentages of costs covered and premiums to suit your needs, as well as special features like the no-age-limit bronze cover from Australia Post, and other variations.

Picture: Getty Images