Pet insurance: Recommendations on what to look for

Get the lowdown on what to consider when making decisions about your pet’s vet expenses.

Our beloved pets are genuine members of the family and most of us will do anything in our power to help them recover when they are suffering from poor health. Unfortunately, there is no way to rule out that our fur babies will become seriously sick or injured one day, and although modern vets have amazing technology to help them get better, the financial costs can be shocking.

Pet insurance can be a cost-effective way to provide a safety net for unexpected expenses which can sometimes run into thousands of dollars. But with all the options available on the market, the information overload is enough to make your head spin. Instead of choosing your pet insurance on the basis of a lucky dip, take your time to choose the policy that is likely to be most useful for your four-legged friend. Here are some tips on what to look for when weighing up your options.

What does pet insurance cover?

Depending on the kind of policy you buy, as well as your pet’s age, breed and other factors, you can be reimbursed for a major percentage of the veterinary treatment for illness or injury. This typically ranges from 70% to 85%, and an excess may also apply. Some insurers cover 100% of the bill minus an excess that is agreed upon – so if you’re covered for 100% reimbursement with an excess of $150 per claim and the cost of treatment is $1,200, you only pay $150 of that. One downside of an excess compared to a percentage split is that if you pay $155 for an eligible treatment, continuing this example, you will only receive $5 back.

Equine insurance is also available for horses and some specialist insurers will cover other animals as well, but for all intents and purposes, pet insurance in Australia is available for domestic dogs and cats only.

What types of pet insurance are available?

There are three broad categories of pet insurance available in Australia.

Accident only insurance

The cheapest option is accident only cover, which will reimburse you for eligible treatment costs of broken bones, burns, snakebites and similar problems. Depending on the policy you choose, you will usually receive between 70% and 85% of eligible vet bills, and there might be an excess applied as well.

Accident and illness cover

Adding illness cover in an accidental and medical policy increases the cost of your premiums but means you will be covered for a much wider range of ailments. While all insurance policies have a minimum starting age – usually eight weeks – most insurers will not let you commence covering your furry friend for illness after its ninth birthday.

Your insurance can still continue for the lifetime of your pet if you started the policy when it was young and renewed it without a break. In this instance, some insurers will still agree to cover your pet if it develops a long-term illness such as cancer. However, exactly what “lifetime cover” entails can be very different depending on the insurer. If you are worried that your pet might need to be insured for ongoing conditions in its old age, make sure you understand precisely what your insurer means by this.

Comprehensive insurance

This is the most expensive type of cover. Comprehensive insurance is often sold with a range of optional extras, ranging from routine care cover to dental plans that can be added on.

What should I look for when comparing pet insurance?

It is often noted that the multitude of pet insurance products on offer in Australia are underwritten by a very small number of parent companies. One result of this is that the list of exclusions for most insurance products are often very similar. Despite this, there is an incredible spectrum of choice regarding the specific benefits you may receive, the yearly payout limits and sub-limits, and exactly what your cover extends to.

Insurance policies are not created equal. This does not automatically mean that some are better, across the board, than others; the point is, each offering comes with its unique set of pros and cons. The key to getting your money’s worth is to strike the best balance between the premiums you pay and the practicality of the benefits you are likely to receive.

Factors to consider when choosing pet insurance

  • Multi-pet discount. Many insurers offer a discount on your premiums for the second pet you cover, as well as each subsequent pet. However, some offer other perks instead (such as covering you for home visits), which can be more valuable if you only have one animal companion.
  • Routine care. Pet insurance normally doesn’t cover routine check-ups or vaccinations, unless you purchase optional routine care as part of a comprehensive policy. The value you get for your premiums varies widely from insurer to insurer, and how much you can be reimbursed for each category is different depending on your policy, so read the fine print!
  • Contagious diseases. Most insurers won’t cover your pet for any disease it can be vaccinated against, ranging from Feline Immunodeficiency Virus (FIV) to kennel cough. However, some policies will reimburse you for treatment if you can show that your furry friend’s vaccination history is fully up to date.
  • Your pet’s age. Although most insurers will only reimburse your vet fees for accidental injury if you buy cover after your furry friend’s ninth birthday, some policies stipulate that your premiums will increase after your pet reaches a specified age, such as five or seven years.
  • The breed of your pet. The age at which your premiums can increase varies from breed to breed. Also, if your pet’s breed is known to suffer from specific health issues, such as dental problems, for example, then a comprehensive policy with optional dental cover might be a wise choice.
  • Pre-existing conditions. This is an entire class of exclusions on your policy, and it’s notorious for causing both confusion and rejected claims. Bilateral conditions are also counted as pre-existing, meaning that if your dog has an ear infection in its right ear, for example, it will not be covered for the same problem in its left ear. Related conditions also come under this heading, meaning that if your pet was treated for arthritis in its hip, then a subsequent diagnosis of an arthritic shoulder will not be covered.
  • Tick paralysis. This is typically included as an additional benefit with pet insurance for illnesses, but the applicable sub-limits can vary greatly. If you live in an area of high paralysis tick activity, it might be wise to choose a policy with a greater maximum annual reimbursement.
  • The definition of lifetime cover. Most policies will continue to cover your pet for chronic illnesses such as cancer as long as this was diagnosed after the waiting period elapsed, on the condition that you always renew the policy without any breaks. However, some cheaper policies define “lifetime cover” as simply continuing to insure your furry friend after its ninth birthday – after that, any recurring conditions will be deemed pre-existing once your policy comes up for renewal.

Tips on comparing pet insurance policies

  • Make a list. Write down what’s important to you and what kinds of health conditions you are most concerned about. For example, if your four-legged friend had a broken limb before you purchased cover, check whether this injury is considered completely curable, and if so, how long before it is no longer counted as pre-existing.
  • Talk to your vet. It is not legal for your vet to recommend a specific insurance policy but they can give you a professional opinion about the health risks that are most likely to affect your doggy or moggy.
  • Narrow your options. Once you have a general idea of what you’re looking for, choose a shortlist of insurers that offer the best value for their premiums. Familiarise yourself with the PDS of your top five or six policies and obtain quotes so you can make an educated calculation about what you will need to pay annually, compared to the benefits you will be eligible for.
  • Stay objective. Read reviews and testimonials about the policies on your shortlist, but try to stay balanced when reading people’s opinions. It is both understandable and unfortunate when a disgruntled customer complains that their claim was refused, but the onus is on the policyholder to read the fine print. So if it turns out they tried to claim for something that was clearly listed among the exclusions, you can’t really blame the insurer.
  • Do the maths. Once you have a quote, add up what premiums you will need to pay and compare this to the benefits you are eligible to receive. As one example, some routine care plans cost only $25 or so less than the maximum you can possibly claim, if you manage to avail yourself of every single benefit they provide. That said, if you have four hungry pooches who all need prescription diets, that’s $100 back in your pocket each year, or more if you have insurance with multi-pet discounts.
  • Think about your expenses. It’s important to offset how much you can save against the outlay of your premiums. You might pay $440 per year for a standalone wellness program, but this can include a $200 refund for dental treatment, plus free vaccinations and up to 20% discounts for pet food. So although the initial expense might seem rather hefty, it’s quite possible that when you add up the savings, you will end up paying much less than you otherwise would, just to keep your animal buddy in tip-top shape.

Pet insurance pitfalls to be aware of

Besides the benefits you are eligible to receive, you also need to be mindful of the exclusions of your policy, the biggest category of these being pre-existing conditions. It is true that the list of exclusions is similar between many different brands, but just because you’ve read one product disclosure statement (PDS) doesn’t mean you’ve read them all.

One example is that having a vet visit you at home is specifically excluded by most insurers, but not all of them. Another is that infectious diseases are normally not covered, even if your pet is vaccinated against them. But some insurers will pay eligible claims if your furry friend contracts a disease for which all their vaccinations are up to date.

While exclusions, by and large, can be the most problematic traps for policyholders, another potential pitfall is the fact your premiums are likely to increase after your pet reaches a specific age. While insurance companies are obligated by law to inform you of this, in practice there are loopholes which enable them to skirt around making this information prominent.

One way to avoid getting a nasty surprise when your policy comes up for renewal is to ask your insurer’s customer service team about how the fee structure will change as time goes on. Rather than phoning them, communicate by email where possible, so you can keep a record of everything in writing.

Take a close look at the fine print

Even if you’ve done your homework with the utmost diligence, you might still find something in the certificate of insurance that you didn’t expect. Don’t feel pressured into keeping your policy if you did not receive the cover you believed you were paying for. Most insurers offer a cooling-off period, usually 30 days, during which you can return your policy if you haven’t made a claim.

You might be charged for “administrative expenses” and/or pro-rata coverage for the time your policy was in force, but that’s still likely to be a lot cheaper than finding out you’ve been left high and dry when it’s too late.

Top 10 most common pet medical conditions and total cost of claims, ranked by number of claims by the RSPCA, 2014–2015

DiagnosisNumber of claimsTotal claim amount
Otitis externa (outer ear infection)3,189$441,049
Skin conditions2,438$312,249
Arthritis2,417$237,141
Cruciate leg rupture1,874$1,415,869
Conjunctivitis1,633$163,783
Ear infection1,560$207,548
Lumps (inc. tumours)1,390$430,090
Dermatitis1,373$187,406
Gastroenteritis1,291$392,254
Ear conditions1,205$151,215

Compare pet insurance policies from Australian brands

William Eve

Will is a personal finance writer for finder.com.au specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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