Guide to Pet Insurance

Introduction

Pet insurance is one of the fastest-growing types of cover now being sold in the UK, with more than 1.5 million policies now being sold each year. Sales in the past decade have almost doubled, according to the latest figures.

Not surprisingly, more and more insurers are trying to tap into a huge market: the UK's army of domestic animals – 8.2 million cats, 7 million dogs and 2 million rabbits, not to mention tens of thousands of horses and ponies, plus more exotic pets.

The result is that there are now more than 400 policies available, at prices ranging between £60 and £300 a year for the most common pets.

Do you really need pet insurance?

That depends on how you feel about your pet.

Generally, for the first few years of their lives (seven or eight in the case of dogs and cats), insurers face relatively minor claims experience from pet owners. The picture changes dramatically after a pet reaches a certain age.

At that point taking a pet to see a vet can become costly:

• A hip replacement for a dog can cost up to £3,500
• Care for a cat badly hurt in a car accident can cost £2,000
• Bowel surgery and subsequent hospital care for a dog that has eaten a sharp object can cost up to £2,000

Costs are rising fast: according to one report, vets’ and surgeons’ fees are rising by more than 10 per cent a year, per year.

Why does animal medical care cost so much?

The increasing sophistication of treatment and the need for vets to invest in more expensive equipment has driven up fees.

Meanwhile, consumers with pet insurance are less bothered by the high prices charged by vets.

The result is a spiralling increase in the cost of insurance – and in the cost of treatment for the pets of those who are not insured. Indeed, Petplan, one insurer, estimates that up to one third of all owners eventually claim on their pet cover.

Not everyone is willing to pay this amount of money.

Research by Saga, a financial company specialising in the over-50s, found that some 23 per cent of owners said they would consider having their pet put to sleep if its treatment cost more than £1,500.

However, the spread of cover in the past few years suggests people are becoming more sentimental about their pets. Indeed, there are many cases of individuals who have taken out cover for their favourite pets but fail to do so in the case of their own death.

What is covered by pet insurance?

A typical pet insurance policy will pay for:

• Vets’ fees, although the amount can vary widely
• Third party liability, in the event of your pet causing an accident
• Compensation for accidental loss, death or theft
• Advertising and rewards for a lost pet
• Kennel/cattery fees if you are hospitalised
• Payment for holiday cancellation in the event of a pet’s illness

Buying pet insurance

Factors that determine your premiums:

• Type of pet: the rarer and more exotic the pet, the more you may be asked to pay by some insurers.
• Breed: some breeds are more prone to particular illnesses than others. They are also more likely to be stolen.
• Age: the older the pet the less willing insurers are to offer cover for it and the more expensive that cover is likely to be.
• Location: vets' fees vary, with London costs being among the more expensive.
• Previous illnesses: pre-existing medical conditions and claims experience: this is much the same as with human beings.
• Exclusions and excesses: the more you are prepared to pay yourself, the cheaper premiums will be.

Finding good cover

But here are some vital points to bear in mind when considering a policy.

• Shop around – the cheapest premiums can be four times less than the most expensive
• Don't assume, however, that cheapest is always best
• Check that premiums don't rise if you are forced to make a claim
• Make sure that the insurer does not exclude certain conditions that you may have claimed for in a previous period
• Check the time limit for ongoing claims: some insurers will only pay for treatment for a maximum of 12 months. Or they may exclude chronic conditions that repeat themselves over a pet's lifetime
• If you travel to Europe regularly and would like to take your pet, make sure your insurance covers foreign travel.

If you have cover and are considering making a claim

• Always make sure your vet tells you beforehand what the cost of any treatment is likely to be
• Always check with the insurer that it will meet a claim – try to write down the name of the person who advised you on whether your claim might be met. This will help prevent disputes later on.