Does pet insurance make financial sense?

• Oliver Jones
• 26th October, 2016
• Household & Family

Britain is a nation of pet lovers. We share our homes and our lives with dogs, cats, guinea pigs, tortoises… even giant lizards. But owning and caring for a pet can be an eye-wateringly expensive hobby with vet bills for even minor operations running to hundreds of pounds. For many, the answer is pet insurance and the security in knowing that should your pet fall ill or have an accident, there will be somebody there to pick up the tab when you can’t afford to. But insurance is not cheap with monthly premiums which can sometimes be large plus excesses when you do have to make a claim.

So, if you do have one or more pets and you’re concerned about paying for their care, should you consider pet insurance?

What does pet insurance cover?

There is a myriad of things that pet insurance covers and plenty of conditions that it doesn’t. Most pet insurance coverage is dependent on the breed of animal so you should start by comparing policies that cover your particular pet.

• Most insurance policies will cover: vet consultation fees, diagnostic tests, surgery, medication and treatment.
• Virtually every pet insurance policy will not cover any existing or hereditary conditions or dental work.

You need to read the small print on each policy because they can vary considerably. Hereditary conditions are difficult to define so before you take out a new policy you should discuss this with your vet if you have any concerns about your pet.

While most pet insurers will cover most of the most popular household pets, you may need to find a specialist insurer if you keep anything more exotic like a parrot or a lizard. Large breeds – often classed as livestock and including horses and goats – may only be covered under special policies or by specialist insurers.

Finding the right insurance for your pet

Prices vary a lot so you should shop around if you are thinking of insuring your pet. Both moneysupermarket.com and comparethemarket.com have price comparisons for the leading pet insurers and you can specify the breed, age and any existing conditions for your pet.

For example: the cheapest quote we could find for a 12-year-old cat with no pre-existing conditions was £2.57 a month with an excess of £45. This figure covered accidents only. The most expensive quote for the same cat was £61.87 a month for lifetime cover, an excess of £60 and a maximum payout of £10,000 a year for accidents, treatment or surgery.

Most vets will recommend that you take out insurance particularly if you are on a lower income and might struggle to pay for surgery after an accident. Costs can quickly escalate and it is not uncommon to be confronted with a bill for £5,000 or more if your pet has been badly hurt by a vehicle. Vets are also keen for customers to take out insurance because it makes it much less likely that a loved pet will have to be put down after an accident or if it contracts a serious illness.

Most pet insurers and the majority of vets will be happy to receive or make direct claims after treatment. That means that you will only have to pay the excess on the policy rather than having to stump up the cash and then try to reclaim it from the insurer.

Are there any alternatives?

Not everybody wants to take out insurance but it remains the most cost-effective and planned way to pay for the unexpected. If you do go down an alternative route, then you will need to be pro-active.

Research your pet’s breed and find out what the most common ailments and illnesses are. If hereditary illnesses seem likely, then call your vet and find out what the rough cost of treatment would be. Factor in to your calculations illnesses which might require a course of antibiotics (cost £50 or more) and vet consultation fees (commonly between £35 and £70 per visit).

Once you’ve got these figures, then you can think about creating a savings plan based on monthly contributions. But you might also need to pump prime your savings plan with a large sum to cover the cost of any treatment while you build up a healthy balance.

Finally, shop around for the best rates of care locally. Vets charge different amounts depending on the areas they serve so it’s worth calling around to check prices for different types of treatment.

The only other way to cover the risk is to “self-insure” which effectively means putting a sum of money aside each month into a “pet fund”. Then should you need to fund medical bills the fund is available for you to draw upon. Failing that a short term loan could cover you, but remember you’ll need to pay this off over time and the total cost will be more than you’ve borrowed.

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