What is pet insurance? – Forbes Advisor Australia – Forbes

Australians love their pets. Almost two thirds of Australian households have a pet, while 90% of us have had a pet at some stage of our lives.  

But the reality is that pet ownership can be expensive. After pet food, the cost of a vet accounts for the second largest category of ongoing expenditure related to pet ownership.  

The fact is that pet insurance is rising sharply. One report suggests that Australian pet owners are spending more than $2. 6 billion annually at the vet, up 19%, or some $414 million, since 2016.  

It also reveals that will on average, Australians are forking out $470 each and every year on vet services for their dog, and $261 for their cat.  

These results, which have been extrapolated from spend recall by pet owners, could be at the lower end of the scale, but provide an useful indicator on the rising costs.  

The hefty price tag associated with pet ownership is why so many pet owners tend to at least consider whether it’s worth getting pet insurance—especially as our cost-of-living increases.

What are Some of the Major Pet Insurers?

Over the average lifespan of a dog, pet owners spend more than $25, 000 per animal, on average, according to figures from the Australian Veterinary Association.  

The cost of dog ownership is generally much higher than owning a cat.  

There are endless pet insurers on the market to choose from. Some of the big players in this space include Real Insurance , Woolworths Comprehensive Plus Cover , Medibank Ultimate Pet Care , RSPCA Pet Insurance , Coles Pet Insurance , Petsy , and Pet Insurance Australia .  

How does Pet Insurance Work?

Pet insurance works like most other policies on the market. This is a type of insurance cover that will reimburse you for a portion of eligible vet treatments if your pet becomes sick or injured.  

Some insurance companies allow you to make a claim online, while other companies require you to make a call to start the claims process.  

It’s definitely worth considering. Common pet injuries can be more expensive than you probably think.  

The most common pet insurance cover on the market will provide insurance cover for your dog or cat. But you can also find cover out there for fish, birds, small mammals and even reptiles.  

Most companies provide a couple of levels to choose from, and will reimburse you for a percentage of eligible vet bills. You may be required to pay an excess, although some companies waive the excess.  

Pet insurance gives you the ability to claim up to a certain dollar limit, say $20, 000 per year, on vet bills, and you may be offered a discount for the second or even third pet insured, and so on.

Traditionally, pre-existing conditions have been excluded from pet insurance policies, although this is slowly changing. It’s worth asking the question of an insurer and reading the fine print before signing on the dotted line to understand what’s included and excluded from the policy.  

As CHOICE points out, one of the biggest issues with pet insurance is that you’re locked into your policy in case your pet develops a health condition.  

“If you switch, you won’t be covered for any pre-existing conditions while your insurer can change premiums plus introduce new restrictions with each renewal, ” the consumer group warns.

The Main Types of Pet Insurance Cover Are:  

Accident and illness: Whether your pet is in an accident or suffers from a disease or illness such as hereditary conditions or cancer, you’ll be covered.  

Accidents only: Basic cover that covers a portion of the cost of your pet if injured at the park, or hit by a vehicle, for example.  

Comprehensive: This is top-tier cover that will cover you for all of the above, and also other circumstances, such as the cost of ongoing care.  

When deciding on what type of cover suits you best, you should consider the kind of pet you have and whether or not they are likely to beed basic cover or a more comprehensive policy to suit continuing care.

If you think your pet will cost you more than the average, then it may be worth selecting comprehensive care, but , again, make sure it offers the kind of features your pet is likely to consist of and ensure you have adequate annual limits.

What Is Typically Covered?

A comprehensive policy will typically cover your pet for:  

• Accidents from snake bites, allergic reactions, car accidents.
• Illnesses with exception of an illness that could happen to be prevented if it was vaccinated or is part of a pre-existing condition.
• Pet hospitalisation, if needed.
• Emergency boarding fees.
• Paralysis.  
• Broken bones.
• Euthanasia.
• Medication.
• Boarding and care if you are unwell or unable.

What Typically Isn’t Covered?

A few things that are commonly not covered under pet insurance usually relates to preventative care:

• Routine check-ups
• Dental
• Vaccinations
• Desexing
• Behavioural problems: a good reason to select your pet carefully.
• Parasite control
• Pregnancy
• Grooming

How to Choose the Best Cover

Here are a few things to consider when selecting a policy:

• Maximum yearly benefit: The total amount the insurer will pay out each year.
• Range of features: Which conditions are included, in addition to what’s excluded?  
• Annual benefits: Are there extras and what are the limits for conditions such as tick paralysis?  
• Excess: Check the sum you need to pay on each claim. These can vary greatly.
• Dental: This is a common exclusion on policies, so check with your vet to comprehend if your pet is susceptible to tooth issues.
• Age of pet: If your pet is senior, bear in mind your options on policies will be limited.  
• Pre-existing conditions: If your pet already had a condition before you took out the policy, ask if it will be covered.  
• Exclusions: Routine treatments for conditions like pregnancy, vaccinations, parasite control and even desexing aren’t covered.
• Waiting periods: Check how long you will need to wait before you can make a claim.  
• Sub-limits: Some policies list sub-limits upon certain types of claims, such as a limit on cruciate ligament claims.  
• Optional extras: Some policies offer extras, like dental, which cost more. You will need to weigh up whether it’s worth it, depending on your dog and the likelihood of ongoing issues.  
• Does the vet offer “gap only cover” . This is a relatively new feature and involves the insurance company paying the vet directly, with owners only  paying any balance not covered by the policy.

Wait: do you actually need dog insurance?

This is the million dollar question that only you can answer.  

Some people argue that it’s better to physically put the money away each month in case of an emergency. But they don’t have the discipline and for them an enforced premium is the way to go. According to insurance underwriter, PetSure’s 2021 Foreign Pet Monitor Health report, the most common conditions affecting puppies under one year old contain, in order, gastrointestinal tract diseases; ear infections; eating foreign objects or toxins; skin diseases, including infections together with allergies; and traumatic accidents, including broken bones.  

As the table above indicates, vet bills can rise very quickly. So at least do your homework as to whether pet insurance is worth it for you.