Pet Insurance is big business and we are constantly bombarded with advertisements for different sorts of policies for our pets. This can be a bit confusing and the reasons behind the costs of pet insurance can sometimes be a bit baffling.
This article aims to enlighten the reader as to why pet insurance works how it does and what owners can do to make the most of it. The benefits and drawbacks of pet insurance are laid out clearly and terminology used by insurers is made clearer.
If you are thinking of insuring your pet, this article is a must read to ensure you pick the right policy for your pet and to prevent you getting caught out. So before you insure your pet, ensure you know the facts!
Companies often recommend we insure our belongings. Whether it be a washing machine or car, motorbike or house, the insurance premiums we pay aim to prevent us from having to pay out to repair or replace valuable items. Pet insurance is similar in many ways to other insurance products, but very different in others.
Many people find the thought of shopping around for a new policy or changing an existing one a daunting task. If you are armed with the right information the task should be painless and a ‘good deal’ easy to find.
Pet owners are not required by law to have their pet insured, but many people do for a variety of reasons. Listed below are some advantages and disadvantages of insuring your pet
- Spreads the cost of treatment
- Allows access to more expensive treatment that otherwise may not have been affordable
- Allows vets more clinical freedom to carry out diagnostic tests, ensuring a diagnosis is made as quickly as possible
- Referral to a specialist becomes a possibility, which due to high costs may not have been possible without insurance
- Some policies will pay out for acupuncture/physiotherapy/hydrotherapy which may be beneficial to your pet
- Some policies allow a certain amount of prescription food to be included in the claim which can save a lot of money
- Some pets may never need to claim off their policies, wasting years of paying premiums
- Some conditions may be excluded from policies
- Some insurers may dispute a claim
- Yearly premiums may rise
- Pedigree animals may be charged more
- Older animals may be charged more
- Owners are tied into monthly payments
Pet insurance started in the 1970’s with just a handful of companies offering the product. There are two general types of pet insurance, Life Cover and a time limited cover. Life cover ensures vet bills are paid for a pet’s illness throughout its life if it is a long-term condition such as diabetes.
There can be a maximum yearly spend on these types of policies. A time limited policy usually means that a condition diagnosed will be paid for up to a maximum of 12 months. After the first year the insurer then stops paying for that condition and it is excluded from the policy.
Consumers can expect to pay more for a Life Cover plan. The price of policies depends, among other factors, on the animal’s age, breed, gender, where it lives and whether it is neutered or entire.
One of the main reason owners buy pet insurance is in case an animal becomes injured or unwell. Many insurance policies have the added benefit of covering things such as third party liability, the purchase price of the pet if it is lost or stolen, advertising costs, boarding costs if you are hospitalised and sometimes even holiday cancellation costs if a pet’s injury requires it.
Each company calls their policies something different, whether it is ‘premium cover,’ ‘gold cover,’ ‘life cover,’ among many others. It is imperative owners read what type of cover they are paying for and that it suits their requirements. It is no use for instance paying for a life cover policy if you feel you would not want to treat your animal for the rest of its life, many owners do not want to do this and that is entirely their own choice.
What affects the price of an insurance premium?
Yes, but the increase to an insurance premium caused by age cannot be calculated. The increase is likely attributable to the insurance company’s awareness that older dogs are more likely to make claims due to age related illness.
Some companies claim to not alter the conditions of their policy if owners continue to insure their pets with them although this does not extend to changes in premium cost. Most insurance companies will not insure animals under 8 weeks of age and many have an upper limit on age for new customers. If an animal has been with the same insurance company for its entire life, the company may insure it until it dies.
There are many breeds of pedigree animals around and many of these have their own breed-specific health problems. Some of these have been caused by selective breeding for specific traits, others have been caused by careless breeding in previous generations. Whatever the reason, insurance companies know which breeds suffer from which problems and the likelihood of the problems occurring in your animal.
For this reason, certain breeds must pay higher insurance premiums. This ensures the insurance companies do not lose too much money on the animal. For example, Pugs and Bulldogs are predisposed to breathing problems, due to the nature of their head anatomy, therefore, insurance policies for these breeds are often more expensive than for a similar sized cross-breed.
Males and females often suffer from different medical problems. For example, a male dog cannot get an infection of the uterus (womb) like an un-spayed female can, likewise a female cannot get a testicular tumour like an un-neutered male can. It is with this in mind that insurance companies may alter insurance premiums according to the sex of the animal being insured. It is impossible to say how much of a difference this makes due to the many other factors taken into consideration.
Believe it or not, where an animal is registered as living may affect how much they pay for insurance. Insurance companies assess the risk of the animal’s environment and build it into the cost of the insurance. For example, a dog living beside a major road may have to pay more than one living down a country lane. The likelihood of the dog by the busy road being in a road traffic collision is far higher, therefore the insurance company want to adjust the insurance premium to cover that risk.
There are certain medical conditions associated with the reproductive organs of an animal, therefore if the organs are not present due to the animal being neutered, there is no possibility of the insurance company having to pay out to treat those conditions. Therefore, some people find neutering their animal brings down the cost of their insurance premium.
This is where pet insurance differs from any other type of insurance. If your pet has a pre-existing medical condition, an insurance company will not let you claim for it again, unless you have life-long cover and are submitting a continuation claim. (Obviously within your set financial limits). This situation causes a lot of confusion and anger towards insurers due to the fact that owners feel trapped in their policies. If an owner wants to continue having a condition covered by insurance, they must stay with the same company, who may put up premiums each year in order to cover their costs. If an owner switches to a different insurer, the pre-existing condition will be written off the policy. This state of affairs makes shopping around difficult.
What options do pet owners with pets that have pre-existing medical conditions have?
Most policies can be cancelled at any point unless clearly stated in the terms of the policy that payments must last a pre-agreed amount of time. If the owner still wants the animal to be insured and is unhappy with the price of their current policy, it may be wise to change insurance companies. Owners must be aware that the pre-existing condition will then not be covered by the new policy unless ‘agreed previously’ by the insurance company. It must be noted though that some companies say that if you cancel the policy before the usual 12 term is up, the entire 12 month’s premium must be paid if a claim has been made in that period.
Should owners disclose minor ailments?
This differs between companies. Honesty is always the best policy, but insurers will always ask to see the pet’s medical history should a claim be made. The pet’s medical history will detail any event/disease that may correspond to the current claim. If there is an indication in the animals clinical notes that the disease was present before the policy was taken out, it is very unlikely a claim can be made successfully for it. The responsibility of whether the insurance company believes the condition was pre-existing usually lies on the animal’s veterinary surgeon. He/she must use their clinical judgement in these situations.
With all this in mind, is it a good idea to take out pet insurance?
Essentially, pet insurance is a small amount of monthly outlay to protect yourself from a large and unexpected veterinary bill. From an animals’ point of view, by having insurance, they can be guaranteed the best care possible without as many financial constraints. From a veterinary practitioners point of view, clinical freedom is achieved when animals are insured.
The best possible diagnostic tests/surgery/medication are possible due to not having to worry too much about an owner not being able to afford the treatment needed. Treating insured animals can be a lot less frustrating as multiple tests can be done at once to find the animals’ problem, rather than finding the cheapest and most likely diagnostic test to come up with results. It must be stressed though that the vet must ensure that tests carried out are relevant and are in no way surplus to requirement/unnecessarily detrimental to the pet’s health and well being.
Factors that should be taken into consideration from an owner’s point of view are numerous. Firstly, can they afford the monthly premiums? If a monthly premium is extortionate it may just be easier to save the monthly increments and pay for a large vet bill upfront without insurance. The pet’s breed should also be taken into account, if the breed of animal is pre-disposed to many conditions, it may be worthwhile taking out an insurance policy with a higher claim limit, and/or a lifelong policy.
The amount of excess payable is also a factor, sometimes owners wish to claim on insurance, but the claim is for less than the excess – i.e. completely pointless! Owners should always be advised to read the policy document very carefully. Word of mouth is a good way of finding a good insurance policy, if owners know of people who have had trouble-free claims with an insurance company, it is likely they will have the same experience. Some insurance companies are renowned for being hard to claim from/have poor customer service.
Why is pet insurance getting more expensive?
- More expensive methods of treatment available
- Owners willing to treat more challenging conditions
- Vets willing to treat more challenging conditions
- Careless diagnostic work ups spending more money than necessary
- Willingness of owners to go to expensive referral hospitals
- Expensive prescription diets
- Rising cost of puppies and payouts for loss of value
- Raised awareness of inherited conditions
- Increase in inbreeding in some breeds
Are there any alternatives?
The only way to protect yourself from a large vet bill, other than insuring your pet is to save a little bit of money each month into a bank account specifically for your pet. This will ensure that you accrue a sum of money that is instantly available, should your pet need it. Unfortunately, the flaw with this method is that, should your pet need the money in the early years of its life, the money simply will not be there. A bonus to this method, is that should your pet not need any veterinary treatment throughout its life, you will have saved a sizeable sum of money!