Seven things you need to know before buying pet insurance

We’re a nation of cat and dog lovers with an estimated 40 per cent of UK households owning a pet. This Saturday marks the start of National Pet Month. Celebrating its 28th birthday with events across the country and online, the main aim is to promote responsible pet ownership. The headline sponsor is Tesco Bank Pet Insurance and that should be a pretty big clue that the organisers encourage responsible owners to consider pet insurance.

As many of us know, having a pet can be a huge commitment – emotionally, practically and financially. As for the latter, a dog will cost its owner on average between £16,000 and £31,000 over its lifetime, according to data from the Association of British Insurers (ABI). Cats cost £17,000 and rabbits £9,000. It was also revealed the average cost of treating a cat after a road accident is around £875 and care for a dog with a tumour or growth averages £509. Yet despite these scarily high figures, analysis by the trade body found that only around a quarter of the UK dog population is insured, and only 15 per cent of cats.

But arranging adequate insurance for your beloved pet isn’t something that should be rushed into. It’s not as simple, or as cheap, as it used to be for starters. While pet insurance has been available in Britain since 1947, it didn’t become popular until the 70s, when the launch of Petplan enabled animal lovers to meet unexpected vet bills. All they had to do was sign up, pay pretty affordable premiums and excesses and when their pet got sick or was injured they weren’t left out of pocket. While Petplan still exists today and has become one of the most well-known policies on the market, its terms and conditions have lengthened and its cost has risen over time – as with all modern pet insurance.

There are now massive differences between the more than 400 policies available – mostly to do with exclusions. The Financial Ombudsman Service, which received more than 1,000 complaints about pet insurance in the year to 31 March 2016, warns: ‘Pet insurance policies are very popular but – like most insurance policies – they do not provide cover in every situation. A policy might include restrictions that may not be immediately obvious to the consumer.’ For example, a third of pet insurance policies do not cover loss or theft as standard, according to financial information service Defaqto.

While there are some common policy exclusions – such as pre-existing illness or injury – working out where to turn for the most suitable and affordable cover is a real minefield. You can only be really sure of what is and isn’t covered by any one policy by reading the small print, which can be extensive. But here’s a quick summary of the main differences between policies that the ABI thinks you should be aware of before you start shopping around.

1. Policies can pay out for: vet fees; third party liability (if your pet injures someone or damages someone else’s property); the purchase price of your pet (if lost, stolen, or dies prematurely); advertising costs to help find your lost or stolen pet; hospitalisation (the cost of caring your pet if you have to go into hospital for emergency treatment); holiday cancellation (because your pet needs emergency surgery); and overseas vet fees.
2. Common exclusions: pre-existing illness or injury; routine and preventative treatment (vaccinations, spaying, flea and worm treatments) and pregnancy and birth.
3. There are three main types of cover: lifetime cover, non-lifetime cover and accident only. Lifetime cover is the most comprehensive as it insures your pet for ongoing issues throughout its lifetime. Non-lifetime (also known as maximum benefit) policies exclude conditions once a set claims limit has been reached and as the name suggests, accident only doesn’t cover illness.
4. The age of your pet can be a significant factor in the price of insurance, with costs rising the older they get. The premiums could increase, as well as the excess. And some providers won’t offer new insurance above a certain age.
5. Be aware that while moving to a new policy may be cheaper, it is likely the new policy will not cover your pet for any conditions your pet has had in the past or currently has.
6. Some insurers will only accept claims after a certain number of days from the start date of the policy (an ‘exclusion period’) – usually ten days.
7. Always answer the insurer’s questions honestly and in full. If you don’t, the insurer may not pay your claim and your policy may be cancelled. And remember to tell your insurer about any relevant changes to your circumstance to ensure your pet remains covered. For example, any change of address or if your pet gets neutered, spayed or micro-chipped.

For more detailed information on pet insurance from the ABI, click here.

Laura Whitcombe is knowledge and product editor at ThisisMoney.co.uk.