Many people are searching for places to make savings as the cost of living crisis bites deeper. For pet owners, one monthly expense under scrutiny could well be their pet insurance premiums…
Whether your clients have pet insurance and are thinking of cancelling or downgrading, or have never wanted a policy, the cost of not protecting pets can be significant – financially and emotionally.
Some pet owners may decide to “self-insure”, putting what they might have spent on premiums into a separate bank account and creating a pot of, perhaps, £600 per year. Sadly, in the event of a serious injury caused by a road traffic collision (RTC), for example, or the onset of a long-term condition, this money will not go far and could lead to heartache further down the line if the owner doesn’t have access to additional funds, and has to consider suboptimal treatment, rehoming or even euthanasia.
Reluctance to take out insurance may be more than simply a budgetary consideration. A previous bad experience of pet or other insurance may colour an owner’s opinion. Likewise, simply not having all the necessary information to hand may lead to a pet owner not being aware of the differences between different types of policies and cover.
And, let’s be frank: pet insurance is confusing. With so many companies and types of policies offering such a range of benefits, exclusions and premiums, it can be very daunting for owners. As a veterinary professional, having an insight and understanding of the options, benefits and pitfalls of each type, and alternative approaches, can help ensure this important decision is made based on facts.
Exclusions
Exclusions are the crux of the difference between one policy type and the next. However, all policy types have a common feature – most insurers will exclude (not cover) any conditions or ongoing issues that began before a policy was taken out with them.
While some providers will cover pre-existing conditions, this is currently unusual. While as consumers we are encouraged to shop around annually for the best prices for other types of insurance, the exclusion of pre-existing conditions is why switching companies is not recommended for pet policies without carefully reviewing the small print.
Other exclusions are based on how long or how much an issue will be covered for. And this is the main differentiator from policy to policy.
Accident only
This is the most basic type of pet insurance. It only covers injuries from accidents such as an RTC, fall or cut, so illnesses are not included.
Usually, each injury will cover up to a certain amount of vet fees, to be claimed usually within a limit of 12 months. Being the most basic, this type of policy is also the cheapest.
This kind of policy would cover a broken leg from a rabbit hole, but not a skin condition, for example.
Non-lifetime cover
These types of policies generally fall into two categories:
Time-limited
With a time-limited policy, owners can claim for an illness or injury for a set period only – usually 12 months. Providing the policy is renewed without a break, this can normally cross two policy years, but once 12 months has elapsed from the onset of the illness or accident, further treatment costs can’t be claimed.
A cap is also likely on the total amount of veterinary fees that can be claimed during that 12-month period. Once the end of 12 months’ time-limited cover is reached, it’s unlikely an owner would be able to claim for that condition again – even with insurance from another provider – as the condition would be classed as pre-existing.
Time-limited policies are most suitable for when short-term, lower-cost treatments are required. For example, this policy would cover treatment for epilepsy for 12 months only, and up to a certain amount of cost, after which the owner would need to pay 100% of all costs for that condition.
Maximum benefit per condition
This type of policy offers greater scope for treatment than a time-limited policy, with a veterinary fee benefit level per condition. Owners can claim up to this amount – say £2,500 – for every individual condition and carry on claiming until that amount is used up – for as many years as it is necessary, providing the policy is continued with no break.
As with time-limited policies, once the monetary limit is reached, it is unlikely an owner will be able to claim for the condition again under that policy or any other, as it would be classified as pre-existing.
Maximum benefit polices are best suited to lower-cost claims. For example, this policy would allow an owner to claim for their cat’s diabetes treatment until they had used up their vet fees allowance for it – say £2,500. This could be over more than 12 months, but once the £2,500 has been paid, the owner would be responsible for any further costs.
Lifetime cover
Lifetime insurance is the most comprehensive form of pet insurance available and, as a result, is usually the most expensive as it’s likely to cost the insurer more in terms of the claims it settles.
In exchange for a higher premium, owners get long-term peace of mind because, for as long as the policy is active, owners can continue to claim for the same issue indefinitely. The only restriction is the annual veterinary fee allowance you’re given – which is as high as £15,000 or more with some providers.
This amount is effectively refreshed every year the policy is renewed, ensuring owners have plenty available towards vet fees, should they need to claim.
Lifetime policies really prove their worth when a pet develops a long-term condition – such as arthritis or diabetes – that requires treatment over many years. For example, if a dog were to develop arthritis aged 7 years old and required ongoing treatment until 14 years old, providing the policy is kept up to date, the condition would be covered year after year, with claims possible up to the maximum vet fees cover – say £10,000 – every year.
Excess
Understanding the excess element of a pet insurance policy is also crucial in choosing one that’s right. All policies have an excess payable when a claim is made, but how they’re made up can vary.
Fixed excess
This is a set contribution that the pet owner must pay towards every claim made. This is usually payable once per condition, per policy year. So, if you need to claim for the same condition over more than one policy year, you will normally be required to pay the fixed excess amount for every new year of your policy.
Variable excess/co-insurance
This is often an addition to the fixed excess. In many cases, owners can choose whether they want to opt for a higher or lower percentage they contribute to each claim when setting up their policy. Opting for paying a lower excess per claim will deliver higher premiums; if an owner chooses to pay a higher excess, premiums will be lower.
Additional benefits
As well as providing cover for vet bills, pet insurance policies can also pay for other aspects of pet ownership. Often, these benefits are flexible, so owners can choose what they would and would not like to cover. Obviously, the more that’s covered, the more the policy will cost. These can include the following.
Third-party liability
Having a policy that includes third-party liability is very important for dog owners. This will pay out if a dog injures someone, damages their property or causes an accident, such as should it run out into the road and cause a collision. Usually, this covers legal costs, expenses and the claimant’s expenses, which can be significant.
Cattery and kennel fees
Cover for this will kick in if an owner is hospitalised and no other option exists but to put their pet into a cattery or a kennel to take care of them.
Euthanasia, cremation and burial
These costs will be taken care of if included as part of the policy.
Death by accident or illness
If the animal dies, this cover enables the owner to claim back the cost of what they paid for their pet. This is usually only available until a pet is certain age – most often around seven or eight years old.
Dental cover
Usually, some element of dental cover is included in a pet-insurance policy. With many, this is limited to dental treatment required as a result of an injury; therefore, not covering dental disease. Those policies that cover dental disease, as well as injury, will usually require the pet to have had dental check-ups annually, so any issues can be identified early. Pet insurance will not normally cover routine dental care, unless it is recommended to treat an issue and is recommended by a vet (so, not elective or cosmetic procedures).
Missing pet cover
This will include cover for the costs for advertising a pet is lost or stolen, and the cost of a reward (up to a limit).
Overseas travel cover
Should a pet fall ill, be involved in an accident or need veterinary treatment while abroad with their owner, this would be covered. Sometimes, this can include compensation for cancelled holidays because a pet has become life-threateningly ill as the owners were due to leave.
Summary
Undoubtedly, the pet-insurance world can be a confusing place for pet owners. It is understandable that they may decide that the cheapest insurance policies – or not taking out insurance at all – makes sense in the current uncertain economic climate.
However, trying to save money on pet insurance can prove not just financially costly, but heartbreaking. Armed with the facts, pet owners will be able to make the best choice for themselves and their pets.
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