Maybe it’s because of the time of year and I’m watching more TV, but gee there seems to be a lot of people trying to flog pet insurance at the moment. Everyone from the RSPCA to Woolworths appear to be trying to get a slice of the action. The ads roll out lots of cute kittens and puppies and bunny rabbits to tug on the heart strings, but in the cold light of day is pet insurance worth it?
Going back to first principles we insure stuff to transfer the risk to another party. That other party takes on the risk for a price represented by the premiums you pay. The insurer is saying that at any given time they think certain events won’t happen whereas you think they might (and don’t want to pay for the consequences if they do). Insurers can qualify the risks they are prepared to take on by applying loadings or policy exclusions….and that’s the fine print. Your decision to take out insurance then boils down to your opinion on whether the probability of an insured event occurring is high enough to warrant the cost of the premium.
Most insurers will offer a few different types of pet insurance from accident only through to the full bells and whistles, and the extent of cover will depend on what type you take out and any add-on options you elect to include. So what should you watch out for when choosing a pet insurance policy?
Considerations for Pet Insurance
- Pre-existing conditions. Part of the application process will involving disclosing any medical conditions your pet has a history of or currently has. The insurer may offer a policy but exclude covering any expenses pertaining to that condition
- Co-payment. Most policies will only cover 75% to 80% of expenses incurred in treating insured conditions
- Annual limits. Like human health insurance there will often be a cap on the amount an insurer is willing to pay each year for various types of treatment
- Premium increases. As your pet gets older, premiums will increase because the older a pet is the more likely they will contract something requiring treatment. You should also note that most policies can only be taken out before your pet turns 9. If you take out insurance before then they will be covered for their entire life
- Other exclusions. Due factors such as the likelihood of complication (and thus high vet bills) or frequency of claim some things such as pregnancy, grooming, and behavioural problems are often not covered. Also, make sure you carefully read the policy conditions pertaining to “preventative” treatment such as checking for ticks, annual vaccinations etc. You can get cover for preventative treatment but it’s usually as an add-on and you have to pay an additional premium for it.
So what’s pet insurance going to set you back? We ran a quote (in Jan 2017) with RSPCA Pet Insurance based on an 8 year-old, domestic short hair cat in NSW. Yearly premiums would be $366.88 for Basic Accident, $742.31 for Economy Accident & Illness and $803.94 for Ultimate Accident & Illness. I can take out optional Routine Care Cover as part of the Ultimate Accident & Illness policy which will pay out the grand total of $80 a year for check-up’s and vaccinations. I can hear my bank account rejoicing at the prospect of that huge reimbursement. Interestingly, the online quote doesn’t say how much extra that option adds to your premium. Let’s hope it’s something less than $80 a year! Premiums will be cheaper for younger cats, but this give you a ballpark idea.
Do we insure Pussa & Soph? No. Mr Pet Parent and I choose the “self-insure” option. Since they are indoor cats we consider the probability of them being in an accident very unlikely, and as far as illness goes we will have to take our chance since their genetic history is a mystery. Part of the consideration around pet insurance is having a clear idea of what treatment you would want for your pet if they contracted a terminal illness or had a bad accident. Everyone is different in terms of what they can afford, are willing to fund and what they feel is an acceptable quality of life for their pet. There’s no easy answer to that and maybe you only know the answer when you’re confronted with the situation.
The bottom line is, like all insurance covers, to go into it with your eyes open. Know what you’re covered for and what you aren’t, and decide whether the likelihood of your pet suffering an insurable condition is likely enough to warrant the expense of cover. But, do yourself a favour and keep your cat as an indoor cat. That’ll reduce the need for cover enormously.