Your Guide to Pet Insurance

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Although a pet may not cost much to buy, it can be hellishly expensive to maintain it in a good state of health. But is pet insurance worth the money? Personal Finance takes a pooper-scooper to what's on offer.

One in three pets in the UK will require treatment for illness or injury each year, and advances in veterinary treatment mean that sick and injured pets can often be coaxed back to good health. This is good news for pets and their owners - until the vet's bill arrives.

Vets don't use a standard fee scale, and costs vary widely around the country. For example, depending on where you live, it can cost between £250 and £2,000 to treat a dog with a broken leg and bills are getting higher. “Vet's bills are escalating,” says Alastair Cook, marketing manager of Petprotect. “This is largely due to the growth in specialist practice.”

Gail Quinn, director of brand for Sainsbury's, agrees. “Vets' fees are increasing by 10 to 12 per cent a year and, despite the rising health risks facing pets, only 12 per cent of dogs and 7 per cent of cats are insured.” So taking out insurance could save your pet and save you money.

CHOOSING A POLICY

Pet insurance, once riddled with clauses and exclusions, is becoming simpler to understand and easier to buy. Petplan and Petprotect are still the largest pet insurers in the UK, but low cost insurance is now available from supermarkets such as Tesco and Sainsbury's. Other providers to enter the market-place include Animal Friends Insurance.

It charges one premium for dogs or cats, regardless of breed or where they live in the country. The company doesn't take profits from the premiums it charges. Instead the money goes to animal welfare and environmental causes.

According to a survey commissioned by Tesco, only one in 12 pet owners has insurance. The main reasons for not having insurance were: it was too expensive, owners simply didn't get around to it, forgot, or didn't think it was worth it.

Insurance is not just for pedigree pets either. “Because of inbreeding, pedigree pets do tend to have more problems as there is a greater chance of inherited medical defects, but pet insurance is for things that you don't expect to happen, such as road accidents," explains John Bower, senior partner at a veterinary hospital in Plymouth and former president of the British Veterinary Association (BVA).

And while cost is an important consideration, cheapest isn't always best. Make sure that your policy does provide adequate cover and that the insurer will pay up when the chips are down. Bower recommends choosing a policy that provides adequate cover for medical conditions. This is around £2,000 for anyone outside London and up to £4,000 for Londoners.

“There are three key differences between policies," explains Petprotect's Alastair Cook, “and these all relate to benefits,” he adds. “First, you need to make sure you have ample benefit for medical conditions.” He suggests opting for a policy providing around £4,000 a year. “Second, you need to check limitations, for example the time period over which you can claim." If a policy limits a claim to, say, a twelve-month period rather than a financial limit, then you could run into problems if your pet develops an ongoing condition.

“The third consideration is lifelong cover," says Cook.

"Make sure you take out a policy you can renew each year even if you are claiming." John Bower agrees with this. “Don't touch a policy that doesn't give you lifelong cover. Ask your vet to recommend a company which she or he has a good opinion of. Vet's have experience of insurance companies and get to see the ones that fulfil their promises and the ones that don't,” says Bower.

HORSES

Insurance for horses and ponies is essential. Vet's bills can be huge and if you lose a horse through illness or accident you will have to pay to replace it. Insurance will also cover your tack and equipment up to a specified limit. The same exclusions and limits apply to horse policies, but limits tend to be higher. For example, Petplan will pay up to £5,000 per incident to cover vet's fees. The policy also includes £10,000 per annum personal accident cover and £1,000 per annum dental cover. So if you have an accident while riding your horse, you too will be covered. Obviously, premiums are higher. Expect to pay around £100 for every £1,000 sum insured.

Your local riding stables or vet will be able to recommend a good policy. See below for contact details.

OTHER ANIMALS

If you have more exotic tastes in animals, you'll still need to consider insurance. Unusual birds and animals are particularly at risk of being stolen as, more often than not, they're quite valuable. If you belong to a club or association it should be able to recommend suitable insurance. See the contacts box opposite for contact details of specialist insurers.

IS IT WORTH TAKING OUT INSURANCE?

Many pet injuries and illnesses can now be treated and insurance does enable vets to carry out more complex procedures, so there is a good chance your pet will be saved. “Pet insurance costs only around £2 a week - about the same as a pint of beer," says Bower. “There is nothing more distressing than seeing a sick or injured animal and knowing that the owner can't afford to pay for treatment.”

Pet Insurance will help to lift the financial burden if the worst comes to the worst, but as with all insurance, it's only worth having if you have to make a claim. If you have the means to foot a large bill then you may not need insurance. But if a large vet's bill would seriously affect your budget, it's probably worth paying the monthly premium. If you baulk at the idea of forking out yet more money to an insurance company, the alternative is to save some money each month in an instant access savings account. This can be used towards vet's bills and your money will be earning interest. But this won't help much if your pet falls ill one month after opening the account.

According to Bower, the most important features to look for are third-party liability and medical cover. All policies offer third-party liability between £1 million and £2 million. If you want high medical limit, consider Petplan and Petprotect. They both have a vet's fees limit of £4,000. Petplan charges £5.28 for cats and £8.85 for dogs. Petprotect charges £6.25 for cats and £8.91 for dogs. These policies offer lifelong cover too. Other policies offering lifelong cover are Animal Friends and Sainsbury's.

The over 50s should consider SAGA. It's medical limit is £2,000 and monthly premiums for cats are £2.56 and £5.25 for dogs.

WHAT'S COVERED

The cover available will depend on the level of policy chosen. Standard dog and cat policies will cover you for the following:

Vet's bills up to a maximum limit. Your policy should pay out for each course of treatment, including hospitalisation. Look for policies that offer lifelong cover. That means that if your pet is diagnosed with an illness that would require permanent treatment - such as a skin condition - your policy will pay out for as long as treatment is required for the remainder of the pet's life.

Pet boarding costs. Most policies cover kennel or cattery costs if the owner is taken ill and has to go into hospital.

Advertising and reward. Policies may pay for advertising and a reward if your pet is stolen or strays.

Death and theft. If your pet is stolen or dies due to injury or accident, most policies will pay out the purchase price or replacement value of the pet.

Third party liability. A policy will pay out if your pet causes damage or injury to another person or its property.

Holiday protection. Some policies pay out if you have to change your holiday plans because your pet is ill.

Some policies will offer added extras. Churchill, for example, has a 24-hour helpline. The helpline will give legal advice if needed, can help locate your nearest vet and will offer support if you are struggling to come to terms with the loss of your pet. Tesco too has a bereavement helpline. "This can be helpful if pet owners have to break the news to a child,” says Fay Hogg, a spokesperson for Tesco Personal Finance. Tesco gives a discount of 5 per cent if you insure more than one pet. If you take out a Deluxe policy with Primary Direct, the policy will pay up to £100 for travel to the vet and up to £300 for alternative treatments.

If you are taking your pet abroad under the government's pet travel scheme (PETS), you will need to find a policy that provides adequate cover. Our table on page 71 gives costs of pet travel insurance.

WHAT'S NOT

As with all types of insurance, pet policies do have exclusions.

Excesses. You will have to pay an excess for some claims. This ranges from £25 to £80, depending upon the type of claim.

Policy limits. Some insurance policies will pay out a maximum figure in one year for vet's fees. Others will pay out a maximum per claim for illness or accident. Tesco, for example, pays up to £2,500 vet's fees per condition. Churchill pays up to £3,000 for each course of treatment.

Age. You may not be able to take out insurance for the first time if your pet is above a certain age. Petprotect, for example, will not insure specified dog breeds over six years old, or any other dog over eight years of age. It's limit for cats is ten years.

Pre-existing conditions.
If your pet has a condition before you take out insurance, this will not be covered. Similarly, if a condition is claimed for in one year, it may be excluded at renewal.

Routine visits to the vet, such as vaccinations, spaying, castration or nail clipping, unless they are carried out for medical reasons, will not be covered.

Holiday cancellation costs are generally paid out only for one named person and not holiday companions.

Watch out too for age loading. Some insurers will start to charge higher premiums once your pet reaches a certain age.

INSURING YOUR RABBIT

Sandra Willcocks from London has had her rabbit, Lucian, for just a few weeks.

“I was advised to take out insurance by another rabbit owner who said rabbits can get ill quite often. She'd had her rabbit for eight years and said she'd spent hundreds of pounds on her during that time,” explains Sandra.

“I chose Petplan because it was the only insurer I could find that would cover rabbits.” Sandra pays monthly premiums of £4.85 and there is an excess of £40 payable if she makes a claim. “I haven't had to make a claim yet, but there is an excess on the policy, so if I did claim I would have to pay the first bit.”

CASE STUDY

Protecting your pet

Tara, an eight-week old German Shepherd, was bought by John Murray of Esher in Surrey in 1984. John took out insurance with DBI, as recommend by the kennels. John soon had to make a claim when Tara jumped out of a window chasing a cat and severed a tendon in her leg.

When she was seven, Tara developed arthritis. She had to take anti-inflammatory drugs, which John feels may have caused other problems.

“When she was ten she developed Primeta - an infection in her womb. We had to have her spayed and, because of our insurance policy, we were able to pay for special anaesthetic, which helped lessen the risk of heart ttack,” explains John. When Tara reached 11 she became anaemic. Her blood was starved of oxygen and John had to drive her to Bedfordshire for specialist treatment, a round trip of 120 miles. “We were facing very large vets bills at this stage,” explains John. "Having insurance meant that we were able to do the best for Tara and managed to buy her a few years' remission.”

Sadly, Tara died when she was 12 years old. John has another German Shepherd called Charley, who he had got from a rescue centre. “We shopped around for insurance when we got Charley and ended up choosing Saga. We looked at benefits, premiums and excesses. Some policies were cheaper, but the excesses were higher,” John explains.

Londoners pay the highest premiums, reflecting the cost of London vets' fees. For example, a one-year old cross-breed dog insured with Petprotect would cost £106.92 a year in Bath and £151.71 in London. And pedigree animals will cost more than cross breeds. The same level of cover for a Great Dane in London would cost £338.04. The age of the animal will also affect the premium. For example, a one-year old moggy would cost £112.87 to insure with Petprotect in London, while an eight-year old would cost £153.90. If you want to spread the payments you can usually choose to pay your premiums in monthly instalments, but this can work out to be more expensive. Older people may benefit from discounts given by specialist insurers such as Age Concern and Saga.

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