Is there any point in pet insurance?
By Kate Saines
Unlike car insurance, it's not compulsory to have pet insurance and therefore many people do not bother.
In fact, the last recorded statistics compiled in a Mintel UK survey in 2007 showed just 22 per cent of pet owners had an insurance policy for their animal.
Although it's hard to retrieve exact data (there is not an accurate figure on how many dogs there are in the UK) it is still fair to say there are a very large number of pet owners who do not have insurance.
Talking to dog and cat owners, Myfinances.co.uk found that many people seemed to think an additional insurance policy on top of everything else they had to pay out was just too much of a drag on the monthly budget.
Instead they relied on being able to dip into their savings, using their credit card or simply having enough cash in their bank accounts to fork out for any unexpected treatment.
A dog owners view
Mick Rivers, a 74-year-old retired aircraft engineer, and owner of two dogs is one such example. He admitted he didn't bother with pet insurance.
This was because, he explained, when dogs were young they were unlikely to get that ill, and then when they grew older the insurance premiums became too expensive.
"I just put a set amount of money – roughly the same as I would put into a pet insurance plan - into an interest-paying building society account each month, and use it to pay any vets bills," he said.
"All my dog-owning friends do the same. Years of owning dogs has taught us this method is just as efficient as having an insurance policy."
Insurers view
You won't be surprised to hear, speaking to insurers it's a different story.
They warn that without insurance, which could potentially provide cover for thousands of pounds worth of vet's fees, you are putting yourself at risk of being in big financial trouble if your pet suffers a serious injury or illness.
Insurer, Esure, ran a poll and found pet owners will pay £6,995 on vets bills for their dog over its lifetime. This includes routine visits for injections, for example, as well as surgery and emergency treatments.
Meanwhile Sainsbury's Finance, which also provides pet insurance, revealed 56 per cent of vets interviewed as part of a survey claimed they had been forced to put down cats or dogs because their owners could not afford the cost of treatment.
And 88 per cent of vets, said Sainsbury's, had experienced situations where owners had rejected treatment or an operation because they could not afford to pay for it.
The vets view
Of course the insurers would take this stance. They are selling a product, after all. But we asked the British Veterinary Association (BVA) for a view and it strongly endorsed pet insurance.
Nicky Paull, past president of the BVA, said: "Should your pet suffer an accident or serious illness, your vet's bill may be an unforeseen expense.
"Pet insurance is clearly a sensible approach to ensuring this does not become a concern."
But, as with many financial products, many pet owners are put off buying insurance because of a lack of understanding. This problem usually arises with the health care aspect of pet insurance.
Carl Stephens, of pet insurer Petplan, agreed that because there were different types of policies, the choice often baffled potential customers.
He said: "This is an area we find confuses customers the most and some don't understand when they are buying a cheaper policy that they are only getting 12 months or maximum benefit as opposed to cover for life of their pet."
What's more, to make things even more complicated, you cannot even ask your vet for advice on the specifics of pet health insurance.
Mrs Paull of the BVA said: "It's not because they are being awkward. Under changes to the FSA, you can only seek advice on insurance from someone who has sought authorisation from the FSA or who is an appointed representative of a specific pet insurance provider.
"This catch-all regulation has left vets unable to give clear guidance on a range of policies."
So with the joint help of both the BVA and Petplan, which claims to have over 40 per cent of the pet insurance market share, we tried to get to the bottom of how the health care element of pet insurance works.
There are basically two types of policy covering the health of your animals.
Lifelong policies
There are lifelong policies, which cover your pet for their entire life. They provide you with peace of mind that any conditions your pet might suffer will be covered for the duration of the policy.
The BVA said this type of policy means your pet will be able to receive treatment, paid for under the policy, for any chronic illnesses from year to year. As long as you update your annual fee, you will receive the protection.
Annual policies
You can also buy annual, or 12 month, policies which are cheaper but need to be renewed every year.
Unlike the life policies, any condition treated during the year will not be covered the next year.
The BVA said these policies were not ideal for pets with chronic conditions.
Petplan also highlighted another policy, Maximum Benefit, on which policyholders can only claim for a condition until the cost of the treatment reaches the maximum benefit.
Limits are usually between £4,000 and £6,000 and once treatment for this amount has been received by the pet, nothing more will be paid out by the insurer.
The benefits of the lifelong plan are clear, but the BVA advises that whatever plan you choose it's important to read the terms and conditions.
Mrs Paull said: "The best advice always is to read all of the small print and be sure what you are getting for your premium.
"Shop around but be sure when you compare costs that you are comparing like for like policies as often the cheaper ones give less cover or are more draconian in their exclusions."
Petplan said vets' fees are the most claimed-upon area of pet insurance policies, making it an important area to consider when looking for a policy.
However, there are other areas pet insurance can cover. These include the cost of advertising and offering a reward if your pet goes missing.
And it could also cover the costs of complementary treatments, boarding kennels – should the owner need to go into hospital for example – as well as third party liability cover for dogs.
Of course, of utmost importance when you have a pet is the welfare of your animal. Darren Black, head of pet insurance at comparison website Confused.com, makes a very good point.
"Once insurance is in place, pet owners can avoid the chance of making a claim by ensuring their pet leads a healthy life where all of their physical and environmental needs are met," he said.
So, the message is, if you own a pet and whether you take out insurance or not, looking after your faithful friend really is the key to having full peace of mind.
Use the Myfinances comparison tables powered by Confused.com to find the best deal on all types of insurance.
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