Should you save for vet bills ...or take out pet insurance?

WHAT goes up but never comes down? The traditional answer is ‘age’, but it also applies to pet insurance premiums. They always rise and never fall. The issue is now relevant to 17million UK pet-owning homes – more than three million of which have acquired a pet since the pandemic struck in March last year.

Age is a factor in the costing of pet insurance because providers increase premiums to reflect the fact that older pets have more health issues. But increases in veterinary costs are another price driver, as is the tendency for most insurers to hike premiums after a claim has been made.

The result is that many are experiencing annual premium increases of more than ten per cent – while the cover they have is also gradually reducing.

The initial proportion of the claim they pay themselves, known as the ‘excess’, has crept up to £100 or £125, while once pets reach the age of eight, most policyholders also have to pay a proportion of each claim – often 20 per cent.

Some insurers are now extending this ‘co-payment’ requirement to pets of all ages. Decent quality cover can cost at least £150 a year for a cat and £300 a year for a dog. And for breeds prone to health issues, for example a French bulldog, owners could be looking at several times that.

One alternative to pet insurance is to save money to meet vets’ bills. But this requires financial discipline. Beware. It’s easy to underestimate the amounts needed.

For example, treating a dog’s dislocated kneecap can cost around £4,000 while the average pet insurance claim currently exceeds £800.

Paying bills as they come – without insurance – will also not protect you from a big public liability claim if your pet dog causes injury to another party.

Dog policies typically include £2 million cover for this.

So, despite ever higher premiums, pet cover does have its merits. It provides peace of mind against large claims – and it is still possible to find a good deal if you’re prepared to do some homework. But there is no shortcut as cover varies widely between insurers.

Market leader Petplan, one of the few insurers not to include its policies on popular comparison websites, offers broad cover – and is unusual in not increasing premiums in response to claims. But it is not the best option for everyone.

Rose Howarth, head of pet insurance at comparison website Moneysupermarket, says: ‘When you get a puppy or kitten vaccinated, the vet is likely to ask if you’ve got insurance. They do this because they will want to sell you a policy.

‘But most vets are connected to one provider. I advise that people should do their own research before they even get a pet.’

Some new entrants are shaking up the market. For example, Waggel offers free consultations with vets, behaviour specialists and nutritionists – and a choice of five different excess levels up to £250.

Meanwhile, Bought By Many has an exceptionally high £15,000 vet fees limit.

Most insurers offer a choice between lifetime policies that pay out indefinitely on conditions up to a stated limit each year – and plans that stop paying for a specific treatment, either after 12 months or once a pre-determined monetary amount is reached.

There are no brokers to help pet owners compare insurers’ plans.

But consumer ratings agency Fairer Finance provides a useful guide based on customer experiences at fairerfinance.com.