A Beginner’s Guide to Pet Insurance
What is pet insurance?
Pet insurance helps to cover the cost of veterinary treatment in the event of an insured animal falling ill or being injured in an accident.
Some policies will also pay out if a pet dies, is lost or stolen or causes injury to a third party or damages a third party’s property.
Why do I need pet cover?
Our furry friends are a big part of our lives, so when they fall ill or are injured, providing the best health care for them is important.
With the advances in veterinary medicine, treatments are now available that were once reserved for humans.
Veterinary practices also have access to much more sophisticated equipment than they did in the past, making it possible to detect and diagnose problems that would once have gone untreated.
Inevitably, these types of treatments and diagnostics come at a price, leaving some owners faced with a difficult choice.
For this reason, many opt to take out insurance as – not only does it provide valuable peace of mind against spiralling vet fees – but it also allows them to explore available treatment options.
Types of insurance policies
12 Month Policies: There are 3 main insurance providers in New Zealand- PetPlan, Southern Cross, and Pet-N-Sur. All of these companies offer 12 month policies, which cover illnesses for 12 months. So, if your pet has an ongoing illness such as diabetes, skin allergies, or arthritis, the condition is only covered for 12 months.
Covered for life Policies: PetPlan offers these policies in addition to the standard 12 month policies. This essentially means that as long as you renew your premium each year on time, your pet will be covered every year for the same ongoing illness or recurring illness.
Pre-existing medical conditions
A pre-existing medical condition is one for which an animal has actually received care, treatment or veterinary advice before the cover came into effect.
Most companies will exclude the pre-existing condition from any new cover, but – subject to that important exclusion – you should still be able to find insurance for your pet.
Insuring older pets
Insurance companies typically treat dogs and cats aged eight and over as ‘older animals’.
Whilst cover is available for older pets, premiums are usually higher than for younger animals as less companies offer quotes and the pets are considered to be at a greater risk of illness, particularly long-term illnesses that are associated with age.
Some companies are still able to offer competitive premiums by increasing the policy excess or requiring that an additional co-insurance contribution is made towards any claims.
Excesses and co-payment on pet insurance
The excess is your contribution towards a claim. The amount you pay as an excess is fixed by the insurance provider when you take out the policy. For example, if there’s a $100 excess and you make a claim for $500, you’ll be required to pay the first $100 of that claim (usually direct to your vet) with the insurer paying you the remaining $400.
There’s likely to be a compulsory excess, plus a voluntary excess that you can choose the level of.
Typically, the higher you set the excess, the cheaper the premium.
There may also be the option to have a co-payment (e.g. pay the excess plus 20% of the bill) to reduce the premium.
Reading the small print
Some insurance companies have pre-set limits for specific injuries and illnesses, e.g. a $4500 knee surgery for a torn ligament may only result in $500 being repaid to the owner.
Dental treatment is often not covered.
Illnesses associated with breeding are usually not covered.
In summary, pet insurance is complicated like health insurance. The pet insurance companies unfortunately don’t offer the same policies, so it can be very difficult to compare them. But as a general rule of thumb, cheaper policies will have higher excesses, lower limits, more exclusions, and only give 12 months cover for illnesses. Hopefully the information above will be useful in guiding owners to choose a suitable affordable insurance policy.