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Is pet insurance worth it?

With cover for up $25,000 a year and 100% back on vet bills, it’s easy to get value for your money with pet insurance — see for yourself.

We get it – pet insurance isn’t cheap. Why pay $50 to $100 a month for something you’re not even sure you’ll use? It’s a fair question, but also one that ignores the unpredictability of life – and our furry friends! That $50 soon becomes worth it when you consider that a trip to the vet could cost you $13,000 – or the life of your best mate.

dog playing

When is pet insurance worth it (and when isn’t it?)

Is pet insurance worth it? The answer: Kiwis spend approximately $1.8 billion on their pets each year, of which vet bills account for 23% (that’s around $414 million if you don’t want to do the maths yourself). Yet for some bizarre reason, people are still sceptical about taking out pet insurance. Here are some scenarios when it’s worth it – and when it probably isn’t:

Worth itProbably not worth it
  • Pets are under the age of 9
  • Purebreds (they are pre-disposed to congenital conditions)
  • If you can’t afford a huge unexpected bill
  • If you have an adventurous pet that likes to venture outdoors
  • If your pet is like your child
  • Pets are over the age of 9 years (unless you can get a specific senior pet policy
  • Mutts and mixed breeds
  • If your pet already has a lot of pre-existing conditions
  • If you have enough savings to cover an accident tomorrow
  • If you’re willing to euthanise your pet rather than pay the cost for treatment

The pros and cons of pet insurance

The worst-case scenario is having to euthanise an animal that could have been treated if not for the cost involved. With the cost of some pet treatments being in the tens of thousands, you could end up with a hefty bill if your pet is not adequately insured.

You can’t put a price on the peace of mind that comes from knowing you never have to choose between your furry friend and your financial security, but that’s not the only advantage of obtaining pet insurance. With that being said, many expenses aren’t covered by insurance, so it’s sensible to understand what insurance covers.

ProsCons
  • You could save thousands. A serious illness or injury can take a huge chunk out of your budget if you don’t have pet insurance. For example, cruciate ligament damage is the most common reason a dog may develop a lame hind leg, and surgery can cost approximately $7,000.
  • You’ll probably have to pay up front. Although some vets agree to defer payment until your claim is finalised, it’s common that you have to settle the full account up front. You may be required to provide evidence about the cause of your pet’s condition, and this can also delay reimbursement.
  • You don’t have to see your pet suffer. Some policies include cover for regular visits to the vet, which means that you can go to the vet if you think something is wrong, instead of hoping that everything will sort itself.
  • Exclusions always apply. Any pre-existing condition your pet might have suffered before being insured is unlikely to be covered. The fine print varies from policy to policy, so be sure to check the product disclosure statement (PDS), but the definition often extends to any condition your pet has ever been treated for.
  • Your pet is in good hands if you’re unwell. Some policies include cover for emergency boarding if you are hospitalised and there is nobody to look after your pet.
  • You can only claim a specific percentage back. Reimbursement is often on a co-payment structure, meaning you are responsible for about 20% of treatment costs on average and the insurer pays the rest. Some insurers do offer a 100% refund, but this may expire after your pet reaches a certain age.
  • Some policies cover senior pets. A benefit of getting in early is that you’re less likely to have claims refused on the basis of pre-existing conditions as your pet ages.
  • Older pets can be hard to insure. It’s best to insure your pets earlier rather than later because most insurers stipulate a maximum age for a new policy (typically nine years).

Is pet insurance worth it in the long run?

The most efficient way to find the best cover for your needs is to start with a general overview and then narrow down your options. Read independent reviews of the policies you shortlist. Avoid glazing over from information overload by making notes of which specific features are important to you, and learn what to look for in a policy.

Chances are, you’ll probably need to pay for extensive veterinary treatment for your pet at some point. Even if you don’t, choosing a policy that covers regular check-ups plus unexpected health problems means you receive a guaranteed value for your premiums.

Ultimately, the decision on whether pet insurance is worth it is a very personal one. Domestic animals are not cheap to care for, and pet insurance can be an excellent way to mitigate your expenses over the lifetime of your furry friend.

Should I just set up a savings account?

An alternative to pet insurance is to set up an emergency fund to cover any unexpected vet bills. By opening a high-interest savings account and regularly setting aside a small portion of your pay each week, you can potentially build a balance big enough to pay for your pet’s treatment if they get sick or suffer an injury.

However, what happens if your buddy suddenly becomes sick only two months after you start the account? Even allergy treatment has set some people back as much as $2,500. What if your pet has an illness that needs to be treated on an ongoing basis? Regular treatment could quickly drain whatever money you had saved.

When should you set up a savings account to cover your pet’s vet bills?

  • If your pet is too old to qualify for accident and illness cover (new policies are usually only offered to pets under eight or nine years of age).
  • If your pet suffers from pre-existing conditions that aren’t covered by your pet insurance policy.
  • If you’re struggling to find an insurer willing to cover your pet.

When should you consider buying pet insurance?

However, it could be worth factoring pet insurance into the cost of pet ownership for many other owners. There are several situations when pet insurance could be worth it, including:

  • If you live in a tick-prone area and your pet spends a lot of time outdoors (treatment for tick paralysis can be very expensive if not covered by your insurance).
  • If you own a breed of dog or cat that is prone to suffering from potentially expensive health conditions.
  • If you want to avoid the heartbreaking decision of having your pet euthanised because you can’t afford treatment.

The cost of pet insurance vs the cost of a vet visit

Many first-time pet owners are shocked to find just how expensive vet bills can be, even for something relatively straightforward like a fractured leg. The simple truth is that there’s no such thing as ACC for pets, so it’s up to owners to cover the full cost of treatment.

Does it work out cheaper to pay the premium and enjoy having pet insurance in place to help cover your vet bills, or does the cost of the premium outweigh the benefits the policy provides? In short, it depends. Not only does the cost of cover vary between insurers, but so does the level of cover offered. Your veterinary bills can also vary greatly depending on the illness or injury your pet suffers, so it’s impossible to say for sure whether or not cover is worth the expense.

How much does pet insurance cover for standard vet bills?

Most pet insurance policies are only designed to cover a portion of your vet bills, usually between 75% and 85% per claim.

It’s also essential to know that annual benefit limits apply to your policy. These limits vary depending on the type and level of cover you select, but they usually range from $10,000 to $15,000. So if your policy has already covered one expensive vet bill during the period of insurance, it may not provide sufficient protection to help pay your account if your pet suffers another serious injury or illness in the same year.

Are some breeds more likely to need pet insurance cover?

If your cat loves getting into mischief or your dog seems incredibly accident-prone, you may see pet insurance as an essential consideration. However, some specific breeds of dogs and cats have a higher risk of certain health conditions and may benefit more from pet insurance cover.

These include:

  • Short-nosed (brachycephalic) dog breeds such as Bulldogs and Pugs are prone to breathing and digestive problems.
  • Labradors can be prone to hip dysplasia.
  • Persian cats can contract polycystic kidney disease.
  • Maine Coons can be prone to heart disease.
  • Pedigree cats and dogs are more likely to suffer from specific health problems.

However, be aware that some insurers refuse to cover specific breeds, and if the cover is available, your pet’s breed may result in higher premiums.

Questions to ask when considering if pet insurance is right for you

Is your pet purebred?

If your pet is purebred, you probably need pet insurance. If you’ve got a lovable mutt, they are more likely to be healthier, so you might get away with no cover.

The same selective breeding that gives purebred pets their delicate features makes them more susceptible to specific illnesses. For example, French Bulldogs are prone to breathing problems, hip dysplasia, allergies and disc disease. Siamese cats have a greater tendency to develop heart problems and certain types of cancer.

If you have a purebred pet, pet insurance can remove the worry of being hit with a sizeable vet bill if one of these illnesses occurs in your furry friend. It can also help pay for routine treatment that might help you avoid more significant issues later in your pet’s life.

On the other hand, mixed breeds and mutts are more likely to avoid these unfortunate genetic traits. If you own one of these lovely souls, the value of pet insurance might not be as high for you.

Is your pet older?

If you’ve got a younger pet, definitely consider getting pet insurance as soon as possible before any health issues develop. Pet insurers won’t cover pre-existing conditions, so the longer you wait, the more time you’re allowing for ailments to appear. If you get your little buddy covered before these conditions occur, then you get the most bang for your buck. If you know you want insurance, procrastinating could be your number one enemy.

Most pet insurers solely offer older pets accident-only policies. However, you need to ask yourself how likely your pet is to get into an accident and whether or not you want to attempt rehabilitation on an older pet.

Have you read the fine print?

Many people have pet insurance horror stories because they don’t fully understand what’s covered and what’s not. In your policy papers, the insurance company lists many exclusions – make sure you read these.

One significant exclusion is pre-existing conditions. If your pet didn’t have insurance when the condition appeared, you can’t take out cover for that ailment. That’s not news to many people, but what catches them off-guard is what exactly is considered a pre-existing condition. For example, if your pup was treated for arthritis in its left knee before taking out a policy, they probably aren’t covered at all for arthritis – even if it shows up in the right hip next time.

One way to avoid this is to take out insurance cover for your four-legged friend before any conditions appear. They are then covered no matter what. On the flip side, pet insurance might not be of value to you if your pet already has pre-existing conditions unless you want to cover them for accidents.

Pet insurance exclusions

Another factor you should consider is that pet insurance doesn’t cover everything. In fact, there are general exclusions that apply to most policies, meaning that cover is usually not available for:

  • Illness or injury caused by a pre-existing condition.
  • Elective treatments, for example, desexing (unless covered by an optional routine or preventative care benefit).
  • Illnesses that occur during the policy’s waiting period.
  • Diseases for which there is a known vaccine, such as kennel cough in dogs or feline leukaemia in cats.
  • Vet costs arising due to pregnancy.
  • Bi-lateral conditions (for example, if your dog suffers from hip dysplasia, your policy may only pay a benefit for the first hip affected).
  • Pet dental costs.

Make sure you read the PDS closely to find out precisely what your pet insurance policy does and doesn’t cover.

More than just a question of cost

When we’re talking about our canine and feline companions, sometimes these sort of impersonal financial calculations and lists of exclusions fail to take into account just how important our furry friends are. If your dog or cat is a much-loved family member you’d do anything for, sometimes determining whether or not pet insurance is worth it is more than a question of cost.

If you want to give your pet the best possible care at all times, the peace of mind pet insurance provides may mean the cost of cover is well worth it. If you decide to cover your pet, make sure to compare a range of options to find the best policy for your needs.

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