As humans we have insurance to cover a wide range of priorities: our healthcare, our homes, our cars, our holidays and even our lives.
Pet insurance, is another type of insurance policy taken out in order to protect something we care about dearly: our beloved animals.
By taking out a pet insurance policy, you’re able to receive help to cover unexpected veterinary expenses when your pet gets sick or injured. Most pet insurance policies are targeted towards cats and dogs, however, there are pet insurance policies for ‘exotic’ pets, such as rabbits or birds.
As with other types of insurance, pet insurance works by paying a monthly or yearly premium to an insurance provider. If unexpected veterinary expenses arise, and your policy covers such events, you’ll then be able to make a claim with your provider instead of being 100% out of pocket.
The Importance of Pet Insurance in Australia
In Australia, dogs are the most popular pet. Research shows almost half of Australian households have at least one dog, and a third of all households have at least one cat. Add in other animals to the mix, such as birds, rabbits, turtles and guinea pigs, and it’s clear that Australians love their pets. But that love does not come cheap.
Nicole Rous, director of Mont Albert Vet, tells Forbes Advisor that without pet insurance, veterinary treatments for accidents or illnesses can cost anywhere between $500 to $10,000–with even minor surgeries costing more than $2000.
But it’s not just surgeries that can burn a hole in your pocket. “An average GP visit would be over $200 these days,” Rous explains, as a consult could be $95 plus the necessary medication following the appointment. So while it’s not a requirement to have pet insurance in Australia, and while vets won’t refuse treatment without insurance as long as the owners are happy to pay the bill, pet insurance is still a “no brainer” to Rous.
You don’t want to have to say goodbye because you can’t afford life saving surgery, Rous says.
Plus, Rous adds, budgeting a set amount each month towards your pet insurance premium and then not having to deal with bill shock when the need for a procedure arises is much easier on the pocket, especially as the cost of living increases.
Pet Insurance in the Dog House
Unfortunately, in the past pet insurance has been blighted by a lack of competition, although that has changed in recent years. Nevertheless, the industry remains dogged by reputational issues, namely that it is little more than “junk insurance”, which is how Financial Counselling Australia referred to some parts of the sector in a submission to ASIC in 2019.
As vet bills have risen in line with inflation, so too have pet insurance policies—in some case by as much as 50%. With many insurers refusing to insure pets over the age of nine, especially dogs, many consumers feel locked in to certain policies as they’re unable to shop around once their pet reaches a certain age. Consumers will need to weigh up whether pet insurance is worth the cost in these situations or whether they’re best to pet aside money for their pet’s treatment each month.
On June 29 last year, ASIC instigated 38 interim stop orders for a 24-hour period pertaining to 67 pet policies issued through major insurance underwriter Hollard and its subsidiary PetSure. The corporate regulator was concerned the companies failed to properly consider the ability of the consumer to make up-front payments for vet bills before reimbursement. The stop order affected brands such as Woolworths, RSPCA, Petbarn, Guide Dogs, Medibank, Bupa and HCF. Within 24 hours, the stop orders were lifted after the companies addressed ASIC’s concerns regarding the target market determination of its customers and updated its policies accordingly. You can read ASIC’s original media release in full here.
Related: Pets On Me Insurance Review
