Advertiser Disclosure

Cheap Pet Insurance: How To Lower Your Premiums

Olivia Gee
Contributor

Published: Oct 12, 2023, 3:33pm

Johanna Leggatt
editor

Edited By

Editorial note: Forbes Advisor Australia may earn revenue from this story in the manner disclosed here. Read our advice disclaimer here.
Cheap Pet Insurance: How To Lower Your Premiums

Table of Contents

{{ tocState.toggleTocShowMore ? 'Show more' : 'Show less' }}

Whether they’re fluffy, feathered or scaled, pets are beloved members of many Aussie households. Around two thirds of us own pets according to an Animal Medicines Australia survey, and 90% of owners say their pets have a very positive impact on their lives.

But being a pet parent isn’t cheap. It costs roughly $1,627 each year to support a dog and $962 for a cat, and that’s after a much more costly first year of ownership. When it comes to vet bills, costs are rising. Between 2016 and 2019, veterinarian costs rose by 19% and premiums have shot up this year, as well, with some pet owners reporting increases of 50%.

Australia’s largest pet insurance underwriter PetSure (a subsidiary of international player Hollard Insurance), says insurance costs rise by about 20% each year. This increase can be driven by inflation more broadly, but also reflects the potential risk of increased health costs as pets age.

With pet insurance costs sitting between $240-$720 a year on average – and soaring much higher for some breeds or pets with certain conditions – it’s imperative to find a policy that fits comfortably within your budget. Below are some of the best ways to reduce pet insurance costs.

7 Ways To Get Cheap Pet Insurance

There are a number of factors beyond your control that impact insurance premiums. Your pet’s age, sex, breed, past or chronic health conditions and even where you live can all impact the cost of pet insurance. But there are many ways to bring premiums down. Here are a few actions you can take to save on pet insurance.

Shop Around

Pet insurance in Australia has historically been dominated by two major insurance underwriters backing the providers that deliver insurance policies: Hollard and Petplan/Petcover. But in the last decade, others like RACQ, Trupanion, Vet Choice/Coles (provided by Guild Insurance), Knose, Pet Circle, Budget Direct have entered the market. Most recently, US and Canadian pet insurer, Fetch, has expanded into Australia.

Greater competition in the space means pet owners have more leverage to compare coverage for better value deals, and even haggle for cheaper pet insurance using competitor quotes. So it’s always worth doing your research and gathering quotes tailored to your pet before settling on a policy.

Pay annually

As with other forms of insurance, some providers will offer policyholders discounts for paying their premium in one annual lump sum instead of monthly instalments. If it suits your budget, this is a simple way to cut down pet insurance costs—just don’t overextend yourself financially to do so. Some providers may offer further discounts if you purchase your policy online, but this is generally only applied to the first year of cover.

Take Out a Policy When Your Pet Is Young

Pet insurance is more expensive when you’re looking to cover an older pet. This is because health issues are more of an issue in older animals, and you’re more likely to claim insurance for a senior pet to help cover the costs of treating conditions or injuries.

Cover for a young animal is cheaper from the outset, but will also naturally increase as your pet ages. However, if you take out an insurance policy when your pet is younger and renew it consistently, more conditions will be covered in the long-run, as these won’t be considered ‘pre-existing’.

About Pre-Existing Conditions

Consumer advocacy group CHOICE says pet insurance coverage has improved as an increasing number of providers compete for pet owners’ business. In years past, you’d often see pets with pre-existing conditions excluded from cover, even if an illness had been resolved. Now, as long as conditions are cured or the pet is symptom-free for a certain time, many providers will offer cover. Things like out-of-hours emergency care and cover if a pet comes down with an illness they have been vaccinated against are also now commonly covered.

How does this help you save money? Not every insurance policy offers the same benefits, and every pets’ medical history differs. Be sure to read the fine print and find a policy that covers what’s most relevant to your pet’s health history, and you’ll likely see some savings.

Basics First

Most insurance providers offer three levels of cover: ‘accidental-only cover’, ‘accidental and illness cover’ and ‘comprehensive cover’, with premiums and policy features increasing in that order. The policy tier you choose should reflect the needs of your pet.

If they are a breed that is more likely to suffer from insurable illnesses as they age, or if they have experienced health issues in the past, then a more fully-featured (and therefore expensive) policy may be necessary. But if your best four-legged friend comes from hardy stock, then a cheaper policy that covers emergencies only might be a budget-friendly option that works for you.

Increase Your Excess

Whatever policy level you choose, you’ll still be required to pay an excess each time you make a claim.  If you increase your excess, you’ll usually see a premium reduction. However, excess on pet insurance claims works a little differently to car insurance or home and contents cover.

In this case it refers to the set amount you pay the insurance company before your coverage kicks in, as well as an agreed upon percentage of vet expenses that you will pay towards the claim. This will differ between providers and may apply differently (or not at all) to certain procedures or vet visits.

Since this cost is much more variable than a set figure excess, and depends on how veterinary clinics set their fees, it’s essential that you are prepared to cover these costs in an emergency.

Bring Home a Pet That Is Cheaper to Insure

If you’ve already fallen in love with a dog or a cat and taken them home, this move may be off the cards. But if you’re still deciding on a pet and want to insure them for less, your choice of animal and breed can have a big impact.

For example, dogs are usually more costly to insure than cats. Most providers don’t offer coverage for small animals like guinea pigs, rabbits, birds, reptiles and fish, but you can sometimes find ‘exotic pet insurance’ for them. As it’s more specialised and the risks and costs are often harder to judge, it can be expensive.

Across the board, it’s also more expensive to insure pure breeds. This is because their genetic background often means they’re more likely to suffer from certain conditions or injuries, and therefore you present a higher risk of claiming on coverage. So, you may want to choose a dashing bitsa or good-natured mutt to cut down pet insurance costs.

Why Does Pet Insurance Increase Each Year?

If it feels like your pet insurance costs go up every year, then you’re on the money. Pet insurance costs increase annually for three main reasons:

  1. Your pet gets older. As your puppy transforms into a senior pooch, they are more likely to develop conditions that require vet care or ongoing treatment. Since you might claim on insurance to help cover these costs, your risk as an insurance customer increases and providers mitigate this with higher premiums.
  2. Advancements are made in pet care and vet technology. As we learn more about pet health, increase treatment options and improve veterinary clinic technologies, the potential costs associated with pet health care also increase. If an insurance company is facing higher costs, they usually want to pass this onto customers.
  3. Inflation. Like most other goods and services, insurance costs will rise alongside inflation. For pet cover, this is most reflective of the rising costs of vet bills, which is impacted by wages, changing technologies and increased scope of treatment options.

Is Pet Insurance Necessary?

Whether pet insurance is necessary is in the eye of the beholder. If you’re in a financial position to cover major vet bills and other pet care costs at the drop of a hat, then insurance may not be an essential for you.

But if you can’t guarantee you’ll have the money, and want to ensure your pet is cared for in a health emergency, then it may be a good idea to investigate pet insurance. While it’s estimated vet bills amount to around $400 a year for dogs and $270 for cats, an unexpected surgery or illness could easily see costs spike into the thousands—sometimes tens of thousands.

It may seem obvious, but it’s essential to consider the value of pet insurance with your own pet in mind. If they are a breed prone to illnesses that are costly to treat, or have a tendency to get into trouble, then pet insurance could save you from facing vet bill shock. On the flip side, if you have a mild-mannered pet from a relatively illness-free lineage, then pet insurance may not prove valuable in the long run.

It’s also important to remember that many insurance companies won’t insure pets over a certain age—for dogs this is often as young as eight or nine. This means your pet may be denied cover for the years they need it most: when they’re older and facing more health complications.

Keep all of this in mind when you’re searching for a pet insurance policy or considering switching providers.

Benefits of Pet Insurance

Like any other type of insurance, pet cover is there to provide peace of mind. Knowing your beloved animal friends will be cared for in an emergency without the stress of covering healthcare costs can be a great emotional support, as well as a financial one.

Beyond emergencies, pet insurance can cover routine care. One-off costs like desexing, microchipping and council pet registration can crop up quickly in the first year or so of pet ownership. Then you might make routine vet visits for vaccinations, flea and tick treatments, teeth cleaning and other ongoing pet care administered by vets. Routine care insurance can help cover these costs, often as an optional extra for an additional fee and sometimes as standard comprehensive cover. And if it’s no longer valuable as your pet ages, you can always drop it at renewal time or switch to a more appropriate policy.

As competition has increased in the Australian pet insurance market, coverage options have expanded. If this trend continues, potential insurance customers will be in a better position to negotiate and reduce insurance costs for policies that are best suited to them and their animal pals.

Bottom Line

Pet insurance has its pros and cons, and the decision of whether it’s right for you is wholly dependent on your circumstances.

There are are certainly areas of pet insurance that need improvement: Many insurers still require consumers to pay for the service up-front, and then lodge a claim, although GapOnly payments are increasing. Exclusion for common issues and routine care are common, and where it is offered, it is usually as an add-on with an increased premium. With premiums increasing this year, many consumers are wondering whether pet insurance is worth it.

With this in mind, you may find it more advantageous to set aside a set amount of money each month to cover the care of your pet rather than taking out insurance. Or you may weigh up the stress of an accident-prone pooch or one with a history of breed complications and opt for the peace of mind that pet insurance affords.

Frequently Asked Questions (FAQs)

What is the best pet insurance in Australia?

There is no one ‘best’ pet insurance policy or provider. You’ll need to take into account personal circumstances like your budget and location, and your pet’s age and health needs when comparing policies.

A great place to start your research is with our assessment of the best comprehensive pet insurance policies in Australia. These were chosen and rated using clearly defined metrics, but Forbes Advisor only considered the highest level of cover (comprehensive). Therefore, this is not representative of every pet insurance policy available in Australia. Once you’ve read our take on these options, be sure to research further as other levels of pet cover may be more suitable for you.

How much is pet insurance?

The cost of pet insurance is highly dependent on the type of animal you own, as well as its breed, age, sex, health history and other factors like where you live and the type of policy you choose. This will all be weighed up differently by various insurance providers, so you can receive variable quotes for the same pet depending on where you apply for cover.

With this in mind and with room for far-flung outliers, it’s estimated by ASIC’s Moneysmart that pet insurance costs an average of $20-$60 a month ($240-$720 annually).

What does pet insurance cover?

What’s covered by pet insurance will differ between providers, but you’ll usually find there are three policy levels on offer.

Accident-only insurance: This covers veterinary costs if your pet is accidentally injured, and is the cheapest level of insurance. But you may not require this minimal coverage if you keep your pet safely contained during the day and secure on any outings.

Accident and illness insurance: On top of accidental injuries, these policies can also help you cover costs if your pet gets sick. Note that most insurance companies won’t cover pre-existing medical conditions as an illness through this policy type.

Comprehensive insurance: This is the most fully featured type of policy, covering your pets for accidental injuries, illnesses, preventative care and more. Some policies include routine vet treatments like vaccinations, teeth cleaning or worm and flea treatments, while others may only offer these as optional extras for an additional cost. As these are the most expensive policies, it’s important to assess exactly what you want and need out of comprehensive pet insurance and find a policy that ticks all the boxes.

The details about what is and isn’t covered in each policy can be found in the product disclosure statement (PDS) listed on the insurance company’s website. Be sure to look out for any exclusions that might be relevant to your pet, and keep in mind that some providers have different naming conventions or additional policy levels. For example, you may see accident-only cover listed as ‘basic’, and others may offer policies tailored for puppies and kittens.

And remember: if you have home and contents insurance, your pets may be covered to some degree by this policy. Review each PDS carefully to see if this cover might be adequate, and make sure you’re not paying for any  unnecessary pet insurance.

Pet Insurance Cost Guides
Pet Guides
Pet Insurance Reviews

More from   Advisor

Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Olivia Gee Contributor

Olivia Gee is a Sydney-based writer and editor working across personal finance, lifestyle and sustainability. She is an insurance expert with ASIC RG146 Tier 2 Certification to provide general insurance advice. Her work has been published in Time Out, Money magazine and Guardian Australia, among other publications.