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How Much Does Pet Insurance Cost?

Jessica Mudditt
Contributor

Updated: Apr 18, 2024, 2:20pm

Johanna Leggatt
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How Much Does Pet Insurance Cost?

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Despite the high costs of vet treatment, Australia has low rates of pet insurance. This may change as the industry becomes increasingly competitive

With two out of three households owning at least one pet, Australia has one of the highest pet ownership rates in the world, according to Animal Medicines Australia’s ‘Pets in Australia’ report. Dogs are the most popular choice, followed by cats, with 48% and 33% of households owning them respectively.

However, only 7% of pets are insured—as compared with 30% in the United Kingdom, according to data from PetWorld.

“It is a relatively small industry, but it has huge potential for growth,” says Don Shields, managing director of Geelong Insurance Brokers (GIB).

The majority of pet insurance brands are underwritten by the same insurer, Hollard, which retains a dominant market position despite more recent entrants to the market.

Of the 21 brands in Australia, the following 15 are underwritten by Hollard via their subsidiary Petsure: Australian Seniors, Guardian, Prime, Real, RSPCA, Guide Dogs, Pet Insurance Australia, BUPA, Pet Barn, Bow Wow Meow, HCF, 1300 Insurance, Woolworths, Insurance Line and Perfect Partners.

Pacific International underwrites two brands, as does RACQ. Allianz and Sovereign each underwrite one brand.

Home and contents policies will usually provide basic cover for cats or dogs if they are injured accidentally. Check with a broker as to which insurers include this as an option.

“Usually the cheap ‘no frills’ home and contents policies bought online have no cover for vet costs for injured cats or dogs,” says Shields.

Vet Costs

An average dog owner will spend $25,000 over the life of their dog on vet bills, food and grooming. Cats are generally a cheaper option as they encounter fewer health issues.

In the first year alone, a cat or dog will cost its owner between $3,000 and $6,000, according to MoneySmart. Ongoing annual costs are approximately $1,627 for a dog and $962 for a cat (this includes the cost of insurance).

Should an accident occur or an illness develop, the costs of veterinary treatment can be high for cats and dogs. Owners have been known to spend tens of thousands of dollars on lifesaving procedures for their pets following an accident or illness. Others have had no choice but to have their pet put down if they cannot afford the treatment.

For some animal lovers, the peace of mind that pet insurance can provide is worth the average monthly costs of $20-60 a month.

“Prices [of pet insurance] vary according to the breed and age of the animal, to reflect the risk,” says Shields.

The following is a breakdown of common veterinary costs.

Common vet bills for a dog—upfront and ongoing

  • Desexing: $200*-$500* depending on age, gender and size
  • Flea and worming treatments, and heart-worm prevention: $120-$300
  • Microchipping: $60-$80
  • Puppy vaccinations: $170-$250
  • Annual vaccinations and veterinary check: $90
  • Flea and worming treatments: $120

Common vet bills for a cat—upfront and ongoing

  • Desexing: approximately $115-$300 (male or female)
  • Flea and worming treatments: $100
  • Kitten vaccinations: $170-$200
  • Microchipping: $60
  • Annual vaccinations and veterinary check: from $80
  • Flea and worming treatments: $100-$150

Source: RSPCA NSW

Types of Pet Insurance

In the past, pet insurance was uncompetitive because there were only two major insurers who were underwriters for most pet insurance brands: Hollard and Petplan/Petcover. According to consumer organisation Choice, there was not enough genuine choice between providers and it was not worthwhile taking out pet insurance.

However, things have improved since 2019. Limitations on pre-existing conditions are beginning to be less common, for example and more competitors are entering the market.

More recent brands to enter the pet insurance market include Trupanion, Vet Choice/Coles (provided by Guild insurance), Knose, Budget Direct and RACQ.

The most common ways of obtaining pet insurance is directly from an online provider, via a veterinarian, a breeder, or through an insurance broker or agent.

Here are the common types of pet insurance.

Basic Tier

Also known as accident-only insurance, the basic tier covers vet costs if a pet is in an accident. If you walk your pet on a leash and they do not roam outside during the day, accident cover may not be necessary.

Premium tier

Also known as accident and illness insurance, this will cover your pet if it’s in an accident or falls sick. However, most insurers won’t cover pre-existing medical conditions. It is important to check the product disclosure statement for terms and conditions.

Comprehensive

This will cover a pet for accidents, illness, preventative care and some routine vet checks (such as vaccinations and worming). Some insurers will also include a fourth tier, known as Deluxe or branded as ‘Peace of Mind’ coverage, and while this tier will generally cover more procedures, the premiums will also be more expensive.

What Factors Influence the Price?

There is a range of factors that influence price, but here is a few to keep in mind:

  • Dogs are more expensive to insure than cats, because they tend to have more medical issues
  • The age of the pet – as they age, the risks of illness increase. Many insurers will not accept senior dogs as new customers over the age of nine
  • The breed of your pet (for dogs), especially pure-breds which have a higher incidence of genetic issues and complications
  • Your pet’s gender
  • A pet that hasn’t been de-sexed is more costly to insure
  • Where you live
  • The type of policy you choose
  • The policy excess that applies.
  • How long you have had the insurance for (aka a ‘loyalty tax’). Due to waiting periods, pet insurance is most effective if you insure your pet while it is a kitten or puppy and maintain the policy over time.

The Average Costs of Pet Insurance?

Your premium is calculated according to the breed and age of your pet, and the type of cover you have chosen. Some breeds, such as pugs, often encounter health issues, so the premium will be much higher.

As a rough guide, the average monthly costs of pet insurance is $20-60 a month. But this is a rough guide only and will depend on your pet’s age, how long he or she has been insured and whether you have made a claim. It is not unheard of for owners to being paying $100 a month on premiums, or $1200 a year.

Tips on How to Save on Your Premiums

There isn’t much you can do to influence the way your premium is calculated as your pet’s breed and age is out of your hands.

Shields says: “There are various levels of cover—for example, basic, comprehensive and premier, which all provide different benefits.

“To reduce costs, consider reducing the level of cover. The other option is to increase the excess.”

So you can either reduce the level of cover, meaning there will be some procedures you will have to pay for on your own, or increase your excess and maintain coverage levels, but then claim on fewer smaller items as the excess you would have to pay would make the claim redundant.

Frequently Asked Questions (FAQs)

Does pet insurance cover vet fees?

It depends on the policy you take out. A comprehensive insurance policy will cover some routine vet checks, including vaccinations and worming, but not always. The premiums will be higher, so it is a question of weighing things up.

How much is pet insurance typically speaking?

The average monthly costs of pet insurance are $20-60 a month, according to MoneySmart, but it’s not unusual for owners of older pets to be paying $100 a month as their premiums rise each year.

Is pet insurance worth the cost?

Whether pet insurance is worth the peace of mind often comes down to an individual’s risk appetite and financial circumstances. Do you have a big enough of a rainy day fund to cover emergency procedures, or would it cause you financial hardship?

The most likely time for a pet insurance claim is within the first few weeks after a puppy or cat has left its mother, according to data provided by an underwriter that Don Shields, managing director of Geelong Insurance Brokers (GIB), works with.

“There would be insufficient time for most people to save up funds,” he says. “With the increasing costs of pets, especially dogs, can anyone afford not to have pet insurance to protect themselves for possibly thousands of dollars in vet bills?”

You may find, however, that as your pet gets older, the conditions of the policy change and the premiums rise. You may be tempted to shop around but be aware that once your dog is over the age of eight many insurers will not cover them, and this means there is generally less value for money for consumers with older pets.

How do I complain about a pet insurer?

If you have a dispute with a pet insurer, or they have refused a claim that you consider to be legitimate, then your first step should be to raise it with their complaints department so it can be reviewed. If this fails to resolve the issue, then you can head to the Australian Financial Complaints Authority (AFCA) , which will assist you.

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Jessica Mudditt Contributor

Jessica Mudditt is a freelance journalist and the author of "Our Home in Myanmar". She is based in Sydney and writes about business, finance and technology for the BBC, Economist Impact, Company Director Magazine and Westpac Wire.