Is Pet Insurance Worth It In 2024?

Unfortunately, despite such a high proportion of Australian households owning a pet, only 27% of pet owners actually have pet insurance. Yet according to Rous, having pet insurance should be a “no brainer” for all pet owners, and she hopes that figure will increase in the years ahead.

To determine if pet insurance is worthwhile, it’s good to know what kind of vet bills you could be facing—whether it’s a major operation, a minor surgery, a course of antibiotics or a regular check-up at your local veterinary clinic.

Data from the RSPCA shows the average claim amount for cancer treatments is $3,503.74; tick paralysis is $1,156.87; diabetes costs $1,952.39; and snake bites are $2,133.31.

Ticks and snakes are common in Australia, with the same RSPCA data showing the highest claim for tick paralysis for the period analysed coming out at $5,293.57, while the highest snake bite claim for treatment cost the owner a whopping $20,147.09.

Rous says while vets won’t refuse treatment without insurance as long as the owners are happy to pay the bill, pet insurance offers “peace of mind that they will be able to provide their pet with the necessary gold standard of care when needed”.

It’s also worth mentioning that some pets are prone to hereditary conditions that could increase their cost of care. For example, large dogs like border collies, Labrador retrievers, Great Danes and German Shepherds are more likely to have hip dysplasia, which could cost between $3,500 and $7,000 to treat, sometimes even more, depending on the situation.

You can read more in our pick of the best pet insurance providers.

Now that you understand the costs of caring for a pet, you’ll want to identify what pet insurance covers. A pet insurance policy will state the amount the insurance company will pay for medical expenses.

Accident and illness plans typically cover:

• Broken bones
• Toxic ingestion
• Dental illnesses like gingivitis
• Chronic conditions like diabetes
• Breed-specific conditions like hip dysplasia
• Emergency care
• Hospitalisation and surgery
• Prescription medications

An accident-only pet insurance plan will cover veterinary expenses related to an accident, like a torn ligament or a pet swallowing something poisonous. But an accident-only plan will not cover veterinary expenses related to an illness, like ear infections or cancer.

Some pet insurance insurance plans offer the option to add wellness or routine-care coverage. This add-on covers expenses such as routine check-ups, microchipping, vaccinations and flea/tick prevention. There are also comprehensive pet insurance plans available, which may cover all of the above depending on the provider.

Additionally, as the Australian government site Moneysmart explains, some home and contents insurance may offer pet insurance as an optional extra also.

However, “this type of add-on insurance may not be as comprehensive as a stand alone [pet insurance] policy,” the website explains.

Here are some common pet insurance exclusions:

• Experimental or elective treatment. This includes treatments that are considered experimental, investigational and not within the standard of care accepted. It can also including orthodontics or desexing operations.
• Food, dietary and nutritional supplements. Your pet’s dietary expenses are usually not covered by pet insurance, but some plans cover prescription food and supplements.
• Grooming. Services such as baths, dips, nail trims and shampoos are typically not covered by pet insurance.
• Pre-existing conditions. This includes illnesses and injuries that your pet had before your coverage started. Some plans do not permanently exclude pre-existing conditions, which is why it is important to always read the PDS before taking out a new insurance policy.
• Senior dogs. Many insurers will not cover dogs over the age of eight or nine, so if you’re planning on taking out pet insurance for your pooch, make sure you do it by this age.

Pet insurance is similar to health insurance for humans, in the sense that there is usually an excess to pay when you make a claim, waiting periods before you can use the insurance benefits, and annual claim limits. When you choose a pet insurance policy, it’s important to read the product disclosure statement carefully, as these can all vary depending on the provider and the policy that you elect.

As a general guide, Vous adds that most Australian pet insurance companies reimburse 80% of medical costs, and cap of annual rebates at around the $20,000 mark. Some pet insurers—such as Petsy, Trupanion and Knose— allow you to claim up to 90%, while others such as Woolworths and ahm set their maximum limits as high as $30,000.

However there are also other limitations and caveats to consider, such as higher costs if your pet is of a certain age and therefore more likely to need veterinary care, or premiums based on the risks associated with your pet, which may be due to its species and breed.

As stated, the cost of pet insurance varies due to a variety of factors, such as:

• Pet’s breed. Some pets are more susceptible to certain conditions than others. For this reason, it may cost more to insure certain pets. For example, larger dogs usually cost more to insure.
• Pet’s age. As pets age they are more susceptible to accidents and illnesses.
• Pet’s gender. Female pets may be considered a lower risk, which can result in lower pet insurance premiums.
• Location. Vet costs vary by location. If the vet costs are higher in your area, you may pay more for coverage. Additionally, if you live in an area that is more prone to ticks and snakes, you may also pay more for coverage due to the higher risk of needing treatment.

ASIC states that basic pet insurance in Australia generally costs around $20-$60 each month, coming out at around $240-$720 a year. Vous says comprehensive plans can reach $100 per month, depending on the above factors.

And while that may seem like a lot, it’s certainly much cheaper than the out-of-pocket cost you may face if your pet runs into health problems.

“An average vet visit would be over $200 these days [and it’s] common to see bills over $1000 as most procedures requiring anaesthetic (e.g dental, lump removal),” Vous explains.

“Specialist and emergency centres commonly see bills over $8000-$10,000,” she adds, with said $100 monthly bill for comprehensive pet insurance paling by comparison.

Insurance companies aren’t in the business of paying more out in claims than what they take in in premiums. But that doesn’t mean the odds are always against you. If you get socked with a large, unexpected vet bill, what you’ve paid in premiums can be far less than what you receive in reimbursement. And that’s the main point of insurance: to have financial protection against large disasters.

Here’s one scenario:

• Premiums: Suppose you’ve been paying for pet insurance for your dog for three years at about $684 a year. That’s $2,052 so far in pet insurance premiums.
• A big vet bill: Then your dog ingests one of your toddler’s toys, which ends up costing $4,000 in vet bills. If you have a $500 deductible and a 90% reimbursement level, your out-of-pocket cost for the incident would be $850 ($500 deductible + 10% of 3,500 = $850).
• The result: Adding up premiums for three years and the toy incident, you’ve paid $2,902. Without pet insurance, you would have paid $4,000 for the vet. You’ve avoided paying about $1,100 by having pet insurance.

When deciding if pet insurance is worth it, ask yourself:

• What are you willing to pay out-of-pocket for vet bills?
• How would you pay for costly vet expenses if something did come up, like an accident or an illness such as cancer?

You might have an idea right now of how much you’d be willing to pay in vet bills for an emergency. But “imagine not being able to afford to help your pet when they’re suffering and they need you”, Rous says, if faced with a life or death situation that’s outside your financial capabilities.

“It’s a no brainer for me.”

Another alternative to taking out pet insurance is putting a certain amount of money aside in an account you won’t touch, that will act as your monthly “premium”. You can then access this money should the need arise.

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