Should you insure your pet?

Ruth Jackson explains how pet insurance can help you avoid a hefty bill next time you visit the vet.


Treating your pet can get expensive
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Pet insurance is nice to have. You don't have to have it by law, but if you don't you could be faced with a whopping vet's bill if your pet falls ill. Yet peace of mind does not come cheap: the average dog costs £366 a year to insure. So is it likely to be worth the cost?

Veterinary science has advanced greatly over the past 30 years. It is now possible for cats to have chemotherapy, missing legs to be replaced with bionic limbs, and chronic conditions that would once have resulted in a pet being put down can now be treated with medication the animal has to take for its lifetime. These breakthroughs are often expensive chemotherapy can result in a bill for £5,000, while surgery costs an average £1,500. The average pet insurance claim is for £720, according to the Money Advice Service.

However, pet insurance isn't just about covering the medical costs associated with your pet. It also pays out if your dog or cat is lost or stolen. It may seem cold-hearted to think about the costs involved in replacing a beloved pet, but given that pedigree cats and dogs can cost thousands of pounds, and the fact that pet theft is on the increase, it could make sense to insure against this risk.

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As an alternative, you might want to consider "self-insuring". This involves putting aside a set amount of cash every month to cover potential vet bills. However, you will need to be disciplined about this, cautions the Money Advice Service. Bear in mind that you might need to pay the vet before you've saved up enough money to cover bills. And if your pet develops a chronic condition, it would be very difficult to find affordable insurance at that point. Also remember that you'll need to be saving for routine things such as teeth cleaning or worming in any case (these expenses would not be covered by an insurance claim).

There are groups in the UK that run free pet hospitals, including the Blue Cross and the RSPCA. However, these are generally underfunded and overstretched. Ultimately, unless you have a lot of spare money in the bank and are prepared to spend it on an animal pet insurance can be valuable safety net.

How to choose the best policy

Choosing the right pet insurance policy isn't as simple as picking the cheapest deal on a comparison website. There are several factors to consider.There are three main types of policy accident only, annual and lifetime. The first is self-explanatory and best avoided, since 70% of pet insurance claims are for illnesses rather than accidents, according to consumer group Which. With annual cover, you pay for 12 months' cover on a rolling basis.

This is fine for injuries or illnesses that can be resolved quite quickly, but can leave you unstuck if your pet needs long-term medication, as the insurer will stop paying out after 12 months and a new insurer won't cover existing conditions. Lifetime cover is the most comprehensive policy, covering your pet for illnesses and injuries no matter how long they take to treat. Naturally, this kind of cover is going to cost you the most.

However, there are some ways you can keep your premiums down. The higher the excess, the lower your premiums will be so consider opting for a higher excess if your pet is young and healthy. If you haven't purchased your pet yet, avoid a pedigree breed. Cross breeds tend to have fewer health problems, and are less likely to be stolen, so they are cheaper to insure. Make sure you shop around the first time you buy pet insurance but don't switch policies every year.

If your pet is absolutely healthy and you've made no claims on your insurance, you can shop around year after year, but once you've made a claim a new insurer may not cover you for whatever the claim related to, so check before you switch. Lastly, be aware that some firms may quote low initial rates only for premiums to shoot up in subsequent years.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.