Pet insurance gives paws for thought28 Sep 11 07:00AM EST |
Growing up on a farm gives you a pretty good idea of the ups and downs of pet ownership. From our cigarette-stealing sheep (no more leaving them in the glove compartment after that) to miniature horses and donkeys running alongside the dogs in the backyard, I’ve had pets in all different shapes and sizes.
Regardless of what type of animal you’re dealing with, though, there’s one thing that generally doesn’t change – at some point in their life they will get up to mischief, and vet bills aren’t cheap. Data CHOICE received from the Hollard insurance company indicates that, in some cases, claims have shot up over 500% just in the last two years.
Part of this can be explained by the fact that more treatment options are available to pet owners, especially for ongoing conditions like diabetes. However, it also goes to show that we’re willing to spend more. For many of us, pets are part of the family. Some pets even have Facebook pages; one in 10 people in the UK set-up a Facebook page for their pet according to a study by Petplan.
Recently at CHOICE, we evaluated and analysed pet insurance products on the Australian market, and we have received since a number of stories of the lengths people will go to for their pets. There’s a real ‘spare-no-expense’ approach for some pet owners, but as resident financial writer, I also need to ask the question – are we financially prepared to make these (often emotional) decisions?
If like many people you don’t have a clear financial plan to look after your pet, it may be time to start considering your position and your options. Apart from the trusty (and potentially expensive) back-up credit card, there are options to look after your pet regardless of your budget as long as you don’t mind doing some planning.
For a start, you could self-insure. It’s not ideal in a worst-case cost scenario, but if you have a low-risk house cat or your budget is particularly tight, putting money aside into a high-interest savings account could get you out of trouble. Unlike insurance, there’s no restrictions or exclusions and if you don’t use it you get your money back.
However, like all self-insurance, you may need more than your budget can cover, and you will need time to build up funds to a healthy level, ideally a few thousand dollars (fingers crossed, no claims in the meantime).
That leaves us with pet insurance, and it has its benefits, but you really need to be aware of the tricks and traps involved in this type of insurance. As always, you must take time to read the restrictions and exclusions. Most policies will also only cover a portion of the bill, leaving you with a co-payment. In our cost modelling, policies covering a higher portion of the bill always delivered more value in the event you need to make a decent claim.
Whatever you decide, if you have pets, it’s worth thinking about what you will do if something goes wrong. A solid plan now can save you a lot of trouble later, especially if your pet is part of the family.
Do you have a financial plan for your pet? Check out our latest pet insurance report and some hot tips to look after your furry friends.