On average, annual vet expenses are estimated at $354 for dogs and around $234 for cats
But that doesn’t include medications, surgery and emergency treatment
Making a claim is much easier than it used to be, with some insurers paying the vet directly so you don’t have to pay upfront
There’s no doubt that we Australians love our pets. There are currently an estimated 31.6 million pets in Australia, with 73% of households having a pet.
Of course, love isn’t always enough. To care for our pets, we need to set aside money for food, routine treatments, and unfortunately often treatments for injuries and illnesses.
Bills for major surgery and treatment can run into the thousands of dollars, and there’s no Medicare for pets, so you’ll have to foot the bill. And of course you just can’t predict when your pet will get sick or hurt.
Bills for major surgery and treatment can run into the thousands of dollars, and there’s no Medicare for pets
Pet insurance is one way to buffer yourself against unexpected vet bills, so you don’t have to weigh up whether or not to go ahead with surgery or treatment for your four-legged friend.
It’s hard to imagine losing a pet because you can’t afford to pay the vet bills. But is it worth taking out pet insurance for peace of mind? Here are the key points to consider.
Having pet insurance means that if an unexpected accident occurs or if your pet needs treatment, some or most of the financial burden will be covered and you can focus on getting the best care for your pet.
And you’re less likely to face the awful situation of having to euthanise your pet if you can’t afford expensive treatment – an animal lover’s worst nightmare.
Pro: Claims can be quick and easy
If your vet and insurer are set up for electronic claiming, lodging a claim and being reimbursed can be fuss-free and quick.
If your vet and insurer are set up for electronic claiming, lodging a claim and being reimbursed can be fuss-free and quick.
“Claiming in the past was horrible – lots of paperwork. It was almost as though they were trying to make claiming hard,” one pet owner told CHOICE. “It’s much better now that it’s all electronic straight from the vet.”
“It’s getting easier to claim these days,” another pet owner says. “My vet can send everything electronically through to the insurer.”
The first is a quick claims process, where if you make a claim during business hours it can be settled while you’re still at the vet. The second is direct-to-vet payments.
“Previously – and this is still the case with some insurers – you had to pay the full vet bill upfront, then claim your reimbursement from the insurer later,” says Daniel.
“For people who don’t have thousands of dollars on hand, this would make pet insurance almost useless for expensive treatments.”
“Now insurers are moving toward direct payments, so that you only have to cover the gap, just like using your extras at the dentist.”
These services require the clinic to opt in, so check with your vet if they’re in your insurer’s network.
The first year of your puppy or kitten’s life can be expensive. Things like desexing, microchipping and council registration are usually one-off fees that add up pretty quickly. And that’s before you add in routine care vaccinations and worm and flea treatments.
Routine care cover is an optional add-on that can take some of the sting out of paying all these costs at once.
“Routine care is an inexpensive extra that covers the cost of items not usually included in your regular policy,” says Daniel.
“It can be good value in the first year of your pet’s life. As an ongoing benefit it can also pay for some preventative care items like blood tests, vaccinations and parasite control.”
If you want pet insurance, we recommend getting it when they’re still young before they develop any condition that might restrict your cover.
The cons of pet insurance
Con: Pet insurance can be expensive
Owning a pet comes with many financial responsibilities. On average, annual vet expenses alone are estimated to cost close to $350 for dogs and around $270 for cats – and that’s before you factor in medications, surgery and emergency treatment.
With all these potential bills on your pet ownership horizon, pet insurance may seem like a wise choice.
But with pet insurance premiums increasing year on year and many of us already struggling with the cost of living, the extra cost may be too much for already-stretched budgets.
Breed is one of the biggest price factors, especially for dogs
Daniel Graham, CHOICE insurance expert
Various factors can affect how much your pet will cost to insure. One of these is your pet’s breed, which can have serious implications on their health, welfare and subsequent medical costs throughout their lifetime, and can make a huge difference price-wise.
“Breed is one of the biggest price factors, especially for dogs,” says Daniel.
“Insurers know which high-risk breeds are going to need expensive treatment over the course of their life, and will set their premiums accordingly.”
Putting aside cash in a separate high-interest bank account specifically for vet expenses may be a better option and can give you more security, as you’ll always have the money available, whereas your insurer could knock back your claim.
Con: Pre-existing conditions can make it tricky to switch
Despite some improvements since 2019, when we gave the whole pet insurance industry a Shonky Award, cover for pre-existing conditions is still a sticking point.
A pre-existing condition is an illness or injury your pet had before you first took out the insurance policy, and they are excluded by default from every policy in our comparison.
You can still get cover, if you meet the insurer’s requirements. Each one has different rules.
Some still don’t cover pre-existing conditions at all. In most policies, a pre-existing condition can be eventually covered if it is “temporary”, meaning it can be resolved with treatment.
If your pet hasn’t shown noticeable signs or symptoms of the condition in the 18 months before you make a claim, then the insurer won’t treat it as an excluded pre-existing condition. It’s like a waiting period in health insurance, except if your pet does get sick then the waiting period starts again.
Chronic conditions like cancer, diabetes or seasonal allergies can be almost impossible to get cover for as a pre-existing condition. If your cat develops diabetes while insured, your insurer will cover it. But if that insurer starts price gouging at renewal, or changes their policy in a way you don’t like, your options to ditch and switch become very limited.
“Moving to a new policy usually means accepting that you won’t have cover for your pet’s ongoing medical issues, only their new ones,” says Daniel.
“Pre-existing condition exclusions mean that pet owners can be faced with having to pay a loyalty penalty to the only insurer that will cover them, or go without cover for their chronically ill animals.”
These are some pre-existing health issues that you could be covered for:
Your dog had gastro as a puppy and develops gastro again a few years later, but for a different reason.
Your pet has a new, unrelated injury on a previously broken leg that’s now healed.
After a benign (non-cancerous) lump was removed, your pet develops a different type of lump.
Of course this differs between insurers, so check your insurer’s policies to make sure you know where you stand. For more details on the cover from different underwriters, see our pet insurance buying guide.
Con: Price increases could make pet insurance unaffordable
The way most policies are structured means that premiums increase as your pet ages.
“Premiums for new policies tend to be lower for younger pets,” says Daniel.
“This is partly because younger animals have fewer medical needs, and partly because the insurer wants to encourage you into insurance as early as possible.”
The way most policies are structured means that premiums increase as your pet ages
“I changed pet insurers in the last 12 months due to my original insurer having significant premium increases,” one pet owner told us.
“I cancelled our policy after five years because the premium went up substantially after each claim,” says another pet parent. “Not worth having.”
Con: You need to buy it when your pet is young
“If you think pet insurance is right for you, you should get cover while your pet is young,” says Daniel.
“The earlier you get insurance, the less likely your pet is to develop a pre-existing condition that will be tricky to find cover for.”
It’s a good idea to take out insurance from when your pet is as young as three months old. (And remember that add-on routine care cover can come in handy in their first year of life.)
Most policies have a maximum age for new business, generally at nine or 10 years. Once your pet hits that age you’ll find it even harder to switch. The pool of available policies will shrink to mostly low-benefit products, running the risk of leaving you significantly out of pocket anyway.
Con: Finding cover for rescue pets can be difficult
One pet owner found out the hard way that insuring a rescue animal can be all but impossible.
“I am unable to insure my dog as she was a rescue dog. Because she’s of uncertain age and had no medical history I was unable to take out pet insurance,” they told us.
“Since then she has had an ECG, ultrasound and blood tests every three months for liver problems. Ironically, with my previous dog I didn’t need to access her insurance as she had no health problems!”
Con: Your cover may change
Pet insurance providers currently have no legal obligation to maintain the competitiveness of your policy and can make any changes they like when you renew annually. These changes may include:
premium increases
reduction in coverage percentages
added exclusions
reduced payment limits and sublimits.
This can make it difficult to budget for costs associated with your pets, and means you can’t be sure your pet will be covered for certain conditions or incidents as they age.
And while premiums increase with age, cover could decrease.
Some policies have conditions where they’ll pay, for example, 100% of the claim when your pet is young (usually as long as they’re aged below eight, but with some policies and dog breeds, it can be as young as three).
But as your pet ages, this payment can drop to as low as 65%, and you’ll have to foot the rest of the bill. This isn’t helpful when you consider that your pet is likely to need more vet care as they grow older.
The majority offer comprehensive accident and illness cover. Most of the rest have comprehensive cover for illness, and cover a specified list of accidental injuries (think motor vehicle incident, bone fracture, snake bite).
There is one accident-only policy, and one that broadly covers accidents, but then a very limited list of illnesses.
All policies cover the cost of surgery, hospitalisation and medicines, but things such as dental care, vaccinations, desexing and preventative treatment are usually only covered as optional extras, with extra sublimits.
You should always check the amount of co-payments, excesses and caps. For example, most policies have a cap of around $300 on veterinary consultation fees (which you’ll spend quite quickly if your pet has a chronic illness).
Pet insurance is already a complex financial product. Some insurers make it more complex by adding sublimits and claim caps to individual conditions
Daniel Graham, CHOICE insurance expert
“Pet insurance is already a complex financial product. Some insurers make it more complex by adding sublimits and claim caps to individual conditions,” says Daniel.
“For example, some policies will say you can only claim for swallowing foreign objects once or twice a year.”
So, your policy may have a $12,000 overall annual limit, but a sublimit of $1000 for things like treatment for tick paralysis, or $2600 for cruciate ligament surgery (and these can be particularly expensive to treat).
While some insurers make lodging claims easier with electronic lodgement processes, having that claim accepted can be quite a different matter.
One pet owner we spoke to spent nearly six months trying to get their insurer to accept a claim, only to have the insurer lose the paperwork and claim that the vet didn’t send the correct documentation for the injury, then claim that the injury was elective surgery.
“I wrote numerous letters and made numerous phone calls trying to clear the matter up,” they say. “Needless to say, as soon as they finally paid the claim, I cancelled the insurance.
“Then [the insurer] stated that they would continue to debit my account for the remaining premiums for the year (several months’ worth). After further complaints and some intervention, they finally reimbursed me the premiums they had taken from me after I cancelled the policy.”
One pet owner we spoke to spent nearly six months trying to get their insurer to accept a claim
Another pet owner told us: “They tried to not pay out for an ear infection for our dog as he has a grass allergy on his torso – they claimed it was preexisting. We noted that a skin allergy is different to possible ear mites and they paid up.”
How to decide if pet insurance is for you
While pet insurance has improved, you still need to work out if it’s worth it for your circumstances. To help with the decision, Daniel suggests the following steps:
Talk to your vet. Ask what conditions your pet could develop later in life and what the treatment would cost.
Get quotes from several insurers. Compare cover, cost, excess, cover percentage and sublimits.
Consider whether it would be better to set up a special bank account and save the pet insurance premiums.
If you are going to take out insurance, consider doing so early in your pet’s life, before they’ve developed any health conditions.
If your new pet still needs council registration, desexing and vaccinations, check if the pet insurer offers optional routine care cover for those. The extra cost may be worth your while, especially for the first year of cover.
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
Find Pru on LinkedIn.
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
Find Pru on LinkedIn.
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