PET PEEVES – PET INSURANCE AND YOU
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1 FINANCIAL RIGHTS LEGAL CENTRE | FACT SHEET |PET INSURANCE
legal advice about your situation.
Your dog Spot and cat BooBoo are your best friends – a part of
your family. And you look after them just as much as you would
yourself. If anything were to happen to Spot and BooBoo you would
be devastated. You take them to the vets and there in the surgery
are flyers for pet insurance. You’ve seen the flyer’s in your vet’s
reminder letters and bills. You’ve also seen the ads on TV. And you
think to yourself: I insure myself with health insurance and my car
with car insurance, so I should really insure Spot and BooBoo. It’s
the right thing to do – the responsible thing to do to have Spot and
BooBoo covered right?
The answer is not so straightforward.
CASE STUDY 1
Sandra is a disability support pension and she insured her dog
Hunter 10 years ago when Hunter was 8 weeks old. Originally
the premiums were $35 per month. Sandra continued to insure
her pet every year as the policy guaranteed continued benefits
for chronic conditions. Hunter had developed a skin condition
and needed ointment prescribed by the vet. After 8 years she
cost of the premium was now $106 per month or $1270 per
annum. This increase was a 158% increase in cost. In addition
to the premiums increasing steadily, the excess for each claim
increased from $150 to $200 and when Hunter turns 9 she
will also have to co-contribute 35% of each vet visit. Sandra
is shocked, her annual premium now represents 6% of her
income.
WHAT IS PET INSURANCE?
Pet insurance is a contract of general insurance that is taken out to
cover the cost incurred when your pet is injured in an accident and/
or falls ill. Some pet insurance policies also provide so called routine
or wellness care.
When you take out a policy you are covered for the events set out in
the contract of insurance for the stated period of insurance. This is
generally 12 months. When making a claim you will, like most other
insurance, pay an excess or co-payment.
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 CASE STUDY 2

Jenny has 2 dogs, Ginny and TonTon. Ginny was having a seizure and
was really unwell after playing out in the paddock. Jenny rushed
Ginny to the vet, and the vet suggested that Ginny may have been
bitten by a snake. The vet recommended that Ginny be given some
anti venom treatment. Jenny agreed as she knew she was insured.
The bill came to $600. The dog recovered, but it turns out it wasn’t
a snake bite the dog just collapsed out of exhaustion, but the vet is
not sure. Jenny claimed on her insurance and was advised it was not
covered for prophylactic or preventative treatment. As it was not a
FACT SHEET
snake bite, then the claim for $600 would not be covered.

WHAT ARE THE MAIN ISSUES WITH PET INSURANCE?

There are a number of issues you need to consider before purchasing pet
insurance.

Insurers have the final say on whether they will insure you and your pet
and under what terms

At the renewal date each year the insurer can decide whether to:

• offer to insure you for a further 12 months and on what terms; or

• decline to re-offer you insurance leaving you uninsured.

Your insurer can decide not to reinsure you at all! Some insurers may
guarantee renewal, but only on certain conditions and with limitations
including increasing costs of claims with co-payments and excesses.

If an insurer decides to re-offer you insurance they may:

• Change the cost of the premiums;

• Change the wording of the policy in the Product Disclosure

Statements and the terms of the cover by inserting exclusions or
conditions;

• Reduce the insured amount;

• Change the excesses or your contribution to claims such as co-

payments;

Unlike health insurance in humans, pet insurers can decide they just don’t
want to insure Booboo for her chronic Lower Urinary Tract Infection or
they may increase the premiums so much you can no longer afford to

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2 FINANCIAL RIGHTS LEGAL CENTRE | FACT SHEET | PET INSURANCE

 retain the cover. This can be particularly distressing, if you wanted to
maintain the insurance into the critical later years of Booboo and Spot’s
lives.

Premium increases

As indicated above premiums may increase significantly. This could be

because of the age of your pet, its breed, the overall claims you have
made, and the overall performance of the insurer. Some of these things
will be out of your control and you won’t be able to predict. A policy that
started off at $36 per month could 5 years later be $114.

When this happens with other insurance products like car insurance,
FACT SHEET you usually can empower yourself by shopping around to find a better
deal. But with pet insurance, you can find yourself trapped with the one
provider because as Spot and BooBoo age they will accrue sicknesses,
symptoms, injuries and illnesses. These conditions will form “pre existing
conditions” which can mean that new insurers will exclude claims for the
same problem going forward.

WHAT PET INSURANCE TERMS SHOULD I LOOK OUT FOR?

To add to the complexity of it all, some insurers may:

• guarantee continuous cover for some but not all conditions in

some breeds but not others but only where there is no break in
cover;

• ask for co-payments;

• apply higher excesses for some conditions and not others;

• set limits for some types of claims;

• cover accident only;

• not cover preventative or exploratory treatment;

• offer extra’s like emergency boarding or routine care;

• exclude bilateral conditions – so where your dog had a pre existing

condition in one eye the other healthy eye is excluded completely.

• have waiting periods where if your dog shows a symptom in the

waiting period the condition is excluded.

Beware - insurance contracts are not covered by the normal consumer

protections regime. This can mean that contracts can be littered with
terms that are unfair. Other Terms to watch out for as well as those
highlighted above, include:

• Automatic renewals – where the premiums will just continue to be

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3 FINANCIAL RIGHTS LEGAL CENTRE | FACT SHEET | PET INSURANCE

 debited from your account until you take action to stop them;

• Cancellation terms where you get no refund of premiums for

unused portions of cover or administrative fees;

• Cancellation terms requiring cancellation in writing only and not

over the phone or by email; and

• notice requirement of claims.

Every pet insurer is different. Some insurers provide better value for
money than others and some are just expensive junk with limited cover.
It’s important to shop around, read the product disclosure statements
FACT SHEET and understand how it might respond to different scenarios. Inform
yourself before making a decision.

WHAT ARE THE ALTERNATIVES TO PET INSURANCE?

Consider whether you really need pet insurance at all? Is it worth the
money? Some simple alternatives to purchasing pet insurance to consider
are:

Open a high interest savings account: Open a high interest savings

account you call “Spot and Booboo’s health fund” and simply deposit
either what you would’ve paid on pet insurance premiums or a small
payment depending on what is affordable to you at the time. With your
own savings account there is no risk that your payments will be lost if you
miss a few payments, or even completely stop making payments. Your
money is safe, and will continue to accrue interest.

Check your home and contents insurance: Take a look at your home and
contents insurance – does it offer pet insurance as an optional extra for
accident and liability? Many policies these days do and this could be a
cheaper option for you and your family. But make sure that before you do,
read your PDS and understand how your policy works, so you can make
informed decisions.

NEED SOME MORE HELP?

See Fact Sheet: Getting Help for a list of additional resources.
Last Updated: February 2017

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4 FINANCIAL RIGHTS LEGAL CENTRE | FACT SHEET | PET INSURANCE

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5 FINANCIAL RIGHTS LEGAL CENTRE | FACT SHEET | PET INSURANCE