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Pet insurance: Is it a dog’s breakfast or the purr-fect play?

I was talking to someone the other day who has a hard-and-fast cut-off for the cost of care for her pet pooch: any procedure incurring a vet bill of over $5,000 doesn’t happen.

And someone else chimed into the chat: “We outlaid $3,000 when our cat got a tick. There was the possibility she would need ongoing care and we decided we just had to draw the line before that.

“Fortunately, she recovered well.”

As clinical as it is to suspend the ‘spend’, or apply a pass/fail pet survival threshold, it speaks of an escalating expense some owners cannot afford… and sometimes forget to factor in.

The first year of ownership – with vaccinations, micro-chipping and de-sexing – can be particularly expensive.

This is also on top of big spikes in the purchase price of many animals as Australians sought companionship during seemingly interminable lockdowns.

The ‘Pets in the Pandemic’ study by Animal Medicines Australia last year found 26 per cent of pet owners bought at least one more pet during the pandemic with the number of households with multiple types of pets rising from 22 per cent to 27 per cent in the past two years.

This was led by a spike in purchases of puppies, for which you can easily part with $6,000 or more for a sought-after breed.

This means there are some 30.4 million pets in Australia today.

And there are now 69 per cent ‘pet-owning’ households, up from 61 per cent in 2019.

Indeed, Australia has one of the highest rates of pet ownership in the world.

Of non-pet-owning households the report says: “The on-going costs of care are the strongest deterrents for those who want to add a dog or cat.”

It puts the annual expense, including food, grooming, walking, training and pet-related paraphernalia, at $4,422 for a dog and $3,356 for a cat.

But what, specifically, about vet bills?

The cost of good pet health

New research exclusive to Yahoo Finance, from Finder, suggests the collective annual cost of visits to the vet topped $4 billion in the past year.

Almost one-in-three Aussies (30 per cent) have taken their pet to the vet once or twice in the last 12 months, with 11 per cent requiring three or more visits.

A lucky 23 per cent have had a 12-month reprieve.

At what expense? An average $574 per visit.

As Gary Hunter, insurance expert at Finder, confirms: “People [who do buy a pet] tend to focus on the cost of obtaining a pet without factoring in how much it can cost each year to feed and care for, especially if they need medical treatment, which can be pricey.”

Of course, pet insurance claims to defray the dollars you are up for. And RSPCA figures reveal that, in 2019, 30 per cent of households with dogs and 21 per cent of households with cats held it.


The pros and cons of pet insurance

Firstly, due to the costs associated with owning a pet in the first year, some owners drop their pet insurance swiftly or after, say, year five.

But that can be a particular risk if you own a breed prone to particular and expensive illnesses. On the flipside, you will also possibly pay significantly more to insure breeds with known common congenital conditions, that are likely to work out expensive.

And the older an animal, of course, the more likely it is to suffer from ailments.

While the cost of treating serious illnesses can mount to thousands, especially if surgery is required, pet insurance can be as little as $50 per month.

It may come with significant exclusions though. For example, that $3,000 bill for a tick at the top of the article? The pet insurance capped that condition at $1,000.

There are often similar stringent limits on cheap-and-cheerful pet insurance policies in particular.

Indeed, with pet insurance, just like with ‘human’ insurance, you want a quality not bargain-basement product. Some policies come with holes you could drive, well, a horse float through.

In fact, CHOICE gave the entire industry a ‘shonky’, name and-shame financial product award in 2019.

But its website says: “Since then most insurers have engaged with CHOICE and made positive changes to their policies.”

Several years ago, there were also only two underwriters of pet insurance in Australia – the outfits behind-the-scenes that actually pay or deny your claims – now there are more and therefore more competitive products.

The CHOICE website features a handy guide to help you decide whether pet insurance is right for you.

Of course, diligently saving the, say, $50 a month – and self-insuring – could also leave your pet entirely covered… with leftover for you.

Whatever you decide for your household’s animals, it’s important to plan for the potential health expense.


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