It’s one of the most frequently asked questions we see on dog forums. Do I need Pet Insurance and if so, what should I be looking for? Jess from Dogshare catches up with Tiaan at Knose to ask all the questions pet owners need to know when considering Pet Insurance.
Jess: Tiaan it’s lovely to catch up with you again, can we start with the basics, what is pet insurance?
Tiaan: Insurance is a contract (policy) in which an insurer indemnifies its customers against losses from specific contingencies or perils[1]. Pet insurance is simply a class of insurance in which the insurance provider agrees to pay, or partially pay the cost of eligible veterinary treatment incurred by pet owners for unexpected injuries or illnesses. Pre-existing medical conditions are generally excluded from cover.
Jess: Why does pet insurance exist?
Tiaan: Pet insurance exists to help pet owners cover the cost of injuries or illnesses that end up costing a substantial amount of money. Often as life would have it, these events can happen at a time many pet owners can ill afford it. So, the benefit to pet owners is that pet insurance allows them to swap the uncertainty of significant and random financial outlays for predictable and affordable premiums, typically offered as regular monthly instalments.
Jess: So pet owners can swap the ‘unknown’ of large emergency vet bills, with the predictability of monthly payments.
Tiaan: That’s right. This is very much the key to why Pet Insurance exists. The insurer manages the risk they take on by having thousands of insured pets, smoothing out the impacts of large and irregular claims for any one pet.
Jess: Can veterinary care really be that expensive that I need to take out insurance for my pet? And if so, why?
Tiaan: Veterinary science has advanced in lockstep with human healthcare over the last couple of decades. The significant progress in veterinary science offers sophisticated treatments such as MRIs, CT scans and chemotherapy to diagnose and treat sick or injured pets. Treatment costs can add up to tens of thousands of dollars in some circumstances. Unlike human healthcare, there is no Medicare or safety net for pets. Pet owners seeking veterinary treatment for their pets are responsible for every dollar incurred, unless they have pet insurance.
Jess: Got it. So, advances in vet care mean more complex treatments are available, but without a Medicare rebate. Whilst it’s a win that we now have better treatment options for our mates, the costs of such specialised care can really spiral.
Does pet insurance also cover any preventative care?
Tiaan: Planning for preventative treatment is something all pet owners should do as responsible pet owners. Our pets give us so much joy, the least we can do is look after them and their health as best we can. However preventative treatment is not the core function of pet insurance, which is primarily about uncertain events.
Some pet insurance providers offer ‘routine care’ cover for items such as vaccinations, health checks, desexing and parasite preventions. The routine care offered on these policies typically has an allowance of about $100 per year.
Jess: OK, that sounds good, is there anything pet owners should look out for with this type of cover?
Tiaan: With insurance cover for ‘routine care’ you are unlikely to be able to claim the whole $100 for a single event such as a vaccination or health check. The routine care usually contains sub limits restricting claims to a lower limit, of say $25 for each item such as parasite control, health checks and vaccination, possibly leaving you with substantial out-of-pocket expenses. I recommend that every policy holder reads the Product Disclosure Statements of the polices you are considering purchasing.
Jess: Great tip, that’s something to look out for. You really can’t get away without reading a PDS can you?
Tiaan: No, unfortunately not! I always recommend you read the PDS carefully. Also, just because preventative care cover is not, in my view, ideally suited to insurance, that does not mean there aren’t good solutions available to make everyday pet care easier.
Many veterinary clinics and even some pet insurance providers, such as Knose, offer pet care plans, designed specifically to reduce the hassle and cashflow challenges associated with preventative care.
Jess: What does Knose offer in this space?
Tiaan: Knose’s pet care plans offer simple, stress-free pet care for a flat monthly fee.
This includes:
- an allowance for vaccinations, check-ups and desexing
- making budgeting easier with flat monthly payments; and
- parasite protection, delivered in the mail, when your pet needs it
Jess: That does sound good! Talk to me about exclusions. That seems to be such a common point of frustration with insurance. What are some of the common exclusions with pet insurance?
Tiaan: Most pet insurance policies, in Australia and overseas, do not cover pre-existing conditions. These are injuries, illnesses, or conditions your pet has shown signs or symptoms of, or that you suspected or knew existed before you purchased insurance or that became symptomatic during an applicable waiting period. These are excluded as insurance is designed to protect against uncertain future events. Once an accident has occurred or a disease process has started, it is too late to insure against that risk.
There is a silver lining though. Most insurance providers recognise that not all conditions are permanent. Certain conditions that were present before insurance started may be covered again in future after your insurer is satisfied that the initial condition has resolved. These review periods can range anywhere from six months to two years, depending on the condition. That said, some conditions are not curable, for instance diabetes, and pre-existing exclusions for such a condition will likely not be lifted.
The majority of insurance providers will also not cover diseases for which a vaccine has been approved. Knose takes a slightly different approach here too, believing that if a pet owner has done the right thing and vaccinated their pet, they should be covered in the rare circumstance their pet experiences a breakthrough case. Note that we do require reasonable documented evidence that the pet’s vaccination was current at the time of the illness, which includes the brand and batch number of the vaccine administered as confirmed by your vet.
Most polices do not cover dental illnesses and behavioural problems. However, some polices provide optional extras catering for conditions like dental illness, behavioural problems, and alternative therapies.
Finally, most polices exclude large scale events such as nuclear war, pandemics and the like. It is important to read the Product Disclosure Statements of the polices you are considering purchasing.
Jess: Golly, pandemics! It’s a lot for customers to take in, but these tips on what to look out for should certainly help. OK, so can you take your pet to any vet, or is this prescribed by the insurer also?
Tiaan: Most pet insurance products allow you to attend any registered vet in Australia.
Jess: That’s great, last question, which I think a lot of people would love to know more about, is it possible or worthwhile to get insurance for older pets?
Tiaan: Yes, it is possible to get cover for older pets. Most insurance providers allow pets to join up to their 9th birthday for complete cover and those that offer an “accident only” plan will typically allow pets of any age to join that product. However, once a pet has been insured, most providers will allow them to stay on for life, so called ‘lifetime cover’.
Owners of older pets should be mindful that their pets have a higher likelihood of having developed medical conditions during their life and are more likely to have pre-existing exclusions on their polices. In fact, this is the main reason most insurance providers will not allow pets older than nine to take up comprehensive cover for the first time. The younger the pet is when pet insurance is purchased, the lower the risk the pet owner will be impacted by pre-existing condition exclusions. Most providers will open insurance from 8 weeks of age with a few allowing puppies as young as 6-weeks old to be covered.
Jess: Tiaan thank you so much for letting me ask you these questions about pet insurance, I think I have a much clearer picture now on what to look for in a good Pet Insurance or Preventative Pet Care.
Resources:
See a list of vaccinatable diseases here (Scroll down to Vaccinatable Diseases for a current list)
Read up on Pre-Existing Conditions here