Is pet insurance worth it?

Pets are like family and when they get sick or injured, you can be faced with vet bills in the thousands. That's a difficult position to be in when you don't have the funds to treat them, which is why pet insurance can be an attractive option. "With no pet equivalent of Medicare subsidies, the full cost of treatment falls on the pet owner," says financial educator Lacey Filipich. "Insurance can help take the stress out of life, as well as help pet owners avoid going into debt if the worst happens." But pet insurance is a "complex financial product", explains Daniel Graham, insurance analyst at consumer advocacy group Choice, making it difficult to know if it's worthwhile. And insurance isn't your only option when it comes to planning for pet expenses. How much does pet insurance cost? A 2025 survey from Animal Medicines Australia shows Australian pet owners spent about $1 billion annually on pet insurance, but most don't have it. Eighty-six per of cat owners and 76 per cent of dog owners aren't covered. Responses to the survey include "it's too expensive", "I don't see the value" and "haven't looked into it". Recent Canstar data shows for accident and illness cover, the average annual premium for a cat is $807, and $1,374 for a medium-sized dog. Add in routine care cover and the premium typically increases by a couple of hundred dollars. Costs will also depend on the age and breed of your pet. What are the benefits of pet insurance? Peace of mind is the biggest benefit of pet insurance, says Ms Filipich. "Spending a few hundred to a couple of thousand dollars a year might be worth it for the certainty, especially when you know you'd pursue expensive treatments for your pet if they fell ill or were injured. "Gone are the days when the majority of people simply put down their pet when something went drastically wrong." Sign up to the ABC Lifestyle newsletter Mr Graham says veterinary costs in Australia are increasing, with the most significant driver being technological investment. "Like with human health, the technology to treat different conditions is becoming more widely available, and vet practices are purchasing that technology — that costs money." The ease of claiming has also improved, says Mr Graham. "Several insurances in recent years have introduced systems where they will process the claim while at the vet clinic, making the payment directly. "You as the customer simply have to cover the gap, which is a huge difference from a decade ago where the most common practice was to cover the bill up-front, then claw back a cheque from the insurer." The option to add routine pet cover may appeal to dog and cat owners, which covers things like blood tests, vaccinations and parasite control. What about the disadvantages? Put simply, pet insurance can be expensive, especially if your pet enjoys a long life. "You could be forking out tens of thousands of dollars in pet insurance," Ms Filipich says. A pet's age and breed are also major factors. "There is decreasing cover for older pets," says Mr Graham. "[Often] when you purchase the policy for a puppy or kitten, the insurer covers all of your eligible vet costs while young, then it tapers down as they age." For example, when your pet is eight years old, your insurance provider might cover 80 per cent of the vet bill. But at the age of 10, only 65 per cent is covered. "But this is the age your pet is most likely to need vet cover," Mr Graham says. And while cat insurance is fairly consistent across breeds, for dogs it varies greatly. Brachycephalic dog breeds such as French bulldogs, pugs and Boston terriers are flat-faced dogs with shortened skulls that face unique health risks, notably breathing and heat challenges. "They require a lot of medical treatment throughout their life, which is very costly to insurers," says Mr Graham. He says this makes premiums much higher. A monthly fee for a Cavoodle might cost you between $60 and $100, whereas a Frenchie will be $230 to $375, he adds. Other than high costs, the main drawback of pet insurance is the difficultly in switching to a new provider for pets with pre-existing and chronic conditions, says Mr Graham. All insurers have blanket exclusions for pre-existing conditions, such as an illness or injury your pet had before you first took out the insurance policy. "Some will agree to cover if you meet certain criteria … which it basically never does," Mr Graham says. "What ends up happening is that the ability to switch to a new product decreases, so you end up sticking with the same provider, even if they are increasing premiums or the service isn't good." Even if you can switch, your options are limited with older pets, he says. "They are usually limited to lower-cover products with lower annual limits." And policies are complex, Mr Graham says. "It's a lot for people to get their head around and feel confident they are making a good decision." He says pet owners are often surprised to find their cover doesn't include dental, for example. What it looks like to self-insure instead When you don't take out insurance, you're essentially self-insuring, Ms Filipich says. "You could choose to put what you would have spent on insurance aside for if or when illness or injury happens and use the funds directly instead of via an insurance process." For example, you could put the equivalent cost of the premium into a dedicated savings account (or demarcated offset account if you have a mortgage) each month or year, then draw on it when needed, she says. Mr Graham chooses to self-insure, a decision he made after paying $14,000 in vet care for his cat, Cyclone, a couple of years ago. "Not everyone is financially in that position and insurance makes more sense when you don't have a safety net." Because there are also many non-monetary benefits of owning a pet, those struggling to pay for their care can also reach out to a financial counsellor. Loading...