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Why you should stop wasting $300 every year on this one thing

No pet insurance policy is really worth the money, according to Choice. (Photo: Getty)
No pet insurance policy is really worth the money, according to Choice. (Photo: Getty)

Australian consumer advocacy group Choice is all about sorting through the good apples from the bad – but when it comes to pet insurance, Choice isn’t sure you should buy any at all.

Pet insurance costs cat owners an average of $246 per year for cat owners and $293 for dog owners.

But is it worth it?

“We've reviewed 86 pet insurance policies and haven't recommended any due to their many restrictions and the lack of competition in the market,” said Choice.

For a long time, there were only three pet insurance providers on the market in the country, with newcomer Trupanion bringing the number to four.

But the premiums for pet insurance is not only expensive, costing anywhere between $180 to $4,500 a year, but it’s confusing too, Choice said.

“There are lots of tricky exclusions and variations between policies that mean you really need to read the fine print to avoid your claim being rejected.”

There are loopholes you need to keep a sharp eye out for, said Choice pet insurance expert Uta Mihm.

For example, if your pet gets an illness they’re not vaccinated for, it won’t be covered. But in other policies, even if your pet’s vaccinated against that illness, you still might not be covered.

"There is also quite often a cap on cover for the treatment of swallowing objects – some policies have unlimited cover for this, whereas some will only cover you for once or twice a year – not ideal if your pup has a tendency to ingest foreign objects," Mihm added.

On top of that, once you’ve picked a provider, you’re basically stuck with them as it’s impossible to find a better deal anywhere else, said the advocacy group – you can’t shop around with your pet insurance the way you can with health insurance or travel insurance.

“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 (including premium increases, reduction in coverage percentages, added exclusions, and reduced payment limits and sub-limits).”

With so many things to consider, if you do buy pet insurance, it’s crucial to shop around as the costs can vary widely, said Mihm.

“Ensure you are comparing apples with apples, keeping an eye on co-payments, excesses and exclusions.

“You need to make a careful decision as it's really hard to switch once you've committed to a provider."

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