Is Pet Insurance Worth It?

When calculating whether pet insurance is worth it for your pet, it is important to understand what the overall costs of pet insurance will be over time, as your pet ages. As an illustration, in 2023 the average cost of treatment for skin infection / allergy in dogs under 1 year was $346, while for dogs over 8 years it was $601. In cats under 1 year, the average cost of treatment for gastrointestinal disease  was was $530 and for those over 8 years it was $854. (Source: Pet Health Monitor 2024).

There are many factors that affect the price of your pet insurance. We calculate your premium based on several factors. Some are pre-set and don’t vary, e.g. amounts we consider for some internal expenses. Others can affect the premium amount depending on whether we believe it increases or decreases the risk to us. For example, the type of cover and options you have selected. We’ll also take into account risk factors associated with you and your pet such as your pet’s breed and age. For instance, as your pet gets older the risk of your pet requiring treatment will increase and so the premium increases.

There are also commercial factors that affect your premium, including costs associated with operating our business and our commercial arrangements. Your premium calculation may also include discounts or promotional offers that we provide. If you qualify for two or more discounts, we apply a specific order to our calculation of your final premium.Also, any discounts and/or your premium may be rounded up or down and some may only apply in the first year of coverage.

To get an accurate idea of the cost of pet insurance for your pet’s particular breed and age, we recommend that you take a minute to get a pet insurance quote.

Cons of pet insurance

• Pet Insurance does not cover everything: It is simply not feasible for insurers to cover every potential situation that could happen to your dog or cat – this would cause pet insurance premiums to sky rocket and make it inaccessible to the majority of pet owners. Therefore, insurance policies typically have exclusions so that risk can be better managed. For example, most pet insurance policies in Australia do not cover dental work. There are also usually exclusions relating to declared pandemic diseases, voluntary euthanasia, pregnancy, elective or cosmetic procedures and pre-existing conditions (see below).
• You may be required to pay up front: Pet owners may need to wait some time until their claim is settled by their pet insurance company. However, Bow Wow Meow pays out more than 85%-95% of eligible claims within 5-10 working days from receipt of all supporting documentation, which means your rebate should be back in your account soon. We also provide GapOnly^®  claiming at participating vet clinics, meaning you only have to pay your portion and not the full amount up front.
• There is a usually a co-payment and sometimes an excess: Bow Wow Meow’s Peace of Mind plan covers either 60%, 70% or 80% of eligible veterinary expenses, depending on which percentage you elect when taking out your policy. This means that the policy holder will need to cover the remaining 20%, 30% or 40%. Note that there is no excess to pay on all of Bow Wow Meow’s current policies, so you can safely claim for even the smallest vet bills.
• Some conditions have sub-limits: Besides the overall annual policy benefit limit, policies usually also have sub-limits for certain items. For example, our policies have an annual sub limit of $2,600 or $3,200 (depending on the plan) for cruciate ligament claims.
•  Limited options if they do not have a policy before they turn 9 years old: Once a pet is over 9 years of age, if you want to take out a new policy, you will only be able to get Accident Cover, and not Illness Cover or Indoor Cat Cover. If you would like to ensure that your pet has full health cover in their senior years (over the age of 9 years), you should commence that policy before they reach their 9^th birthday and continue to renew your policy in accordance with the applicable terms and conditions.
• Pre-existing conditions are excluded from cover:
  • If your pet has had or currently has a condition that requires treatment and you decide to take out pet insurance, that condition will be excluded from cover.
  • In addition, if your pet develops or shows any symptoms or signs of a condition that required treatment prior to you taking out Pet Insurance or within the applicable waiting period of your policy, it is also classified as a pre-existing condition.  It is therefore important to understand the waiting period implications.
  • On the other hand, if you insure your pet from a young age, certain conditions may not be excluded as pre-existing conditions.
  • Note that Bow Wow Meow does have an option in our policies which allows you to apply for a pre-existing condition review to remove the pre-existing condition, provided your pet has had continuous cover for 18 months and no signs of that condition have appeared during the 18-month period.

Pet insurance vs. self-funding

We sometimes hear people say that it would make more sense to put a fixed amount away each month as part of a savings plan to pay for unexpected vet bills should they arise. This does seem like a viable way to avoid paying pet insurance premiums, so why not take on the risk oneself? Although well intentioned, this savings account option does not mitigate the risk the same way that pet insurance does. Let’s run through a few scenarios.

Let’s assume you decide you are disciplined enough to put away $60 per month in case something happens to your dog ‘Max’. After five months, your fund is worth $300. However, while taking Max out for a walk, he tears his cruciate ligament and the vet advises that the repair will cost $3,800. Now what?* (*This is an example only. Not all conditions and treatment will be covered. Refer to the Product Disclosure Statement for details of Bow Wow Meow Pet Insurance cover.)

Ok, I hear you say, the chances of this happening within the first five months are slim. But, from our claims statistics, we know that if your dog is a puppy, the risk of health issues and particularly accidents, is higher than that of more mature dogs. Puppies are curious and accidents happen frequently.

Let’s look at another scenario. Max has been perfectly happy and nothing has happened over the first three years of his life. You have saved $2,160 over this period plus a little in interest. You are outside chatting to the neighbour and Max is sniffing around outside. Suddenly there is a yelp and Max has sustained two bite wounds; one to the neck and one to his back leg. The vet’s bill totals $1,700 – you think that’s okay, you have over $2,000 in your fund so this is covered! However, the leg wound becomes infected and there is another $500 to pay the following month. Your fund is suddenly back down to zero.^ 

By this stage you may be feeling a little anxious as there is now little or nothing left in your fund. However, although there are interest charges to consider, you may still be able to borrow money to pay for an operation or a large vet bill if the need arises. The problem is that this still doesn’t mitigate the risk of anything else happening in the near future and it doesn’t exactly offer you peace of mind.

The difficulties of budgeting for chronic conditions

Chronic, or ongoing conditions, are very common for cats and dogs. The good news is that, with advances in vet care, there are many more treatment options available nowadays. However, many forms of treatment are very expensive and require regular ongoing medication.

If your pet develops a chronic condition, whether cancer, diabetes or even a skin condition requiring ongoing treatments, your pet insurance may cover the cost up to the annual limit (excluding sub-limits – see Product Disclosure Statement for details) every year for the life of the pet, provided we continue to offer the product, and you continue to renew your policy each year and subject to the terms and conditions.Please note, pre-existing conditions will not be covered.

When it comes to managing chronic conditions, there is no doubt that pet insurance is worth it.  However, if you use a self-funding option, there is simply no way to prepare your fund for an eventuality like this, and any chronic condition can end up being a significant expense over many years. If your pet is over nine years of age, the risk of falling ill also increases and budgeting for an older pet becomes extremely challenging.

In summary                                      

So, is pet insurance worth it? There have been several surveys conducted amongst pet owners asking how much they would spend to save their pet, if they were ill or injured. The majority answer that they would be willing to spend any amount needed. However, vets tell us that when some pet owners are faced with the treatment options at varying costs, they may choose the least expensive or most affordable treatment, with compromised outcomes. For example, in the case of a cruciate ligament issue, the owner may choose to not go ahead with surgery and select a cheaper form of treatment, leaving the dog with a limp. Clearly this is not ideal for either the pet or the owner.

For those pet owners who would be happy with an outcome such as this, or would be prepared to euthanise their pet if it got seriously ill, pet insurance might not be necessary. However, for most us, who love our pets as part of the family and want to give them the best treatment available always, pet insurance can provide peace of mind for relatively little cost. Many pet owners look back after an accident or illness has occurred and say that pet insurance would have been great to have. However, by this stage, it is too late to cover that bill.

Nowadays, pets are considered part of the family. Unfortunately, it is common for our furry family members to land up at an emergency clinic or speciality hospital at least once in their lifetime. Only ten to twenty years ago, many of the current veterinary procedures and treatments were not available and many pets were euthanised. With the pace of technology and the resultant advances in veterinary care that we see today, pet owners are now able to provide their pets with highly specialised, quality vet care.

However, the costs of delivering better healthcare to our pets are continuously increasing. The specialisation of veterinary care in the future will provide us with even more options and even better outcomes…. and greater costs. A good question to ask yourself is this, “Would you be willing to spend upwards of $4,000 to treat your furry family member?”. If you have answered yes, but at the same time, you are concerned about affordability, it is highly likely that pet insurance is a worthwhile and viable option for you.

Pet insurance provides the ability to budget for any unforeseen risks and bridges the gap between increasing vet costs and the provision of good healthcare… whilst creating peace of mind at the same time. Premiums can be adjusted depending on the policy, annual benefits, co-payments and per condition excess that you choose. Many pet owners are now saying yes to pet insurance, your pets are worth it!