Cheap pet insurance in Australia: Pros, cons and what to watch for

Summary

Is cheap pet insurance worth it?

We all know that looking after a pet is by no means ‘cheap’. When you add up everything you require for your dog or cat, it can end up costing a small fortune, and that’s before you even look at the cost of healthcare. So, when you start looking at ways to fund the cost of healthcare for your pets, it may seem logical to consider choosing cheap pet insurance for dogs or cats.

But before you go down this route, the question to ask yourself is, what exactly makes up a pet insurance policy and what will you be compromising on if you go for the cheapest pet insurance or a budget pet insurance policy?

Quick answer: is cheap pet insurance worth it?

• Sometimes, but only if you understand exactly what is and is not covered
• Cheap pet insurance may suit you if you mainly want limited protection and accept lower rebates or more exclusions
• It may be poor value if it only covers accidents, has very low limits, or leaves you heavily out of pocket for common illnesses
• The better question is often not “What is the cheapest policy?” but “What is the best-value cover I can afford?”
• A more affordable comprehensive policy may offer better protection than the cheapest option on the market

What makes a pet insurance policy cheap?

A pet insurance policy is usually cheaper because one or more parts of the cover have been reduced. This may include lower annual benefit limits, more exclusions, accident-only cover, a lower benefit percentage, higher annual excesses, or sub-limits that cap what you can claim for certain conditions.

That is why a lower premium does not always mean better value. The real question is how much help the policy is likely to provide when your pet actually needs treatment.

Affordable pet insurance Australia vs cheap pet insurance Australia

Cheap pet insurance and affordable pet insurance are not necessarily the same thing. Cheap policies are often cheaper because they strip back the level of cover. Affordable pet insurance, by contrast, may still include accident and illness cover but allow you to lower premiums by choosing a higher annual excess or a lower benefit rate.

For many pet owners, this is the more useful comparison. The goal is not simply to pay the lowest premium, but to find cover that is affordable while still being worthwhile when you need to claim.

For most of us, the most important consideration is to try to balance how much we can afford with the level of cover we are getting. Although pet insurance premiums have increased over time, rest assured that it is still possible to find affordable pet insurance that fits within your budget while giving your pet the level of cover it needs.

Cheap pet insurance

Cheap pet insurance policies are usually cheap for a reason – they typically have a low level of cover, low annual limits, large excesses, per-condition excesses, and many exclusions.

Affordable pet insurance

Affordable pet insurance policies typically provide cover for both accident and illness conditions; however, what makes them more affordable is that you are able to choose a higher annual excess and/or a lower benefit percentage (or benefit rate), to help reduce the cost of the policy (the benefit percentage/rate is the stated percentage of each claim for eligible vet expenses for which your pet insurer will reimburse you).

By choosing a higher annual excess and/or a lower benefit percentage, you are helping keep the policy more affordable by electing to cover more of the bill yourself, while still enjoying a substantial rebate (for example, if you took 70% cover, you would need to cover 30% of the bill).

At the end of the day, it is recommended that you choose good quality pet insurance cover, even if you decide to lower your benefit percentage or increase your annual excess. This way you can be assured that eligible accidental injuries and illnesses will be covered up to your annual benefit limit.

The limitations of cheap pet insurance cover

When evaluating pet insurance costs, be aware that cover offered with cheap pet insurance policies can be extremely limited. So what are the limitations that you should be aware of?

1. Low benefit limits &/or multiple sub-limits

Some pet insurance policies are simply attached to a general home and contents policy. These may seem to be very cost effective; however, you need to be aware that you can typically only claim a limited amount (usually around a maximum of $750-$1,000 per claim which may be only applicable after you’ve paid your per-condition excess).

This type of policy may serve you well for less expensive conditions, however, you will find yourself out of pocket for the larger, more expensive treatments, which can range upwards from a couple of thousand to tens of thousands of dollars.

2. Policy exclusions

There are other cheap pet insurance policies out there that reduce the cost of cover by only covering certain accidental injuries and excluding all illness related conditions. When you consider that the most commonly claimed vet bills are illness related, it makes you wonder if this type of cheap pet insurance is really worthwhile.

Top 5 most commonly claimed conditions for dogs and cats of all ages in 2024:

Source: Pet Health Monitor 2025

As you can see from the table above, the majority of the most commonly claimed conditions in both dogs and cats are illness related (all except fight or bite injuries). So if you are after a policy that will truly cover your pet, it is definitely worth choosing a comprehensive policy that includes illness cover.

3. Large excesses and per-condition excesses

The excess is the amount that you (the pet owner) pays towards a claim before your pet insurance kicks in. You will find that many cheap pet insurance policies have a high excess attached.

If this excess is applied on a per-condition basis per policy period, you will have to pay the excess amount (which can range from $100 up to as high as $500) each time your pet is treated by the vet for each new health condition every year.

How to save on your premiums

Take out pet insurance early on

Signing up for a policy when your pet is young may allow you to extract more value from your policy. If you wait to get pet insurance, any conditions that do occur prior to taking out a policy become a pre-existing condition and will not be covered. This is why the best time to get insurance is when your pet is under a year old.

Note that the “earlier is better” rule still applies if you adopt an older animal. In many cases when you adopt a pet, there is often little or no history. If you provide a certificate of adoption when you sign up for pet insurance, any history before the date will generally be ignored and vet history will usually only be required from the adoption date onwards.

Choose a lower benefit rate

The benefit percentage or rate is one way to help make pet insurance more affordable. As explained above, the lower the benefit rate you select, the lower the premium, as you share more of the risk by covering a larger portion of your pet’s healthcare costs yourself.

Choose the right annual excess for your needs

An annual excess is another way that pet owners may use to help reduce the costs of pet insurance. Typically, the higher the excess, the lower the premium payable. However, you should be aware that with a high annual excess, your first claim of the year will be subject to the excess amount.

For example, if you have a policy with a benefit rate of 80% and an annual excess of $500, and your first claim is for $700, you will receive 80% of the $700 charge, which is $560, less the $500 excess… which leaves you with only a $60 rebate. Any subsequent claims within the same year will be reimbursed according to your benefit percentage, with no further deductions for the annual excess.

Rebate calculations for the above example: 

As this example clearly demonstrates, when evaluating pet insurance costs, it is worth considering not just the cost of the pet insurance premiums but the amount you will receive back when you need to claim on your policy – and be aware of both the pros and cons of high excesses.

Pay annually

Most insurance providers charge a fee to process premium payments. It typically costs around a dollar to process each premium payment, which can add up if you elect to pay fortnightly. So if you can afford to pay your annual premium upfront, this can be an added source of savings on your premium costs.

Discounts

There are ways to help make your pet insurance policy more affordable, including sign-up discounts. At Bow Wow Meow Pet Insurance, we offer discounts to new customers. See our current offers here.

Additionally, our policyholders with more than one pet get a 10% discount that applies to their second and subsequent Bow Wow Meow Pet Insurance policies¹.

Because it is difficult to predict the costs of veterinary care, it can help to have measures in place to help prepare for the unexpected. Pet insurance can help by covering a portion of the eligible vet bill if the unexpected does happen.

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When might cheap pet insurance still make sense?

Cheap pet insurance may make sense if you are mainly looking for limited protection against smaller unexpected costs, understand the exclusions clearly, and are comfortable paying more yourself if a major illness or surgery occurs.

It may be less suitable if you would struggle to pay a large vet bill, want cover for common illnesses as well as accidents, or expect the policy to make a major difference when treatment becomes expensive.

In many cases, the better approach is to choose the most affordable comprehensive cover you can reasonably maintain, rather than the absolute cheapest policy available.

What to compare before buying cheap pet insurance

• annual benefit limit
• benefit percentage or reimbursement rate
• annual excess and whether excess applies per condition
• whether illness is covered as well as accidents
• sub-limits for specific treatments or conditions
• pre-existing condition rules
• waiting periods
• how much of a typical claim you may still need to pay yourself

In conclusion

Cheap pet insurance can be tempting when you are trying to keep monthly costs down, but the lowest premium is not always the best value in the long run. A cheaper policy may still be helpful in some situations, especially if you understand the trade-offs and are comfortable covering more of the bill yourself. However, lower-cost cover often comes with lower annual limits, more exclusions, higher excesses, or reduced cover for the illnesses and injuries that can lead to the biggest vet bills.

For many pet owners, the more useful goal is not simply to find the cheapest policy available, but to find cover that is affordable and still offers meaningful protection when it matters most. Taking a little extra time to compare annual limits, reimbursement rates, excess, accident and illness cover, and exclusions can make a real difference if you ever need to claim.

If you are weighing up your options, it may help to think about what level of cover would genuinely support you if your pet needed unexpected treatment — not just what looks cheapest at first glance.