Australians have a deep love for their pets, with an estimated 28.7 million pets across the country, contributing to one of the highest pet ownership rates globally1. However, caring for pets involves more than just affection—it requires financial planning for food, routine treatments, and sometimes unexpected medical expenses. 

Major surgeries and treatments can cost thousands of dollars, and without a Medicare equivalent for pets, these costs must be covered out of pocket2. Since it’s impossible to predict when a pet might become sick or injured, pet insurance is an option that some pet parents consider to help manage unexpected vet bills. 

Firstly, what is pet insurance? 

Pet insurance can help manage healthcare costs if your pet experiences an unexpected illness or accidental injury. Policies cover a percentage of eligible vet bills, with varying annual claim limits, and some of them having sub-limits for specific treatments or conditions. With a variety of pet insurance products available, it’s important to review the options based on your specific needs to make an informed decision. 

The importance of pet insurance for pet parents 

As pet health treatment costs continue to rise, pet insurance has become increasingly important. According to PetSure’s 2024 Pet Health Monitor, the average cost of a single veterinary visit in Australia can range from $300 to $1,500, depending on the issue or the complexity of the case. For example, an ear infection may cost over $300 with the ingestion of a foreign body or toxin reaching over $1500. In emergencies, these costs can climb even higher, placing unexpected financial burdens on pet owners. 

Insurance can help mitigate these expenses while ensuring pets receive the care they need. When managing veterinary costs, pet parents have different options to consider, these may include pet insurance or a dedicated savings account. Pet insurance can help cover unexpected medical expenses, while a savings account allows you to set aside money over time for your pet’s needs. The best choice depends on individual circumstances, including your financial situation and your pet’s health. 

Average Treatment Costs for Pets 

Understanding the average treatment costs for pets is essential for assessing the value of pet insurance. Common treatments and their associated costs include: 

  • Routine Check-ups and Vaccinations: Regular check-ups and vaccinations are vital for preventative care. These visits can cost between $100 and $250. Remember, pet insurance is designed for unexpected veterinary expenses, your day-to-day pet care expenses like tick, flea and worm treatments, vaccinations and grooming typically won’t be covered unless you have a routine care/wellness benefit (a non-insurance benefit) which provides a contribution towards certain items plus an annual capped limit. 
     
  • Dental Care: Dental procedures, including cleanings and extractions, can range from $500 to over $3,000. 
     
  • Injury or Illness: Treatment for injuries such as fractures or illnesses like infections can cost between $1,000 and $3,000 plus. 
     
  • Chronic Conditions: Managing chronic conditions like diabetes or arthritis often requires ongoing treatment, costing $1,000 to $5,000 annually. 
     
  • Emergency Surgery: Emergency procedures for critical conditions, such as intestinal blockages or severe injuries, can cost upwards of $5,000. 
What Does Pet Insurance Cover? 

Pet insurance policies vary, but they generally cover a range of treatments and procedures, including: 

  • Accidental Injuries: Coverage for injuries resulting from accidents, such as fractures or lacerations. 
     
  • Illnesses: Treatment for illnesses, including infections, digestive issues, and respiratory conditions. 
     
  • Surgery: Costs associated with eligible surgeries, such as tumour removal or orthopaedic procedures. 
     
  • Diagnostic Tests: Coverage for diagnostic tests for eligible conditions, including blood tests, X-rays, and ultrasounds. 
     
  • Hospitalisation: Expenses related to eligible hospital stays and intensive care
What Does Pet Insurance Not Cover? 

While pet insurance covers a wide range of treatments, certain exclusions apply. Common exclusions include (but not limited to): 

  • Pre-existing Conditions: Conditions that existed before the policy’s start date are typically not covered. 
     
  • Routine and Preventative Care: Regular check-ups, dental care, vaccinations, flea control, and grooming are usually excluded unless specified in an add-on package. 
     
  • Elective Procedures: Procedures that are not medically necessary are generally not covered. 
     
  • Breeding-Related Costs: Expenses associated with breeding, pregnancy, and birth are often excluded. 

Understanding these exclusions is important for pet owners to ensure they choose a policy that aligns with their pet’s needs and their expectations. 

Premiums and How They’re Calculated 

Your premium is determined by a combination of fixed and variable factors, such as the type of coverage you choose and your pet’s breed and age, which influence risk assessment. Premiums are likely to increase annually due to various factors, including your pet’s aging, past claim history, and advancements in veterinary care that drive up treatment costs. 

Annual Limits

Pet insurance policies typically have an annual maximum claim limit, and some of them also have sub-limits for specific treatments/conditions. 

Sub-Limits 

Sub-limits are the maximum amounts an insurer will pay for certain types of claims. For example, a policy with a $10,000 overall annual limit may have a $1,500 sub-limit for tick paralysis, meaning the policy will cover up to $1,500 for that specific treatment. 

Benefit Percentage 

Policies reimburse varying percentages of eligible vet bills, with the remaining cost paid out-of-pocket by the policyholder. 

Some insurers offer GapOnly®, an innovative payment service, where customers only pay the ‘gap’ (the difference between the benefit amount and the vet’s invoice at participating vets), which typically takes around five minutes to process. You can find participating vets here*. If you do not use GapOnly®, generally you will need to pay the vet’s bill in-full and up-front and then claim the costs back from your pet insurer. 

Excess 

The ‘excess’ is the amount you agree to pay out-of-pocket when making a claim. It often applies per condition and per policy period, though this can vary across different policies and insurers. A higher excess generally results in lower premiums but increases out-of-pocket costs at the time of a claim. 

Waiting Period and Claim Limits 

Pet insurance policies often include a waiting period, which is the time between policy inception and when coverage begins. Waiting periods can range from a few days for accidents to several weeks for illnesses. Additionally, claim limits specify the maximum amount the insurer will pay per incident or year. Some policies offer unlimited annual coverage, while others set limits. Understanding these terms helps pet owners evaluate the financial protection provided by a policy. 

Other considerations

Research conducted by PetSure found that a pet of ‘average health’ could incur healthcare costs exceeding $30,000 over its lifetime.

The right cover for your pet’s breed and age 

Research your pet’s breed profile so you understand common breed-specific conditions that your pet may experience and ensure adequate insurance coverage. Older pets may need more care but face higher insurance costs and potential exclusions. Securing insurance earlier may reduce the risk of pre-existing condition exclusions. 

Waiting periods 

Waiting periods vary across policies. Commonly for pet insurance: 0-2 days for accidental injury, 14-30 days for illnesses, and 90 days-6 months for cruciate ligament conditions, starting from the policy purchase date. 

So, is Pet Insurance Worth It? 

Insurance companies aim to collect more in premiums than they pay out in claims, but that doesn’t mean the odds are always against you. The purpose of insurance is to provide financial protection against large, unexpected expenses. If you face a significant vet bill, the amount you’ve paid in premiums could be far less than what you receive in reimbursement. 

You may have an idea of what you’d be willing to pay for in an emergency now, but it’s important to consider the potential difficulty of not being able to afford treatment when your pet needs it most. 


Sources

Animal Medicines Australia, 2022. Pets in Australia: A national survey of pets and people. [online] Available at: https://animalmedicinesaustralia.org.au/report/pets-in-australia-a-national-survey-of-pets-and-people-2/

PetSure, 2024. Understanding the rise in pet health costs. [online] Available at: https://petsure.com.au/knowledge-hub/understanding-the-rise-in-pet-health-costs/

PetSure, 2024. Pet Insurance Product Features Explained. [online] Available at: https://petsure.com.au/knowledge-hub/pet-insurance-product-features-explained/  

PetSure Australia, 2024. What is pet insurance? [digital brochure] 

PetSure, 2024. Understanding the rise in pet health costs. [online] Available at: https://petsure.com.au/knowledge-hub/understanding-the-rise-in-pet-health-costs/

PetSure, 2024. Financial Preparedness for Pet Parenthood. [online] Available at: https://petsure.com.au/knowledge-hub/financial-preparedness-pet-parenthood/

PetSure, 2024. Tips to Manage Pet Healthcare Costs Amid Inflation. [online] Available at: https://petsure.com.au/knowledge-hub/tips-to-manage-pet-healthcare-costs-amid-inflation/

PetSure, 2024. Why Veterinary Costs in Australia are Rising. [online] Available at: https://petsure.com.au/knowledge-hub/why-veterinary-costs-in-australia-are-rising

PetSure, 2024. Pet Healthcare: Different Payment Options. [online] Available at: https://petsure.com.au/knowledge-hub/pet-healthcare-different-payment-options/

Forbes, 2023. Is Pet Insurance Worth It? [online] Available at: https://www.forbes.com/advisor/au/pet-insurance/is-pet-insurance-worth-it/  

SafeWise, 2023. Is Pet Insurance Worth It? [online] Available at: https://www.safewise.com/au/is-pet-insurance-worth-it/  

Insurance products are issued by The Hollard Insurance Company Pty Ltd ABN 78 090 584 473, AFSL 241436 (Hollard) and/or PetSure (Australia) Pty Ltd ABN 95 075 949 923, AFSL 420183 (PetSure) (from 8th May 2023 only), administered by PetSure and promoted and distributed through their authorised representatives and distribution partners. Any advice provided is general only and does not take into account your individual objectives, financial situation or needs. Cover is subject to the policy terms and conditions. You should consider the relevant Product Disclosure Statement (PDS) to decide if a product is right for you. PDS and Target Market Determination are available from the relevant partner’s website.              

Testimonials and customer experience may vary depending on individual circumstances. Claims are assessed subject to policy terms and conditions.  

Any advice provided is general only and does not take into account your individual objectives, financial situation or needs. Cover is subject to the policy terms and conditions. Please consider the Product Disclosure Statement (PDS) to ensure this product meets your needs before purchasing or choosing to continue with the product. PDS and Target Market Determination available on our partners’ websites. Meet our partners at petsure.com.au/partners.         

Pet insurance can help by covering a portion of the eligible vet bill if the unexpected happens. 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. Check out our partner network and explore our policy tools to find a pet insurance policy.

Not all conditions or items are covered by Pet Insurance. Refer to the applicable Product Disclosure Statement for information about coverage and exclusions.