Why should you consider pet insurance?

Illnesses and accidents can befall your pets just as they happen to their human counterparts - and they can be costly. One way to prevent yourself being lumped with a huge vet bill is to take out pet insurance.

There are great benefits of having this type of insurance, but beware of the pitfalls some animal owners encounter. Read on to learn about the advantages and also the risks to avoid.

Benefits of pet insurance

The pros of pet insurance are similar to the advantages of having health insurance for people. You will be prepared financially for the unexpected and there would be no need to front up your life savings to pay for treatment.

This means you can comfortably send your pet off for major surgery and not have to foot the bill for an extended stay in hospital. It may even open some doors for treatment options that are too expensive to fund out of your own pocket.

Often problems with pets can be unpredictable and expensive to remedy. Vet bills can skyrocket and some families cannot bear the cost of fixing their pets. Pet insurance means some owners will not have to make a tough decision based solely on the financial side of things.

Paying a smaller amount regularly is often more manageable for some households as this static weekly or monthly amount can be easier to include in the budget.

Pet insurance will also give you peace of mind if you go on holiday because there is no need to stress about anything going wrong.

What treatments are covered?

While the level of cover you receive will depend on the specific policy you have taken out, most pet insurance will cover you if your furry friend  is injured or is involved in an accident.

The average cost of emergency care for pooches and moggies hit by a car is somewhere between $500 - $5,000, but could be more. Multiple fractures could cost as much as $13,525 according to Medibank.

What else is covered?

Again this depends on the level of cover under the policy, so it is best to check the wording of your agreement but the following conditions may also be included.

- Third party liability. This means if your pet injures someone or damages someone else's property, you may not have to cough up damages. This probably is geared towards dog owners rather than those with friendly cats, so if consider if it's something you really need.

- Boarding fees. If you cannot look after your pet yourself because of illness or any other complication, some policies will cover the cost of care.

- Replacement cost. This means if your pet is lost, stolen or dies due to an unexpected illness or accident before a certain age, you may be able to recoup the amount you paid for them.

What is not covered?

As with the human equivalent, pet insurance generally won't cover pre-existing medical conditions or anything to do with pregnancy or birth.

They also will not usually cover any routine treatments such as vaccinations or spaying, worm or flea treatments.

Some policies also have a medical exclusion, or 'waiting' period and will not cover you during the first 10 - 30 days.

Risks and pitfalls to be aware of

If you are a dog owner, be aware the breed of your dog may impact your premiums. Some breeds are more susceptible to certain conditions and this risk may well be built into your cover.

For example, labradors are more likely than many other breeds to suffer from hip and joint problems, which can be costly. Insurers may factor this risk in so they are not overpaying on claims.

Insurers will also take the pet's age into consideration and some won't renew a policy if the pet is above a certain age - roughly 8 or 9 years.

Check the limits, excess and exclusions

Some policies may offer an annual maximum payout while the maximum on others may be a set amount per condition. Make sure you are familiar with the terms of your policy so you aren't hit with any unexpected costs.

This also includes checking what your excess is. The whole amount for a treatment or procedure isn't usually covered, so read your policy carefully to see what you're liable for.

Certain conditions such as tick paralysis can be excluded. If you live in a tick prone area, for example, make sure you read the fine print before signing.

Be wary of taking out a 12 month policy rather than coverage for life, as it may be difficult to get cover after that period is up. While any serious medical conditions will most likely be seen during the first year, accidents can happen at any time.

Posted by Tim Wolfenden.