Your guide to understanding pet insurance

Are you among the two-thirds (62%) of Australians who own a pet?

Pets are part of the family, so chances are you want to do everything possible to protect your furry little friend. That’s why many pet owners choose to explore their pet insurance options, offering a financial safety net in case their pet needs an unexpected visit to the vet.

This has never been more important, with nearly 2 in 5 Aussies (36%) very concerned about coping with the rising cost of living, according to the latest Real Aussie Financial Bite Report 2023. With less expendable income, more Australians are looking for ways to cover emergency vet bills, last-minute kennel boarding, and even pet medications. 

In this guide to pet insurance, discover the benefits of securing insurance for pets, what is and isn’t covered, as well as answers to commonly asked questions, like ‘is pet insurance worth it?’.

What is pet insurance?

Pet insurance is designed to alleviate some of the costs of owning a pet. By taking out pet insurance, you may reduce the financial impact of vet bills, certain accidents and illnesses. 

Most insurers will offer multiple levels of coverage, each with unique features, benefits, exclusions and premiums. 

For example, at Real Insurance, we offer three types of pet insurance cover, including:

• Premium Accident & Illness Cover, which covers up to 80% of eligible vet bills
• Standard Accident & Illness Cover, which covers up to 75% of eligible vet bills
• Classic Accident & Illness Cover, which covers up to 60% of eligible vet bills

While pet insurance won’t cover all expenses and specific T&Cs will apply, it may reduce the financial impact of eligible vet visits, accidents and illnesses if your pet gets sick unexpectedly. 

Why should you consider pet insurance?

It depends on your individual circumstances. Some pet parents underestimate the costs of owning a pet. In the first year of owning a cat or dog, MoneySmart estimates you’ll spend between $3,000 and $6,000 (followed by roughly $3,200+ annually for dogs and $1,700+ annually for cats).  

But that doesn’t take into account the expenses associated with accidents, illnesses, or injuries your pets might encounter. These costs can quickly add up, particularly if you need to visit an emergency or after-hours vet and put your pet into surgery. 

There can be benefits to pet insurance, including:

• Lower eligible vet visit costs: A standard vet consult for a single concern can cost upwards of $130+, and even more if you need to visit after hours or on a public holiday. With pet insurance, you’ll know that a percentage of the costs of eligible vet visits will be covered.
• Access a financial safety net: A whopping 77% of Australian households have reduced their discretionary spending to cope with the soaring cost of living. Pet insurance can help to further reduce these financial pressures, particularly in the event of a major accident or sudden illness involving your beloved pet.
• Peace of mind in case of the unexpected: It’s hard to put a price tag on peace of mind. If things do go wrong, pet insurance may be able to support you with at least a portion of the costs, allowing your family to focus on supporting your pet's health, wellbeing and recovery. 

What does pet insurance cover?

Pet insurance typically covers a portion of the costs of accidents and illnesses your pet might encounter. If you choose to add on a routine care package, your pet insurance policy can also cover a portion of preventative care costs (such as teeth cleaning and vaccinations). 

Usually, insurers will specify what percentage or dollar amount your policy covers. Plus, they’ll clarify what kinds of accidental injuries and illnesses are included and if they cover unexpected veterinary expenses.

For example, with Real Insurance:

• Specified accidental injury: All packages offer a 0-day waiting period, helping you cover the costs of eligible vet expenses and treating injuries resulting from car accidents, burns, and snake bites.
• Illnesses: Across all of our pet insurance plans, we cover a percentage of eligible vet bills to treat a range of common illnesses (excluding some pre-existing conditions) after 30 days.
• Extra benefits: We give Australian pet owners a range of extras at no extra cost, such as emergency boarding if you’re in hospital, tick paralysis treatment (in some cases), and even essential euthanasia.
• Optional routine care: If pet parents opt in, they can add on Routine Care Benefit, reducing the costs of care by up to $80 per year (which can be used across anything from de-sexing to heartworm preventative medication and even flea tick or worm control). 

What's not covered by pet insurance?

Insurance policies often come with exclusions, and pet insurance is no exception.

While each insurer and insurance policy will have its own list of exclusions, these items are generally not covered by pet insurance:

Pre-existing conditions and any conditions your pet develops during the waiting period (more on this in a minute!)

• Dental problems or oral disease
• Behavioural disorders or conditions caused by behavioural problems 
• Elective procedures (including routine de-sexing, in most cases)
• Grooming or bathing your pet 
• Pet food and dietary supplements 

Real Insurance Tip: Make sure to download the Product Disclosure Statement (PDF) for your specific pet insurance policy to confirm what is and isn’t covered by your policy and any caps, limits or exclusions that might apply. 

Important factors to consider before getting pet insurance

When comparing pet insurance policies, it’s important to consider what features, benefits, and inclusions are important to you. Use this handy checklist to easily compare pet insurance policies from various pet insurance providers.

Premiums

• How much will you need to pay for cover?
• What is your preferred premium payment frequency (fortnightly, monthly or yearly)? Are there additional costs to adjust this?
• Are you happy to pay a higher premium for a higher level of coverage? 

Percentage of vet bills covered

• What portion (%) of your vet bills will be covered?

Excess

• Does this insurer charge an excess? If so, how much?
• Are you willing to pay lower premiums in return for a higher excess?

Waiting period

• Do you need to hold your pet insurance policy for a certain period of time before you can make a claim? If so, how long is the waiting period?

Annual benefit limit

• Is there a certain limit on how much you can claim on your policy each year?

Annual condition limit

• Is there a limit on how much you can claim each year for specific conditions? 

Optional extras

• What extras are included in your policy free of charge?
• What extras can you add onto your policy at an additional charge? 

Common pet insurance questions: answered

What are pre-existing conditions and how do these impact your pet's policy?

Pre-existing conditions are conditions, injuries and illnesses your pet already has before the start of your pet insurance policy. It’s important to keep this in mind, as most insurers exclude any costs associated with pre-existing conditions—meaning you won’t be able to make a claim on vet bills and your pet's treatment for these conditions. 

That’s why many pet parents opt to take out pet insurance early in their pet’s life before any conditions or illnesses come up. Plus, keep in mind that any conditions that develop during a pet’s life won’t be covered by a new insurer if you choose to change your pet insurance provider. By picking the right pet insurance provider from day one, you can avoid getting caught out by pre-existing condition exclusions. 

Extra tip: Make sure to check how your insurer and your specific insurance policy define a pre-existing condition so you’re aware of what exclusions apply. 

What is the waiting period for pet insurance?

Most pet insurance policies will include a waiting period, sometimes referred to as a ‘no-claim period’. This waiting period is in place immediately after you purchase a pet insurance policy.

Depending on your insurer, specific waiting periods will apply for specific types of claims (such as accidental injury, illness, tick paralysis and even cruciate ligament conditions). 

Plus, any conditions that your pet develops during this waiting period will generally be considered pre-existing conditions moving forward. 

How much does pet insurance cost?

The out-of-pocket costs associated with pet insurance change depending on a range of factors. For example, opting for a higher excess can lower your pet insurance premiums, while choosing more comprehensive cover can increase your premiums. 

Ultimately, the best way to assess how much pet insurance is likely to cost is to contact an insurer for a bespoke quote. They’ll be able to assess your personal circumstances and your preferences for pet cover and provide an accurate estimated cost. 

Protect your pet

Pet insurance is a practical way to secure a financial safety net and may help reduce the impact of a hefty vet bill. With peace of mind in the event of an accident or unexpected illness, pet insurance may allow you to focus on what matters: helping your furry friend recover and get back to health.

See if Real Pet Insurance could suit you and your pet’s needs. Get a quote online now.