As we grow our families or get older, many of us turn to insurance to shoulder rising healthcare costs. It’s for the same reason that we find insurance for our pets – after all, they too are part of the family.

So, how should you go about getting cover for that pet? Everyone is price-conscious, so let us explain why each pet insurance policy is priced differently from one another.

What affects pet insurance premiums

Health insurance for humans is ‘community rated’, in that you cannot be charged more for insurance based on your health or history of claiming. So, if you’re older, or have a history of health conditions, you won’t pay more for health insurance than someone else. For us humans, it’s a fair system.

For pets, it’s different. Species and breeds have widely varying healthcare needs. It simply wouldn’t be fair to charge the same when some pets cost so little to care for, and others so much. It is because of this that your pet insurance premium is based on a number of factors. In fact, the very things that give your pet a little personality are what influence premiums most:

  • Age
  • Breed
  • Where you live
  • Desexed / spayed status
  • Gender
  • Type of animal

Your premium is also impacted by your choice of insurer, as well as the type of policy selected. The different types of pet insurance are:

  • Accident cover: If you’re only worried about surprise costs in the event of a serious incident of physical harm, this is the type of insurance that will suit you. It is typically the cheapest kind of pet insurance and has no age restrictions barring your pet from cover.
  • Accident & illness cover: This policy will cover costs in the event your pet is injured or falls ill. It’s more expensive than accident only
  • Comprehensive cover: Comprehensive pet insurance covers injuries, illnesses, and a list of extra benefits that vary from policy to policy. It’s the most expensive type of policy you can hold but is the only one that can include routine care as an added benefit.

Other factors that may influence the price of insurance are your co-payments or excesses. An excess is a one-off payment owed in the event you claim, and a co-payment is a daily cost you’ll have to pay for each day your pet is under care. If you elect for these costs to be more expensive, your monthly premium might work out to be cheaper.

Your premium is calculated when your policy begins and when it’s renewed each year.

Be mindful of out of pocket costs

The only other cost you’ll need to concern yourself with is any out of pocket expenses you may owe. While they don’t affect premiums, they’re significant enough that we do need to mention them here.

Out of pocket costs are owed when the cost of your pet’s healthcare treatment is only partially covered by your insurance policy. Your insurance may cover 80%, which means you’ll need to pay the 20%.

The importance of shopping around

MoneySmart states that insurance costs $20 per month for accident only cover, between $35 and $55 for accident & illness cover, and more than $60 for comprehensive cover^. As we’ve outlined above, however, you can track down a policy that costs less than this but still delivers the value you need. We are ready and willing to help you find such a policy.

Make sure you “shop smart” by learning more information about pet insurance.

^ Monthly averages sourced from ASIC (2016, December 13th). Pet insurance. moneysmart.gov.au/insurance/pet-insurance