Pet insurance saved us by a whisker

Stephen Womack, Mail on Sunday
ThisIsMoney.co.uk
11 August 2008

Busaba is only a small ferret, but when she fell ill earlier this year it resulted in a large veterinary bill for her owner, Antonella Marsicano.

	Saved: Antonella Marsicano found claiming for vets fees was easy when one of her ferrets, Busaba, fell ill.

After a course of drugs it was decided to operate to remove the tumour. Busaba is now fine, but the total cost of treatment topped £1,600.

Fortunately, Antonella, 31, an account manager with a furniture supplier, is one of a minority of pet owners with animal insurance. She pays £16 a month for Busaba and her other ferret, Nikita, through Petplan.

There are an estimated 19 million pets in Britain, including 6.8 million dogs and 9.7 million cats. However, only one in five has the safety net of insurance, though the market has been steadily growing.

Judith Roberts, pet insurance manager for M& S Money, says: 'For most buyers, their pet is a cherished member of the family. Owners want to know they will be able to afford treatment if anything goes wrong.'

Antonella of Vauxhall, south-west London, says: 'Ferrets are great fun. They sleep 15 to 18 hours a day and then are playful when you come home from work.

'When Busaba got ill, I found it straightforward to claim. The vet completed the forms and sorted things out on my behalf.' Supermarket insurers such as Tesco and Sainsbury's are bringing cover to a new audience to join established names such as Direct Line.

And over the past 18 months, the new providers have included HSBC, Petsecure and Greenbee, the financial services arm of John Lewis. But at the same time, some providers have departed, with Legal & General and Admiral among those quitting because they have struggled to build a significant market share.

According to Roberts, vet fees have been rising by about 12% a year. How much medical treatment each policy will cover and for how long the cover continues varies greatly between insurers

Brian Brown of insurance analyst Defaqto, says: 'Perhaps more than any other type of insurance, it is vital to do your homework when shopping for pet policies. You must understand exactly what it will and will not cover.'

And it is essential to make the right choice from the start. 'This is a form of medical cover and once an animal has had treatment for a particular illness or condition, you will rarely be able to switch to another provider says Brown.

The cost of insurance is influenced by many factors. Premiums rise with age as medical problems are more likely to develop. For example, the owner of a six-month-old red setter puppy in Portsmouth would pay £12.05 a month with Direct Line. But by the age of five, this rises to £13.77 and by ten it is £25.88.

Beyond a certain age, typically seven or eight, insurers may take on new animals only if owners are willing to pay a higher excess, perhaps 15% of claims cost.

Pedigree dogs are more expensive to insure than crossbreeds as some have genetic predispositions to certain conditions.

Location is also an important factor, with four out of five insurers loading costs according to where owners live. Vet fees are most expensive in London and the Home Counties and consequently so are premiums.

Direct Line, for example, charges £6.04 a month to insure a three-year-old cat whose owner lives in rural mid Wales, but that would be £8.53 a month for the same cat in central London.

Underwriting is becoming increasingly sophisticated, with some companies looking at whether a pet has been neutered and even the age and lifestyle of the owner.

Brown says: 'Insurers tell us that divorced men are less likely to make a claim than married women.' But will pet insurance be forgotten as rising bills and an economic slowdown squeeze household budgets?

According to research in June by consultancy Deloitte, only one-in-ten pet insurance customers said they would cut cover if finances became tight.

Abby Miller, 29, from Bassingbourn, Cambridgeshire, is a single mother bringing up three children - sons Beau, 6, and Luca, 23 months, and daughter Isobel, 4.

The family also has two cats - Gary, 3, and Dusty, 4. And last month Dusty gave birth to Matilda and Mr Brown.

Originally, both Gary and Dusty were insured, but after Abby split with her partner she has had to reassess her financial priorities. 'If I felt I could afford it, I would definitely buy pet insurance, but at the moment there are more important direct debits going out of the household budget,' says Abby.

Fortunately, a good friend is a vet and Abby knows there is help in an emergency.

'I look after the cats and make sure they are wormed. I keep my fingers crossed they will stay healthy,' she says.

	Cash strapped: Abby Miller can't afford cover for her cats

Vets are increasingly reluctant to take payment direct from insurers, with some charging for handling the paperwork while others have stopped dealing direct with insurers altogether. This means pet owners must settle the bill and then claim from their insurer.

The Rainsbrook Veterinary Group, for example, with surgeries in Leamington Spa and Rugby in Warwickshire, stopped dealing with insurers at the end of last month. Director Simon Daniel says: 'It is not a decision we took lightly, but we have seen an increasing level of debt across our business over the past year as we wait for insurers to pay claims. There are one or two cases where we are only now receiving payment for work done six months ago.

'Why should all the rest of our customers have to bear the costs of dealing with these payments?' Bradley Viner, a vet with the Blythwood Veterinary Group in north-west London and a spokesman for the British Veterinary Association, says: 'With the proliferation of insurers - all with different policies that cover slightly different things - there is an increasing administrative burden on vets, so you are seeing many different approaches taken to charges.'

How to decide which policy is best for you

Find the right you must how each operates. work in three ways:

Cover limited by year - the best type of where treatment one or more is paid up to annual limit. As long you pay the you can to claim for same ailment and annual limit is reset zero each year.

Cover limited per condition - for a specific is insured up to a sum, whether in one or over several After that, no claims are paid that condition.

Cover limited per condition with a 12-month limit - you can claim up to set sum for any one condition for up to 12 months after diagnosis.

Buyers must also assess the non-medical features of any policy such as payments if your pet dies, reward and advertising money if they go missing and help towards kennel or cattery fees if you are ill.

Some insurers adopt a menu approach where you pick and mix extras on top of basic cover.

Gail and Simon Scott selected M& S Money's Premier cover last year when they bought Amber, a Hungarian Vizsla. Gail, from Great Missenden, Buckinghamshire, says: 'We regularly go to France and plan to take Amber. We picked M& S because they give cover for emergency treatment abroad.'

But Gail, 45, a housewife, and Simon, 35, a chartered surveyor, have had to call on the insurance closer to home. Tenmonth-old Amber had to have an operation in March to remove a peanut that had become stuck up her nose.

Gail says: 'The vet originally thought Amber had an infection and treated her with antibiotics, but then arranged for further investigations with a special camera and discovered the blockage.'

More recently, Amber has been back to the vet after she became violently ill and stopped eating for more than a week. Investigative surgery found nothing in her stomach, but Amber needed to be fed by drip for several days while she recovered.

The insurance costs £23 a month and the Scotts have to pay the first £70 of any claim, but Amber's vet bill this year has hit £1,800, making insurance a sound investment.