What is pet insurance and do I need it?

Insurance is often designed to help us cover the things that are our nearest and dearest, and you don't get much more close to our hearts than with our pets.

When it comes to pet insurance, never has the saying "you get what you pay for" been truer. There's several key differences between levels of pet insurance and it's important you know the differences so you can choose the cover that best meets your needs.

Vets are expensive and the costs are rising. Not only are vets themselves highly trained professionals that we want to give our pets the best care possible, but they're using newer more advanced drugs and diagnostic equipment which don't come cheap. It's not uncommon for x-rays to cost a couple of hundred pounds, or a hip replacement to cost three or four thousand pounds or more. Vet fee cover on insurance should cover illness as a minimum, with options to also cover injuries.

Short term cover typically applies a time limit on your claim - usually of 12 or 18 months from the date of first treatment - and is per condition. It tends to be coupled with a maximum amount payable per condition too.

Long term cover - also known as ongoing cover - generally won't apply any time limits for the treatment of a condition, but would normally have a maximum amount payable.

With lifetime cover, the general rule is if you keep paying, your insurance will keep paying. Typically these policies will reset the vet fee limit every year. As you might expect, these policies tend to be more expensive to buy but could save you lots in the long term.

Don't assume you don't need pet insurance until your pet gets older as that could be a costly mistake. Not only do a lot of policies have a maximum age for covering a new pet, most policies will also exclude any cover for pre-existing conditions, though some insurers now offer quotes for pre-existing conditions. The key here is to get your cover in place early, before your pet suffers any unfortunate mishaps or develops any medical conditions. When you're getting your quotes and comparing cover, don't think of it like you would a car or home insurance quote where you'll expect to move your cover every year or two, if your pet develops a condition and you claim for it, you're probably going to be sticking with the same insurer for the life of your pet.

Vet fees are just one component of a pet policy. Many insurers will either include additional covers as standard or give you options to pick and choose what you need. Look out for things like third party liability cover for dogs (in case your dog causes injury or damage to someone else or their property), dental cover in the event of an accident or injury, and complimentary therapies like hydrotherapy to help recover after an injury or maintain mobility.

As with all insurance, the risk you present to the insurer will influence the premium you're quoted, and that's no different with pet insurance. Your pet's breed and it's age will be two of the main contributing factors to the price you're quoted. You should expect the premium to increase as your pet gets older, as statistically you're more likely to claim for medical conditions as a pet advances in years. Some insurers will offer multi-pet discounts if you have more than one pet in the household, so keep an eye out for those but don't be put off insuring different pets with different insurers.

Insurers may offer excesses and co-insurance (also known as co-payment) as a way for you to help reduce your premium. Excesses tend to be paid once per claim, and is a fixed amount, with higher excesses attracting bigger premium discounts. Co-insurance is where you also agree to pay a percentage of each claim, typically 10 to 20%. Co-insurance isn't always optional, some insurers may impose it on all policies, or for pets above a certain age.

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