Is pet insurance worth the money?

Last updated on February 20th, 2025

Australians spend more than $33 billion a year looking after their furry friends and pet owners know that trips to the vet can chew through a large chunk of cash. So is pet insurance worth the money upfront to ward off potential financial pain in the future?

According to Animal Medicines Australia’s Pets in Australia Survey, dog owners spend about $3200 a year on their animals, while cat owners spend about $1700 per feline.

Vet bills represent 14 percent of overall expenditure – a distant second behind food at 51 percent – with Australians spending about $4.7 billion looking after their animals’ health.

 

 

The number of owners taking out pet insurance, however, has fallen dramatically since 2019, with just 17 percent of dog owners (down from 30 percent) and 12 percent of cat owners (down from 21 percent) paying to insure their pets.

The cost is the main reason for not taking out a policy. Whether pet insurance is worth the money depends on a lot of factors, including how far premiums will stretch your budget and what impact an emergency vet bill would have on the same.

The pros of getting pet insurance

It offers peace of mind. If something goes wrong with your furry friend - and you have the appropriate cover - you'll be able to take care of them without the worry of an enormous financial burden. Unlike with health insurance for humans, there is no Medicare to fall back on for pets. If they need emergency surgery or other expensive treatment for illness, you will have to foot the entire bill if you haven’t insured them.

 

 

Competition has improved the sector. Not so long ago there were only two pet insurers, which meant premiums were higher and options were limited. The more insurers, the more coverage options for pet insurance, which increases your chances of a good deal.

The claim process is generally easy. A lot of the paperwork has been eliminated. It’s easy to lodge claims online, most pet insurers will get back to you within 24 hours or less with an update on your claim and refunds are generally in your bank account within the week.

It can be adapted to suit your needs. The first year of your puppy or kitten's life is a big deal but also comes with many big expenses. From routine care to desexing and microchipping, these costs can add up quickly if you don't have the right insurance policy. With customisable policies, you can cancel add-ons your pet no longer needs as they grow.

The cons of pet insurance

It can be expensive. According to Choice, annual vet expenses for dogs and cats can cost as much as $400, before you factor in medications and more expensive items such as surgery. But with premiums running anywhere from $180 to $4500 annually, it might be cheaper to take the risk and pay for the surgery if you need it.

 

 

Your cover and premium can change without warning. Pet insurance is an industry that is still not well regulated. Pet insurers can change your policy, including increasing premiums and reducing coverage, at any time. When you go to renew your insurance, you might find that where your pet was previously covered for 100 percent of a particular claim, that has dropped to 80 percent or less.

Some pets are more expensive than others. Some breeds are very expensive to insure, and it can be hard to get insurance for rescue dogs. Age and pre-existing conditions also affect the type of policy you can get. The premiums may be prohibitive or there might be too many exclusions to make it worth your while.

How do I decide if pet insurance is worth the money?

As with private health insurance, deciding whether or not to insure your pets can be tricky. If you are disciplined, it might be better to put money aside each week for pet expenses, adding extra for any unexpected vet bills.

 

 

Even if you decide insuring your pets is the best option, the number of coverage options for pet insurance can be confusing. But there are ways to make it easier to determine what is right for you and your furry friend.

Seek advice from your vet about your pet’s health. Ask questions such as:

• • What are the conditions I need to worry about treating now?
  • Which conditions could my pet develop later in life?
  • What would the treatments cost without insurance?
  • Do I have to pay upfront for all treatment (ie if they have a payment plan, this could make vet bills more affordable).

 

 

Get quotes from several insurers to compare policies. Ask if the policy:

• • Covers the average pet’s conditions
  • Includes pre-existing conditions
  • Covers dental
  • Includes common pet problems such as hip dysplasia
  • Covers neutering/desexing
  • Has wide gap variations, depending on the condition/claim.

If you decide to insure your pet, do so early before they develop any health conditions. The older the pet and the more pre-existing conditions it has, the more expensive the premiums will be.

Beware of hidden traps

One of the most important things you should do is read your product disclosure statement before you lock in insurance. You do not want any nasty surprises about what is in the fine print when you make a pet insurance claim.

If you have a problem with your pet insurer, contact the insurer’s internal dispute resolution department or lodge your complaint with us. We’ll help you handle it.