Pets are part of the family but insurance can be a headache

The expense of operations and other procedures can be unexpected and may arise at a difficult time. It is far better therefore to take out pet insurance where good policies and reliable underwriters will finance most such costs.

There are five different ways that claims may be paid:

Per condition with all fees paid to a prescribed amount with no time limit

Per condition to set limit which is reset annually

Per condition limited to 12 months and for set sum

Per year to annual limit

Per year for life with maximum fee limit but no condition limit.

Do not be hoodwinked into otiose language which appears to cover all the latest fads. Insurers love neologisms, hoodwinking many into thinking the policies on offer will fit the criteria.

Instead look for top ratings which have been investigated by independent researchers like Moneyfacts and ask experienced brokers for advice, particularly if the animal may need specialist care.

If using an internet comparison site, check the actual limits for each condition as often they do not make it clear when insurance will end, either on grounds of age or type of treatment required.

Some budget policies appear remarkably cheap but this is because exclusions apply as well as requiring the policyholder to fund a larger excess for each claim. The best policies continue to pay for treatment as long as it is necessary rather than ones which will not go further than the year in which the claim is made.

Whilst there are specialist pet insurers, do not overlook well-known brands that may not be obvious in providing pet cover, like the AA whose policies are arranged by Ultimate Pet Partners and underwritten by Zenith Insurance.

Similarly, it may be surprising how many high street names offer plans. They range from major retailers (Argos and Debenhams to John Lewis and M&S) to such supermarkets as Asda, Sainsbury’s and Tesco. There are a few banks to also consider, like NatWest and Royal Bank of Scotland.

If there is a preference for using a particular vet for surgery or other clinical treatments, ask the insurer if there is any restriction. Petplan, for instance, says policyholders can choose any vet.

Cost comparisons with human practices are not possible. A scale and polish for a dog can cost £100-300 whilst adults typically pay £50. The additional cost is because the pet has to be anaesthetised.

Vet bills can be amazingly high. Murphy, an energetic Irish terrier, has lived with its owner since he was a four-month-old puppy. At around 10 months, the dog developed a persistent cough that refused to go away.

A vet diagnosed a serious congenital lung disorder which resulted in expensive treatment with Petplan – underwrtiien by Allianz – paying out over £40,000 under its ‘Cover for Life’ policy.

Currently, nearly 4.3m pets are insured with £279 the average annual premium, a reduction for the first time in eight years, according to the Association of British Insurers (ABI). Insurers say there is a worrying level of under-insurance among cat owners. Only 1.3m cats are protected, leaving 6.3m uninsured.

Last year the ABI says the average claim rose £36 to £793 with £785m being paid out. Over the past decade, claim values have jumped 75 per cent.

Typical veterinary charges near to your postcode will affect the quotation. Some facilities, as shown in the Channel 4 series, Supervet, could give a spike to premiums, notably where MRI and CT scanning machines are used.

Essentially, this means that more advanced and higher priced techniques not only have to be paid for but should result in a pet enjoying a longer life. Increasingly, insurers are aware that a pet could be referred on to a ‘super-vet’ and have imposed limits on treating conditions to prevent galactic claims being paid.

The breed will also have an impact on prices and insurers use algorithms to calculate premiums based on past claims for the same animal.

Direct Line, a major pet insurer, says the five top reasons for cat and dog claims are:

Tumours, warts, growths, cysts

Musculoskeletal disorders

Gastro-intestinal disorders

Wounds

Poisoning.

Increasingly, pets accompany their owners on holidays abroad. If this is likely, ask about cover outside the UK. It is covered in some AA policies but monetary and time limits apply.

All Petplan policies (cats, dogs and rabbits) include the cost of treatment if a pet is taken ill in the EU.

Out of hours treatments can markedly increase costs but may be necessary with emergencies. New pet owners can be surprised, comparing human medical expenses but forget that the NHS provides such assistance free through the A&E departments of state hospitals.

Taking out insurance once a pet is ill is not permitted. Look at the exclusion period before any claim can be made which is usually a fortnight as with Animal Friends, Direct Line, LV= (formerly Liverpool Victoria) and MoreTh>n , part of Royal & Sun Alliance. The latter underwrites several pet policies including Tesco.

If moving insurer, overlap the policies to ensure the pet is protected. Whilst this means double cover, the saving made could be worth it. However, when seeking fresh cover, reveal all existing conditions and be open about past treatments as non-disclosure could result in the policy being cancelled when a claim is made.

A new insurer may appear superficially to give a welcome saving. In reality, it is unlikely to continue providing treatment for an ongoing condition without imposing special rates. Watch, too, for wording regarding obesity as the premium may not have allowed for such a condition.

Allianz says that one in three dogs and one in four cats and rabbits are overweight.

Insuring a pet other than a cat or dog is offered by fewer firms. Horses and riders can be covered by Petplan Equine.

A policy can be invalidated if a dog is used for guard duties, hunting, security or track racing.

The rating agency Defaqto assesses that “pet insurance is likely to be the most complex insurance product that a personal insurance customer can buy.”

This is because veterinary bills form the basis for cover – plus liability with dog policies for accidents that can occur – but so many other extras are available which range from accidental death, loss or theft to advertising with or without a reward for a lost pet.

Conal Gregory is AIC Regional Journalist of the Year.