Avoid chronic vet bills

Stanley, a Cocker Spaniel from Birmingham, became a media star and possibly the UK's youngest 'bionic' dog when he received a total hip replacement. But that operation cost more than £6,000.

Luckily for Stanley, his vet had provided his then owner with four weeks' cover from pet insurer Petplan on his first visit to the surgery, before the condition became apparent. But because his hip problem was diagnosed during those four weeks, his owner was able to extend the cover and Petplan picked up the full cost of the operation and ongoing treatment.

Pet insurance is probably one of the first policies that people consider dropping when money is tight. But it is also the one policy that, as a pet owner, you are most likely to benefit from: pets often get into fights, sadly get run over and can develop lifestyle-related conditions all too familiar to humans.

One in three pet owners makes at least one unexpected trip to the vet each year, according to research by Petplan, and it's not unusual for vets' bills to run into the hundreds and, in serious cases, thousands of pounds. But with cover in place, you can rest assured that you can afford the cost of your pet's medical treatments.

Katya Mira of the RSPCA says: "We urge all pet owners to get insurance for their animals. Unexpected veterinary bills can be very expensive and it could be heartbreaking for both animal and owner if they don't have the money to give them potentially life-saving treatment."

Pet insurance is just as important for pet owners whose animals develop a long-term, chronic condition when, due to their ongoing nature, the costs soon add up.

My blue Burmese Jasmine developed diabetes after a bout of pancreatitis. Her condition could be maintained with daily injections of insulin and she enjoyed a long and comfortable life. When she finally died at the age of 20, I had paid out £4,287.60 in insurance premiums to her insurer More than, but this was dwarfed by the £9,873.14 it paid out to cover the cost of Jasmine's veterinary care during the last eight years of her life.

However, it is vital to understand what you are buying to avoid disappointment when making a claim. the cover offered by different insurers varies widely, and each insurer usually offers at least two types of policy.

Types of policy

The cheapest pet insurance policies provide cover on an annual basis. annual policies last, as their name suggests, for 12 months and can be renewed each year until the pet reaches a certain age, typically from eight to about 10 years old. after this age, the insurer is likely to provide a senior policy, offering reduced cover and more exclusions.

With an annual policy, if your pet develops a condition, it will be covered for the rest of that policy period, but will be excluded if you renew the following year.

The fullest cover, and therefore the most expensive, is provided by lifetime policies. these can be renewed every year for as long as the animal lives without alterations to the level of cover. this means that if your pet develops an on-going condition you can continue to claim for as long as your pet needs treatment.

Some lifetime policies may set limits for the total amount that can be claimed on any one condition, while others have an annual limit but start afresh each year when the policy is renewed.

Cover varies, but most policies exclude dental treatment, which can prove a costly exclusion if your pet needs anaesthetising every time its teeth are cleaned.

It's a good idea to check whether your pet's breed tends to suffer a particular condition and make sure the policy you buy provides cover for it. The insurer will undoubtedly load the premiums, but it could save you a lot of money and heartache in the future.

Your policy should provide third party liability: this covers the cost of a successful claim for damages made against you as a result of your pet's behaviour – if it causes a car crash by running into the road, for example.

What else is covered?

In addition to covering veterinary costs, a policy may provide: a death benefit equivalent to the original purchase price if your pet dies prematurely through illness or accident; holiday cover in case you have to cancel your holiday because your pet is sick; missing pets cover, enabling you to claim for the cost of advertising the loss of a pet and offer a small reward for its recovery; and accidental damage cover.

No policy will cover the cost of pre-existing conditions or preventative treatments such as annual vaccinations, neutering, pest treatment or grooming. But you will benefit from keeping your pet healthy – the more you claim on a policy, the higher the premiums will rise at renewal time.

Depending on what your vet allows, some insurers – such as Petplan – will pay the vet directly in the event of a claim, making claims reasonably hassle-free.

How much does it cost?

Policies range in price from about £5 a month for a kitten living in the country to more than £100 a month for an elderly pet with existing conditions living in London.

Pedigree pets are more prone to certain conditions because of their breeding, and are more likely to be stolen – so, again, cost more to insure. Likewise, you will face premium loading if you live in an urban area where running a veterinary surgery is more costly.

So shop around – comparison websites including Confused.com and Moneysupermarket.com can help, but check the small print. Be aware that comparison tables do not include all pet insurers – the priciest ones offering the best cover are likely to be left out.

Like car insurance, pet policies come with an excess: this can be either a fixed amount, £50 say, or a percentage of the bill. The insurer may offer the option of adding a voluntary excess on top of this, resulting in lower premiums. But be aware, most will charge a separate excess for each condition.

Look out for multi-pet discounts if you have more than one animal. Some policies offer parts of the cover – the death benefit and holiday cover – as optional extras: cutting these out could save you a considerable amount over your pet's lifetime.

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