In recent years huge advances have been made in veterinary medicine. Vets can now do things to improve the health and welfare of pets which would have been unimaginable or impractical a few years ago. Not surprisingly, these advanced surgical and medical treatments are often expensive so that a vet's bill for intricate surgery or a prolonged course of treatment may be several hundreds of pounds. For example; around £400 to care for a cat with a broken leg and £800 per year to treat a dog with diabetes.With no NHS for pets, many owners worry that they will not be able to afford to pay for treatment if their pet becomes sick or has an accident.

Pet insurance works like most other forms of insurance.  A premium fee is paid monthly or yearly to an insurance company, who would then reimburse you for any major veterinary costs accumulated, should your pet fall ill.

Polices exist for dogs, cats, horses and rabbits. Not all Pet Health Insurance policies are the same and as with any other insurance, you need to read the small print carefully to ensure that the proposed policy is the one to suit you and your pet.

What to look for in an insurance policy

What costs are covered by the insurance?

The cover provided will depend on the type of policy and the cost of the premium. Typically, a policy will pay for the costs of major veterinary treatment for illness or accident. Most insurance policies also insure against third party injuries, accidental damage caused by the animal, the cost of your animal if it is lost due to theft or straying and death of the animal from accident or illness before a certain age. These are often just as important as the vets fees. For example, if a dog causes a road traffic accident, the owner is responsible for any cost incurred should the animal be uninsured. A few companies cover things such as euthanasia or veterinary fees for whelping & kittening. Some policies even offer cover for holidays cancelled if your pet has urgent surgery or goes missing up to 7 days before or while you are away. Some policies cover the cost of advertising and a reward if your pet gets lost or stolen.

Policies are not designed to cover day-to-day maintenance and routine health care. Treatment of diseases which were already present at the time that the animal was insured will usually be excluded from cover. Vaccinations, neutering costs and other routine preventative treatments are also exempt under most policies, as are the costs relating to an animal which becomes pregnant.

How is the premium calculated?

The premium that you are charged will depend on a number of factors, including:

·       Insurance company and/or policy within a company that you choose.

·       Species of animal.

·       Breed of animal (pedigree's are usually more expensive to insure than cross-breeds or mixed breeds).

·       Age of animal when you commence the insurance policy

·       Value of animal

·       Post-code - veterinary fees are much higher in some parts of the country than others. Also, animals in urban areas are at greater risk from man-made hazards and have more frequent contact with other animals.

Be aware that some pet insurance schemes may offer cheaper premiums for younger pets which become very expensive as the animal gets older. By then it may be too late and you won't be able to insure existing illnesses with anyone else! Policy excesses for older pets can also rise alarmingly unless you choose carefully.

What is the Excess?

Most policies will have an "excess" figure which the insurance companies will deduct from any claims received. For example, if your policy has an excess of £50 and you acquire veterinary costs adding up to £150, you will receive £100 returned from your insurers. Claims are processed on an "individual condition" basis. Many pet insurance companies now require payment of an excess in every year for each condition claimed. You may even be asked to pay a proportion of each treatment. Some only require an excess to be paid once for each condition. This can result in significant savings.  This means that the smaller "one-off" problems (for example cat-bite abscess, torn claw or mild stomach upsets) usually aren't claimed for as the costs incurred are often less than the "excess".

Some pet insurance companies change the excess as your pet is becoming older.

With some companies 3rd party liability carries a higher excess. Some companies only charge an excess for veterinary fees and boarding fees.

How does a claim work?

The normal procedure is for the owner of the animal to pay the full amount of a claim to the veterinary practice, and then we will send a claim for the amount directly to the insurance company along with a copy of our clinical notes and costs.  They will check that they agree with the amount being claimed for, and usually then send a cheque for the full amount (less any excess) directly back to the owner of the animal.

Are all insurance policies the same?

Not at all - there are many companies offering pet insurance these days - some are independent, others are subsidiaries of other companies (e.g. the supermarkets). Most offer different types of policy too - for example a "basic" policy may just cover vet's fees up to a certain limit, whereas other policies may protect against kennelling fees, cost of holiday cancellation etc. When thinking about taking out a policy, you should consider the following:

• What level of cover do you want?
• How much are you prepared to pay as a premium?
• Does the policy allow you to pay monthly or annually?
• Is there an upper limit to the amount for which you can claim? If so what is it and is this realistic for your pet?
• Is your pet covered for life?

·       This is invaluable if your pet develops an ongoing long-term condition such as diabetes, arthritis, eczema etc., as the majority of policies will stop paying out after the first 12 months and then it will be excluded when the policy comes up to renewal. Or alternatively the policy may offer a maximum benefit, which means over the pet's lifetime they will only pay up to a set figure per condition regardless of the cost of treatment. Having a policy that covers your pet for life means that there is no time limit on how long you can claim for each illness or injury, regardless of severity. All you need to do is renew the policy each year and the full veterinary fees benefit is reinstated.

• If you need to claim on your pet insurance, will the company make premium penalties for the next years cover?
• Are there any age restrictions on starting a new policy? Many companieswill not accept new policies for dogs over the age of 8 (6 for Specified breeds), cats over the age of 10 years and rabbits, guinea pigs and chinchillas over the age of 6 years.
• Is there an age limit on the policy? Will cover stop once the animal reaches a certain age or is there a premium change when a certain age is reached?
• Are there any exclusions that may cause you particular problems? i.e. inherited problems or genetic disorders?
• How much time and effort will be needed to make a claim? A good insurance company will process most claims within two working days of receiving the documents from your vet.

The decision to take out pet insurance, or which company/policy to go with is going to be based on individual circumstances. However you should always try to:

• Look at several different companies - see which ones offer the level of cover that you will require
• Check the small print - do they cover chronic conditions or long-term treatment?
• Talk to friends with animals - see if they have had particularly good or bad experience with insurance companies.
• Take out insurance early - the unexpected can happen at any age or at any time. What you will have to be careful of is taking out insurance after a particular problem has been identified, as this will not usually be subsequently covered by your policy.
• Talk to your vet or veterinary nurse - we are always able to help and sometimes advise on which type of policy may be better for you, although we cannot recommend a specific company for legal reasons.

Look at the broad picture - the policies with the cheapest premiums may not be the best. It is often a case of you get what you pay for!

An internet insurance advice service has been set up by a veterinary surgeon from general practice. The website is free to access and provides an extensive list of insurance companies providing pet healthcare insurance and details of their policies, advice about insurance, the types available and the cost, as well as details on what is covered (and what's not). For more information visit www.insureyourpet.co.uk