The different types of pet insurance policy

The time has come to compare pet insurance for your dog or cat, but it can be a daunting process if you're unsure of what each different policy type might cover. Before you start comparing pet insurance quotes and the amount of cover each provides, it's important to understand which product type is the most appropriate - both for your pocket and for Tiddle's or Fido's wellbeing.

Pet insurance usually falls under four categories, with each offering varying levels of cover.

Accident only pet insurance

Often seen as the lower-budget option, accident only pet insurance typically offers the most basic level of cover. Accident only pet insurance offers cover for vet fees, but only as a result of a sudden and unexpected injury within the 12-month policy period. This type of policy may be suitable for covering minor health issues or accidents, but financial and time limits may apply, depending on the policy terms.

If you have a young and healthy pet, you may be tempted to opt for accident only pet insurance due to the lower premiums. However, the cheapest policy may not offer the right protection for your pet. You may find it harder to find more comprehensive and affordable cover for your pet as they get older and perhaps develop medical conditions.

Time limited pet insurance

Time limited pet insurance policies allow you to make a claim for an eligible medical condition up to a specified amount, with each new condition covered up to the financial limit for 12 months. If the financial limit is reached within the 12-month period, the policy will no longer cover that condition; it becomes pre-existing and is excluded from future claims. So, after the 12-month period, or when the financial limit has been exceeded if earlier, no further pay-outs will be made, and you will need to pay for further treatment costs for that condition yourself.

This policy may be a good option for providing cover for accidents and short-term health issues. However, this type of cover may not be suitable for older pets or those with ongoing health conditions.

The Four Types of Pet Insurance Policy, Explained
Maximum Benefit of Pet Insurance

Maximum benefit pet insurance

Typically considered a mid-budget option, maximum benefit pet insurance policies usually cover each new medical condition for multiple claims up to the financial limit, for as long as the insurance policy remains in force (as there is no time limit on your claim).

This means you could claim more than once for a certain condition, year after year. Once the financial limit is reached, however, the condition becomes pre-existing and is excluded from future claims, meaning you will need to pay for further treatment from this point.

If your claim spans over two policy years, you may have to pay the policy excess for each year. For older pets, the policy excess may increase as well as the insurance premium as they are more likely to need medical attention.

This type of policy may be suitable should your pet require ongoing medication, such as steroids. However, if your pet goes on to develop a long-term condition that requires regular treatment, you may find you're left to fork out for treatment yourself after the financial limit is reached. This is where a lifetime policy can be beneficial.

Lifetime pet insurance

Typically seen as a premium option, lifetime insurance offers the most comprehensive cover for your pet and is usually the most expensive type of policy. As the name suggests, lifetime pet insurance should cover your pet for the duration of his or her lifetime, providing you renew year on year.

Under a lifetime policy, all new medical conditions are covered up to the financial limit. If the limit is reached during the insurance year, the cover stops for that condition until the policy is renewed. At renewal, the limit is fully reinstated, and the condition will continue to be covered in the policy the following year.

A more basic pet insurance policy may only cover your pet for a particular medical condition for a set period of time, usually 12 months. So, if you want cover in case your pet needs ongoing medical care should they develop a chronic illness, a lifetime pet insurance policy may be an option worth considering. As you may expect, this type of policy is normally the priciest, but you may find it worth the expense due to the additional level of cover provided should you need to submit a claim.

However, not all lifetime policies are the same, and some may not actually cover your pet for their whole life, depending on the age and health of your animal. Some policies may exclude older pets, which in the case of certain breeds, include animals aged five or six years old.

To ensure you do actually receive lifetime cover for your pet, be sure to check the policy wording carefully.

It is likely that your pet insurance premiums will increase, sometimes significantly, as your pet(s) get older, and / or if you have made a claim.

What is the 'financial limit' - is this a fixed amount?

The financial limit is the maximum amount your insurer will pay towards vet fees during a 12-month policy period. Some insurers define a financial limit for each individual condition, but others apply a limit to vet fees overall, for all conditions. Some insurers will do both.

For instance, an insurer may offer a £4,000 financial limit overall, with a £1,000 limit to each individual condition.

When you compare pet insurance quotes, the financial limit is indicated under the 'vet fees' header and the limit does vary between insurers and products, with some policies offering as little as £1,000 worth of cover and others offering up to £12,000. Make sure you consider vet fees carefully to ensure your cover is suitable.

Pet insurance policy types: comparison table

  Accident Only Time Limited Max Benefit Maximum Benefit Lifetime
Policy renewable every 12 months Y Y Y Y
Covers vet fees for sudden or unexpected injury or illness Y Y Y Y
Covers vet fees for each injury or condition up to a maximum amount following initial claim   Y Y Y
Vet fees for each condition are covered for 12 months following initial claim*   Y    
Vet fees for each condition are covered without any time limit following initial claim*     Y Y
Vet fees for each condition are covered up to a maximum amount, without any time limit, and the maximum amount resets every policy year**       Y

* You will need to renew your policy if the condition extends beyond your current 12-month policy
** Insurer may refuse or limit cover to exclude existing conditions at the renewal date

What is the 'financial limit' - is this a fixed amount?
What Else Can Pet Insurance Cover?

What else can pet insurance cover?

Medical bills

As vet fees are usually the primary reason for taking out a pet insurance policy, it's important to know how far your insurer will go to help you out with the associated costs.

When you compare pet insurance policies, look into whether the insurer covers consultations, examinations, scans, tests, medications, surgery or hospitalisation as part of the policy.

Some policies go as far as covering mouth problems with dental cover included, or even alternative therapies such as massage or acupuncture!

You could also consider whether certain therapies or treatments for behaviour are covered and to what extent. Individual insurers and policies have their own definitions of what is or isn't excluded from cover.

Third party injury & accidental damage

You may find yourself in hot water if your dog causes damage to someone else's property, or worse still, injures someone else. As Rover doesn't have a savings account, you as the owner could be considered responsible for costs to replace or repair a damaged item. If he hurts somebody, you could face a day in front of a judge for his actions.

Third party liability cover is sometimes included in your dog's insurance policy, and the extent of cover it offers can differ tremendously, so make sure the level of cover is adequate for your requirements. You won't find this type of cover if you're insuring your cat because, in the eyes of the law, Moggie is considered a free spirit, responsible for her own actions!

Accidental damage cover, however, is very much available to both dogs and cats but often with a number of stipulations and exclusions.

Death cover & cremation

Sure, it's hard to think about! However, some insurers offer a level of cover in the event that your pet should die from illness or an accident. Typically, a policy will cover the price you paid for your pet or their current market value, which may be particularly important if you paid a large sum of money for a highly sought-after breed or pedigree. Less commonly covered are the costs of cremation, although such cover is available. You'll usually need to delve into the policy wording or contact the insurer to find out.

Missing pet cover

A much-loved pet going missing is not only distressing, it can also be expensive to advertise your lost pet or offer a reward for its safe return. If your cat or dog goes AWOL, some pet insurance policies will cover the cost of advertising your lost pet and some policies may even cover the cost, or contribute towards, a reward for your pet's return. Not all pet insurance policies will cover this, so check with your provider if this type of cover is important to you.

Some of the other benefits and features of a pet insurance policy can include the likes of holiday cover, where an insurer may help towards the costs of travel or accommodation expenses should your pet fall ill while you're away. And if you find yourself needing emergency treatment or hospitalisation, kennel and cattery boarding fees can also be covered under certain policies.

It would be very rare to find two different pet insurance policies that cover exactly the same things to the same extent, so a big part of your initial pet insurance purchasing process will be to ensure you're prioritising what you want to be included and the amount of cover you require for vet fees.

Once you have an idea of policies that offer the level of cover you need, you could then focus more on price, or getting the best value for your budget.

Common exclusions

Whichever policy type you end up buying, it is important to read the terms and conditions of the insurance provider and the policy wording carefully before purchasing. Some of the common things pet insurance does not cover are:

  • Waiting period - Your new policy may not cover your pet for a short number of days after the policy starts, for example 14 days. This is to prevent you from taking out a policy with the intention of claiming for a foreseen condition.
  • Routine and preventative treatment - Regular pet care such as routine check-ups, annual jabs, worming and flea treatment are not usually covered by your pet insurance policy; and this may also be the case for procedures such as spaying and neutering. It's also important to be aware that if your pet becomes ill with a condition that could have been prevented by routine treatments such as a vaccination, your insurer may not pay out.
  • Breeding and pregnancy - Most insurers will not pay any vet fees if your pet suffers a condition related to breeding and your policy could be invalidated if you decide to use your pet for commercial breeding. Likewise, your insurer is unlikely to pay out for any claim linked to pregnancy, even if you are not a commercial breeder. If you do wish to breed your pet, you are likely to need special cover for this.
  • Pre-existing conditions - Any pre-existing illnesses must be declared otherwise your policy may be void. For example, if your pet has suffered from an ear infection before you took out your policy, the insurer is unlikely to offer cover for treatment required for future ear infections, regardless of whether or not you made a claim under an old policy.

Here at Compare Cover we understand that with so many different products available, it can be tricky to determine which could be the most suitable for you and your furry friend. That's why when you compare pet insurance with us, we do all we can to make the benefits and features of each policy as clear as possible.

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