What Does Pet Insurance Cost?

Looking to protect yourself in the event that your beloved pooch or kitty has to undergo expensive surgeries and treatments? Canstar reveals some trends and insights in pet insurance that owners should be aware of in 2017.

Current pet insurance premiums

While other types of insurance like health insurance are ‘community rated’ (meaning that everyone in a certain age group pays a similar fee), pet premiums are driven by a number of factors, like the breed, age, size, and hereditary conditions of your furry friend.

Premiums for pet insurance have increased over the last few years, and Medibank believes that these premium hikes in pet insurance could have been caused by the dramatically rising number of pet owners in Australia.

Other key drivers could include advances in animal medical treatment and surgeries, improved technologies, the increasing average age of pets nationwide, and the rising cost of vet bills.

The size and age of the pet are two key influencers of pet insurance premiums. You can see an example of this in the table below, which shows the cost of premiums for cats, small dogs and large dogs based on their age and type of cover.

This snapshot of pet insurance premiums shows a factor influencing premiums is the age of the pet, also noting that cat insurance on average is cheaper than dog insurance.

Average annual pet insurance premiums for cats, small dogs and large dogs
Type of Cover Age Accident Only Accident and Illness Accident, Illness
and Routine Care
Cat Less than 1 year $396 $484 $658
2-3 years $389 $475 $603
4-5 years $416 $534 $669
6-7 years $457 $616 $770
Small dog Less than 1 year $623 $769 $931
2-3 years $605 $730 $786
4-5 years $654 $833 $900
6-7 years $805 $1045 $1123
Large dog Less than 1 year $659 $799 $931
2-3 years $648 $766 $786
4-5 years $712 $875 $903
6-7 years $872 $1091 $1123

Source: Canstar Pet Insurance Star Ratings, 2017. Average annual premiums (rounded to the nearest dollar) are for NSW, based on all cat, large and small dog breeds considered within the Canstar Pet Insurance Star Ratings in 2017.

For instance, based on the data above you can see that you can expect to pay more when taking out Accident Only or Accident and Illness cover for a larger breed of dog (such as a German Shepherd) than for a small one (like a Cavalier King Charles Spaniel). The difference between Accident Only cover for a 4-5 year old small dog and a similarly aged large dog annually is more than $50. Likewise for 6-7 year old large and small dogs under Accident and Illness cover.

Interestingly, there appears to be little difference between the cost of large dog and small dog pet insurance under Accident, Illness and Routine Care. Although the average annual premiums for this type of cover appears to be the same, these premiums do vary for certain breeds.

Accident, Illness and Routine Care Cover is much more comprehensive in terms of what it covers, as it protects you not only from accidents and illnesses affecting your pet but can also cover routine care such as desexing, microchipping and vaccinations. As a result, Accident, Illness and Routine Care is better suited to people whose pet breeds are prone to certain health conditions.

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On the other hand, Accident Only insurance – which tends to cover common claims for injuries, such as car accidents – is cheaper, often costing hundreds of dollars a year on average less for the various types of pets.

Each type of pet cover has its advantages and disadvantages, so it’s worth knowing the needs of your pet before settling on a particular type.

 Related article: Types of Pet Insurance 

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Pet insurance premiums by age

Age is one of the biggest contributors to differences in premiums. Pets don’t live as long as we do, and it is likely that older pets will develop some form of illness or condition as they age.

Read our guide ‘Is pet insurance worth it?’ to see how much you can expect to pay in total premiums over the course of your pet’s lifetime as they get older.

The infographic above shows how much you can expect to pay in annual premiums for cats and dogs of varying ages under Accident, Illness and Routine Care in NSW. Both sets of data show that pet premiums are actually cheaper at 2-3 years old than they are at under 1 year old, before increasing in price as the pets get older. This supports the figures from the chart above, which shows Accident, Illness and Routine Care increasing in price with age, as do the other types of cover.

The data also shows that in terms of annual premiums, cats are cheaper on average than dogs. There are a variety of reasons why premiums for the two animals are different, however, such as the different breeds available and any hereditary conditions common in said breeds. There is also the fact that on average cats tend to live longer than dogs, which also has an effect on premiums.

Considering pets are at a greater risk of developing some form of illness or condition as they get older, it might be worth taking out insurance at an earlier age before conditions develop. If you want to insure a pet aged 7 or up, then you need to be prepared to fork out a little bit more, noting that many insurers aren’t willing to accept new applications for pets past a certain age.

Trends in pet ownership in 2017

In 2017, Animal Medicine Australia (AMA) released a report titled Pet Ownership in Australia. This report outlines the key findings from a study undertaken by AMA, drawing information on pet ownership trends among all Australians throughout 2016.

As well as all of the information below, this report outlines 5 key insights into our pet ownership in 2017:

  1. Overall pet population in Australia declined by 9% from 2013 to 2016, as a result of decreases in the population of birds and fish.
  2. However, the ownership of dogs (up 3%) and cats (up 6%) increased from 2013 to 2016.
  3. Cost and responsibility are the main barriers to pet ownership.
  4. The increase of urbanisation and renting present the biggest threat to growing pet ownership as many multi-dwelling developments exclude pets.
  5. Dogs and cats are now more than just companions, they are considered to be part of the family.
  6. Australians are spending more on premium pet products, pet services, and pet insurance to manage and enhance the wellbeing of their pets.

So what else did AMA find?

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How many pets do Australians have?

Australia has one of the highest rates of pet ownership in the world, with 63% of households owning at least one pet. According to AMA, the global average of owning a pet is 57% of each country’s population, compared to Australia’s 63% average. The USA has the highest rate of pet ownership overall, with 65% of households owning any type of pet, closely followed by New Zealand (64%), Australia (63%), and the UK (40%).

In total, there are estimated to be 24 million pets in Australia at the time of writing, slightly more than the approximate 23.77 million population of people!

Are premiums affecting pet ownership?

According to the RSPCA, responsible pet ownership means providing for all the requirements of your pet, which includes paying for their health care as well as food and exercise.

With insurance premiums increasing across the board, AMA data shows that ongoing costs like insurance premiums are the third biggest concern for pet owners, with 28% worried about providing for their pet long-term.

However, as you can see above, pet ownership rates have continued to increase nationwide, so it would seem the rising cost of pet insurance premiums have not negatively affected pet ownership.

What types of pets do Australians own?

Dogs remain man’s best friend in Australia, with 4.8 million of them spread out across 38% of Australian households. More than half of these pet dogs are pure breeds (52%), while 41% are mixed breeds, and the remaining 7% are designer breeds.

As expected, cats are the second most popular pet in Australia, as there are 2.7 million households that have at least one kitty. With a total population of 3.9 million cats in Australia, most households that have a cat have more than one. Three-quarters of Australian cats are mixed breeds (76%), while the rest are pure breeds.

For the first time, AMA also examined small mammals and reptiles in the study, which found that surprisingly, 3% of Australian households own reptiles.

How much do we spend on pets?

Australians like to splurge when it comes to treating our furry friends. In total, Australian households are estimated to have spent more than $12.2 billion on pet products and services in just the last 12 months – a massive increase of 42% since 2013.

Australian cat and dog owners are spending an estimated total of $490 million per year on pet insurance, with households spending almost twice as much on dog insurance than cat insurance.

Despite a sharp increase in pet insurance usage rates from 2013, many pets in Australia remain uninsured, leaving pet owners at risk if health conditions, illness, or accidents arise. In 2016, only 26% of households with dogs and 18% of households with cats had taken out pet insurance policies. This is a dangerous game to play, as vet fees can be unpredictably expensive.

According to the RSPCA, the average claim for something as common as intestinal obstruction is nearly $4,000, while the most expensive diagnosis is an Oesophageal Perforation, with an average claim of $7,750. You do not want to be stuck with the bill for one of these, so it isn’t a bad idea to be covered should the worst happen.

To find a policy that works for your pet’s needs, try using our Canstar comparison website for pet insurance:

Compare Pet Insurance with Canstar

Related article: What Do Pets Really Cost? 

Is pet insurance worth it?

AMA states in its report that pets have never been more important to Aussie families than they are right now, and two-thirds of households now see their pets (or ‘furbabies’) as a part of their family.

A lot of people argue that you can’t put a price on family. At Canstar we tend to agree, which is why we continue to believe that on the balance of things, pet insurance is a valuable product.

You need to make sure you have the right policy, however. It’s important to be aware of the benefits and limitations of each policy, what everything will cost, and what you will and won’t be covered for.

We can help you be confident that you’re choosing an outstanding value policy. Compare pet insurance policies with Canstar and check our 2017 Pet Insurance Star Ratings to search for a policy to suit your pet’s needs.

Compare Pet Insurance Policies with Canstar

Read Canstar’s 2017 Pet Insurance Star Ratings Report

The inclusions mentioned represent a selection of what is covered at the time of writing. Additional terms and conditions may apply to different features. Additional fees may apply to the product. Please ensure that you read the product disclosure statement to determine all the current options and inclusions for the product you are considering.

For more information, read our detailed disclosureimportant notes and additional information.. Any advice on this page is general and has not taken into account your objectives, financial situation or needs and is not a recommendation for your particular circumstances. Consider whether this advice is right for you. You may need financial advice from a qualified adviser.

The Star Ratings in this table were awarded in July, 2016 and data is as at that date, updated from time to time to reflect product changes notified to us by product issuers.

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