A recent Which? survey warns of expensive policy clauses and rising pet insurance premiums for policyholders
If you decide to buy insurance for your beloved pet you could be left with hefty premium increases, especially if you were an AXA pet insurance customer. AXA decided last month to exit from the market leaving policyholders to look for a new insurer. Yet, these aren’t the only customers likely to experience hefty rises in premiums.
As with humans who take out private medical insurance (PMI), latest research from Which? shows many pet insurance premiums can become prohibitively expensive as a pet ages. Which? surveyed 1,675 Which? members with pet insurance and found the average premium increase for a lifetime policy for dogs, from ages five to seven up to 13-plus years, was 52%. For cats, it was a staggering 147%.
The survey showed that by the time a dog is aged over 12, the average annual premium paid by Which? members is £544 for a lifetime policy. For cats at the same age, it’s £334.
Rising pet insurance premiums are always a concern to policyholders. It is hard not to get the impression that insurers only want you as a customer when the risk is low, but as soon as a pet starts to age they try to price you out of the market by making premiums unaffordable. Which? discovered that many pet insurance policies hit policyholders with a double-whammy, requiring policyholders to pay a contribution towards treatment costs on top of any excess.
Some insurers applied this clause to pets as young as three. Which? asked for pet insurance for a three-month old female Golden Retriever based in London. Just under a fifth (18%) of insurance policies offered required a 10% contribution towards treatment costs. For a three-month old kitten based in London, the proportion of policies requiring a 10% contribution was lower, at just over one in ten (13%).
This proportion increased to two in three for a Golden Retriever at nine years old and 39% for a cat of the same age. The amount of money expected to be paid towards a claim also increased to 20% for many policies.
Customer scores for 11 leading pet insurance brands, rated by Which? members resulted in John Lewis and Animal Friends receiving the highest customers scores of 63% and 62% respectively, while market leader Petplan came in third with 59%.
At the other end of the table, E&L received the lowest customer score in our survey with 44%.
|Pet insurance customer satisfaction|
|Customer service||Value for money||Transparency of charges and penalties||Customer score|
|John Lewis (136)||63%|
|Animal Friends (125)||62%|
|Tesco Bank (162)||54%|
|M&S Bank (76)||50%|
|The Kennel Club (37)||49%|
|Direct Line (84)||48%|
|Sainsbury’s Bank (82)||48%|
The Which? survey was based on 3,158 respondents from the Which? Connect panel about their pets in November 2014. Of these 1,675 had pet insurance policies and rated their providers. Only companies with a minimum sample size of 30 were included in the results. Where a ‘-‘ is shown Which? has insufficient sample size for that rating.
Editor of Which? Money, Gareth Shaw said: “High veterinary bills can be crippling for some people and many animal lovers think pet insurance can be cost effective. But we have found premiums can give policy holders an unwelcome shock as their pet matures.
“We’d like insurers to communicate more about the factors that drive up policy costs and last year’s premium alongside the renewal quote, explaining any differences. We’d also like to see insurers doing more to explain how costs are likely to increase over the age of a pet.”