Pet Insurance Pricing Explained

There are many different factors that affect the price of all insurance products, including pet insurance. Some are specific to you and your pet, such as your dog's age, and others are as a result of our constantly changing world, such as the cost of veterinary bills.

Our insurers use many years’ experience and expertise to analyse these pricing factors and calculate an insurance premium that reflects the individual circumstances of you and your pet. They also constantly analyse and review the prices we offer our customers to ensure they deliver fair value. With each pet insurance provider offering different terms and types / level of cover, you may find that the prices you are quoted differ greatly from one policy to another.

Whilst the price of the policy is one of the key deciding factors for pet owners, you must also ensure that you research the different types of pet insurance, such as lifetime or time limited, as well as policy benefits and the level of cover that fit what you need. Without this research, you may find that when you come to make a claim or renew your insurance, your policy doesn't offer the cover you require or that you are paying a high premium for cover you may not need.

Your Pet Insurance Price

There are many factors that impact the price of your pet insurance both when you first purchase a policy and when that same policy comes up for renewal. See the infographic below for a quick overview of the main influencing factors.

Your Pet's Breed

Whether you have a crossbreed or prized pedigree like a Poodle or a Ragdoll, your pets’ breed will have a significant impact on the price of your insurance. There are several reasons for this, such as the breeds life expectancy, susceptibility to hereditary or congenital health problems, and their general behaviour.

Some breeds of cats and dogs are known to have a higher life expectancy than others. This generally will mean that they live a healthier life and therefore require less veterinary treatment, though it is not always the case.

Pure breeds can sometimes be susceptible to hereditary or congenital health problems, while crossbreeds can often be hardier.

Another important factor when it comes to the pet’s breed is the average size. In this case, size does matter! For example, bigger cats and dogs require larger doses of drugs when they become ill, which will cost more. Their treatment recovery can also be more complex and take longer. On the other hand, some smaller breeds have their own issues, such as an increased risk of dental problems – this will be reflected in the cost of treatment and in turn, pet insurance price.

Some of the healthiest dog breeds, for example, include:

• Australian Cattle Dog
• Border Collie
• Chihuahua
• Greyhound
• Poodle

Your Pet's Species

Similarly to the pet’s breed, there is also a difference between insuring a dog and a cat. 

In general, it is cheaper to insure a cat than it is a dog. One reason for this is because they tend to require less veterinary treatment and, when they do, it is often cheaper. Another reason is that cat insurance policies do not include third liability cover whereas the majority of those for dogs will as standard.

Your Pet's Age

Like their owners, as pets get older, they are more likely to have health problems, resulting from accidents or illness. The reality is that this means you can expect your pet insurance premium to increase year on year to reflect the higher risk to the insurer due to your pet’s age.

When your pet reaches a certain age, generally around eight or nine, the insurance premiums can also increase drastically to reflect the increased risk of illness/injury. Whilst this is true for most pets, it still depends upon some factors specific to breed, such as life expectancy and general health.

Where You Live

The main reason the region you live in impacts the price of your insurance is because the cost of veterinary treatment can differ greatly from one area to another. If you live in a location in which vet fees are generally more expensive, this will be reflected in your premium as the insurer is pre-empting the increased risk of costly veterinary bills.

Claims History

If you have made a claim on your pet insurance policy, this will often, but not always, impact your premium, especially at renewal. The reason for an increase is that the insurer is anticipating a higher risk of future claims. 

Type of Cover

In the UK, there are a range of different types of pet insurance policies such as lifetime and time-limited. Each policy type is designed differently to meet the varied needs of pet owners.

The type of cover you choose will have a large impact on your annual or monthly insurance premium.

For example, a lifetime policy will cover the cost of veterinary fees up to a maximum amount which is reinstated each year and even continues to cover long-term chronic illnesses when a policy is renewed, so long as they don’t pre-date the policy. For this reason, lifetime policies are often referred to as a comprehensive form of pet insurance and it is usually the most expensive option.

Another type of pet insurance policy available in the UK is called time-limited. These policies allow you to make claims for accidents, illnesses, and/or conditions up to a maximum amount, say £1,000, for a predetermined period following the onset of the condition. This is usually 12 months, but it is important that you check this before purchasing a policy. After that time is up, or the maximum amount is reached, that condition will be excluded from all future claims, as per the terms of your policy. Generally, this is one of the cheaper pet insurance options available to pet owners.

It is important that you do your research so that you choose the type of cover that best suits your needs. This will mean that you’re less likely to be caught out when you try to make a claim and you’re also not paying too much for cover that you don’t need.

We've created a guide to help you understand the different types of pet insurance so you can make the right decision for you and your pet.

Veterinary Fee Cover Limit

The veterinary fee cover limit, or level of cover, that you select for your pet insurance policy will have a huge impact on the price. This will be the maximum amount that your insurer will pay towards veterinary bills either for all bills in total, per condition, or time limited, depending on the type of cover you have chosen.

The higher the level of cover you choose, the more expensive your policy will be as the insurer will pay out a higher amount if a valid claim is made. 

When selecting your level of cover, you should consider all of the factors in the 'You and Your Pet' section of the above infographic. Reviewing this information and researching online should help you decide whether a higher or lower level of cover will suit your pet's needs.

Advances in Medical Treatment

Developments in veterinary medicine, treatments, and complementary therapies has improved rapidly in recent years, with access to specialist referral clinics and vets much more widely available than ever before.

Treatments that were once considered prohibitive have become more likely to be prescribed by vets as part of treatment such as acupuncture, orthopaedics, hydrotherapy, dialysis and even chemotherapy.

According to MoneyHelper, surgery for a pet costs £1,500 on average, whilst regular treatments such as chemotherapy can be as much as £5,000. These costs are increasing regularly and that has been followed by an increase in the average pet claim of 75% in the last 10 years, climbing to £817 in 2020, according to ABI. This will be reflected in the price of your pet insurance.

Liability

As a responsible pet owner, you take necessary to make sure you are in control of your dog when you’re out on a walk, making sure they’re on a lead where necessary and ensuring they don't run off or cause harm to others. But there are times when it’s safe to let them explore on their own, off the lead. Innocent investigation can result in an unexpected accident if your dog happens to excitedly introduce themselves to somebody out walking and unintentionally knock them over, causing them injury or they may attack another dog or cause an accident. As you are personally responsible for your dogs’ behaviour, a claim may be made to cover the cost of medical treatment or demand compensation for damages.

Since 1971, cats have been ruled as free spirits, meaning that you as their owner are not liable for any damage they cause to another person or their property. This means that third party liability isn’t included in any cat policies and it’s one of the reasons why cat insurance is generally cheaper than dog insurance.

Policy Benefits

Every pet insurance policy is different and it’s important that you research what is or is not included in a policy before you commit to it.

For example, there are some policy benefits which some insurers provide as standard whilst others don’t such as dental care, complementary therapy, and death of pet cover.

In some cases, these extra benefits may be reflected in a higher premium. The opposite may be true for a policy with minimum policy benefits.

Insurance Premium Tax (IPT)

Every Pet Insurance premium includes Insurance Premium Tax (IPT). The Government sets the rate at which IPT is charged and between 2015 and 2017 this was increased from 6% to 12%, and prices rose to include this increase. If this changes again in the future, it will likely be reflected in insurance premiums.

Excess and Co-Payment

Excess is the amount that a policy holder must pay towards an approved claim.

In addition to the excess, many insurers require a co-payment or co-insurance which is a percentage of the overall claim, after deducting the excess, that the policy holder must pay.

When you’re searching for pet insurance, you will notice that each provider’s excess and co-payment are different. In some cases, the amount of excess and / or co-payment may have an impact on the overall cost of the insurance premium.