Why is the cost of owning a pet going up? Plus expert reveals how you can reduce pet insurance premiums

According to the most recent data from the Association of British Insurers (ABI)*1, an incredible 4.3 million UK pets are protected by insurance. But despite these huge numbers, 39% of dogs and 41% of cats still don’t have pet insurance, which means there are a big chunk of UK pet owners at risk of huge vet bills if their pet was to get ill or get in an accident.

The average cost of owning a pet can be anywhere between £4,500 and £30,000 over the course of their lifetime without pet insurance, according to the ABI*2. While there is a monthly cost with pet insurance and it can’t cover all costs, it can actually reduce costs in the long run if your pet is protected, particularly if they were in sudden need of unexpected vet treatment. Surgery for a cat’s broken tibia costs nearly £2000 and treatment for a dog with diabetes costs over £1200 over a two and a half year period, for example.

There are various levels of cover depending on your pet, some will cover lifelong illnesses up to a certain amount, while others will just cover whether your pet has an accident. So it’s worth looking into the best type for you when you’re looking to take out pet insurance to avoid any issues further down the line.

Lifetime cover

This is the most comprehensive type of cover you can get and will cover any lifelong illnesses. You will pay premiums every year during your pet’s life, and your insurance provider will continue to cover your pet - regardless of age or existing conditions. However, it’s worth noting that not all insurance providers will cover pre-existing conditions so it’s worth checking the policy fully before you purchase it. This tends to be good if you have a pet that may be at risk of getting certain illnesses or diseases. 

Annual or time limited

With a time limited policy, you will only be covered for 12 months on a rolling basis. This type of policy will give you the chance to switch to a cheaper one each year and usually costs less than a lifetime policy. Although this will generally be less comprehensive and won’t cover pre-existing conditions. As your pet grows older, you will struggle to find insurance as there’s more risk when the pet is older. 

Accident only

This is the most basic and cheapest level of cover available, however, it will only cover the cost of your vet bills if your pet was to have an accident rather than an illness. This is good for those with pets who are low risk and just want peace of mind that they’ll be covered in an emergency. 

Maximum benefit

This is also known as ‘per condition’, and usually provides a fixed sum to treat an illness or injury for as long as the policy remains in place. 

Having pet insurance can protect you against unexpected costs, liability costs if your pet was to injure someone and indemnity if your pet passes away or gets lost. You may also have access to free vet helplines and guidance on how to help your pet live a longer and healthier life. It’s important to get your pet covered as soon as they come into your life because once they have an injury or illness, it may be more difficult to find pet insurance. Most policies don’t cover pre-existing medical conditions. Most policies also have a period where you aren't covered, so if you wait until they are ill to get insurance you won't be able to make a claim. This is usually around 14 to 28 days from the start of the policy. 

The ABI states that the average pet insurance premium was £327 in 2022, which was up from £271 in 2021 - equating to a 20% increase year on year. Although costs for pet insurance premiums are increasing, it’s worth noting that it is an important financial investment as vet bills tend to cost more than the average annual premium. The average cost of a claim for a dog in 2022 was £800 and £684 for a cat, making pet insurance a no-brainer. If a pet requires long term medical care then you can expect this number to increase significantly.

But why does pet insurance increase? Mainly it’s down to your pet ageing. As your pet gets older, they’re more prone to ailments that may require treatment and vet intervention. This increased risk is factored into the cost of your annual policy. 

Other reasons include rising inflation - just like many other household bills, inflation drives up the cost of providing insurance, which is reflected in your premiums. Vet costs are also increasing. Staff and medication shortages, medical and technological advances, increased equipment costs and rising demand has seen pet medical bills soar in recent years. As a result, insurers pass these extra costs on to policyholders as they have to pay more to cover vet bills. 

Following the pandemic, the number of those with pets increased drastically too. This increase in pet ownership means that the number of insurance claims has risen - the most recent data from the ABI suggests that claims totalled over £1 billion in 2022. This unfortunately has an impact on the prices insurance providers set.

Luckily, there are a number of options that may help pet owners reduce their pet insurance premiums. Here’s my advice on some of the ways you can save if you’re struggling to pay for your pets’ premiums, without cancelling your plan, plus some other ways to save on the cost of owning a pet: 

Sign up to a monthly vet health plan

Taking your pet to the vets can be expensive,even just for a simple check up. With regular check ups, flea and worm treatments, vaccinations and microchipping, you may struggle to cover some of the costs. This is why many owners choose to sign up to their vets Pet Health Plan. This is usually a monthly cost, which depends on the size of your dog, but can help reduce some of the costs associated with owning a pet. Many of these plans include regular medication, like vet-approved flea and worm treatment, annual vaccinations and boosters, check ups and vet consultations as well as additional discounts like free microchipping. By signing up, you’ll know exactly what you need to pay, and what you’ll be getting for your money, with no hidden costs. The vet should always let you know if the price of the plan is due to change and give you a chance to leave if you can’t afford the increase. It’s worth noting that if your pet requires treatment for Distemper, Hepatitis, Parvovirus or Leptospira (DHPL), and they aren’t vaccinated against them, some insurance providers may not pay out as this could have been prevented had the pet been vaccinated. It’s worth checking the small print in your policy to double check where they stand on this. 

Use a comparison site 

Pet insurance rises every year as your pet ages and in line with inflation, but this may make it unaffordable. If you’ve just got a new pet or it’s time to renew your policy, it’s worth using a price comparison site to compare rates from multiple providers. By using a comparison site, like ours, you can find a better and more affordable deal for you and your pet. 

However, you should bear in mind that - unlike other insurance - it can be risky to switch to a new provider, particularly if your pet has pre-existing conditions as they may not be covered by a new insurer. You may find that while it may offer savings in the short-term, you may end up paying more in the long run as it may not provide the right cover. It’s always worth double checking before you make the switch. Simply input your details and the comparison site does the rest, scouring a number of insurance companies to find the best deal for your needs. If you find one cheaper than your current provider is offering, you could always call them up first and see whether they can match it or offer you something better. 

Pay upfront rather than monthly

Choosing to pay for your premiums monthly by direct debit can make life easier by breaking the cost up into manageable chunks over the course of a year. However, insurers charge more for this option as you’re opted into a credit agreement, paying interest on top of the annual premium.

If you can, it’s worth paying for your insurance in full to get the very best deal. If you’re unable to pay upfront, you could also consider signing up for a 0% credit card and make smaller monthly payments until it’s paid off instead, to avoid the additional charges from your insurance providers.

Bundle your policies

Do you have other policies with any insurance providers for your car or home, for example? If so, it might be worth calling them up and seeing whether you could save money by bundling your insurance policies with the same provider. Some insurers, like Direct Line, offer discounts for having multiple policies with them, and it’ll make it easier when you go to contact them as all your policies will be in the same place. If you have more than one pet too it might be worth looking into multi-pet policies as it’s usually cheaper to have multiple pets insured through the same provider. 

Head to the virtual vets

If you’re worried about your pet and are thinking about heading to the vets, check whether your policy comes with a free vet video service or vet helpline first. If your pet isn’t in need of an emergency, this could help you avoid a costly trip to the vets. They can offer some help and advice on some of the most common concerns and provide help from a distance for minor injuries and illnesses. However, always remember to see a vet if you’re unsure or your pet is in need of emergency life-saving treatment. 

Check your other benefits

When you get your policy, it’s worth checking your documents to see if there are other benefits that you could be taking advantage of through your insurer. This means additional reward schemes, refer a friend schemes or cashback through certain pet-related partnerships. This could be anything from discounts or vouchers for money off their food, health care or even their toys if they have reward schemes with certain retailers. Always check your emails and policy documents or check out your insurers website to check for any other benefits that may come with your cover. 

Keep your pet healthy

While you won’t see immediate savings, keeping your pet healthy can save money in the long term as you’ll need fewer vet trips. This means regular check ups with the vet through a monthly vet plan, keeping your pet on good food and at a healthy weight, and keeping on top of preventative treatments such as flea and worm treatments and vaccinations. This will keep your dog healthy and living longer, and will reduce the risk of your pet developing any health issues. 

When getting a pet, make sure you pay particular attention to the type and breed that you’re getting, as some are more at risk of developing certain diseases and illnesses. Knowing this early on means you’ll be able to take preventative measures to help reduce the risk of them getting that particular issue when they get older. For example, some dachshunds are prone to getting intervertebral disc disease (IVDD). A common source of back pain, the severity and type of injury can vary widely, ranging from mild discomfort to complete paralysis. However, preventative measures like not letting your dog jump off furniture from height, getting ramps for sofas and beds, and carrying them up and down the stairs can prevent injury to their back. 

Things to remember 

Some insurers will pay the vet directly which means you’re not left waiting to claim money back. You’ll normally pay the excess and then the vets and your insurance provider will manage the rest between themselves, which will save you both time and money at a normally stressful time.

You should also double check your policy documents to see whether there are any exclusions or reasons why your insurer may not pay out. This will help make sure you don’t have any issues when it comes to making a claim. This could include whether any details are incorrect or haven’t been updated, if your pet isn’t up to date with their vaccinations or any other medication and if they have pre-existing conditions. 

If you’re worried about the cost of your pet insurance or think you may not be able to meet upcoming payments due to the cost of living crisis, make sure you contact your insurance provider as soon as possible. They will have specialists available to discuss your circumstances and agree a way forward to help reduce payments or make them more manageable at no extra cost. While it’s not law to have pet insurance, it’s really important for peace of mind and to help you save money in the long run on expensive vet bills. 

*1 - Association of British Insurers research, June 2023

*2 - Association of British Insurers from PDSA research compiled in 2023