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What is pet insurance and what does it cover?
What is pet insurance and what does it cover?
Written by
Tina Sendin
Edited by
Andrew Kemp
Reviewed by
Adrian Bennett
Long story short
Pet insurance is a financial safety net against unexpected vet bills
It could help cover a portion of eligible vet bills arising from accidents, injuries or illnesses.
The cost of pet ownership in Australia can add up
On average, Aussies spend somewhere from around $475 to over $2,500 a year for their pets, depending on the type and needs.
Many Aussie pet owners are feeling the pinch of rising costs of living
Over 10% of pet-owning households in Australia required financial assistance to cover veterinary care. A little over 20% of cat owners and 30% of dog owners make fewer trips to the vet due to cost.
Depending on the policy, pet insurance typically covers accidental injuries and illnesses
More comprehensive policies also offer options for routine care.
What is pet insurance?
Pet insurance is a financial safety net that can help cover unexpected vet expenses when your cat or dog gets sick or injured. Depending on the policy and provider, pet insurance might cover a significant portion of an eligible vet bill, with some policies covering 90–100% of the costs.
Our pets are much-loved members of our families, but it’s no secret that the cost of pet ownership can quickly add up. In fact, you might be looking at anywhere from around $475 to over $2,500 a year on average, depending on the type of pet and their needs.1Animal Medicines Australia – Pets in Australia: A national survey of pets and people.
And with vet expenses being one of the highest costs of owning a four-legged friend, pet insurance could help cut down unexpected costs and help you enjoy pet parenthood (furenthood, anybody?).
How does pet insurance work?
Pet insurance works just like health insurance for humans – you pay pet insurance premiums and, in return, the insurance company covers a portion of eligible veterinary costs, say for accidental injuries and illnesses. The amount that the insurer pays depends on your policy’s level of cover, annual cover limit and benefit percentage.
Let’s break down how pet insurance works:
Premiums
Premiums are what you pay – either monthly or annually – to keep your policy active. The size of your premium will depend on your pet’s age, location, species, health conditions and breed. Your premiums could also be based on pets that are similar to yours – specifically, the cost of their care and claims made by customers with the same breed.
To determine your pet insurance premiums, your insurer may also look at a few other factors, like:
- any discounts that might apply
- commissions your insurer pays to intermediaries
- government charges, taxes or levies
- how often you pay – whether annually or by instalments.
Level of cover
Your pet’s cover will depend on the level or tier of your policy– for example, basic, mid-range or top-level options. These levels affect how much your insurer will reimburse (benefit percentage) and the limits that are applicable to your claims (annual benefit limit).
It’s worth noting that pet insurance can also vary by type of cover – think accident-only, accident and illness, or more comprehensive policies that offer optional extras like routine care.
What are the different types of pet insurance?
Pet insurance typically comes in the form of accident-only, accident and illness, and comprehensive policies, which usually include optional add-ons such as routine care. Each type offers different cover options that will suit some healthcare needs and budgets more than others.
Let’s dive into each type of pet insurance to help you find out which one suits your fur baby:
Accident-only insurance
Accident-only is the most basic type of pet insurance.
It’s there to help with vet bills if your pet has an accident (like your sprightly Labrador breaking a bone after a zoomie at the park). But as the name suggests, accident-only cover doesn’t provide cove for any illnesses or diseases.
Accident and illness insurance
Accident and illness cover can provide a broader safety net for your pet, as it covers both accidents and unexpected illnesses.
Accident and illness cover could have your fur baby’s (and wallet’s) back when dealing with common illnesses like ear infections and skin conditions, as well as diabetes and cancer.If you’re reading this and you’ve never dropped your phone down the toilet, you deserve some kind of prize. Okay, maybe the prize is not having to get your phone repaired. Unfortunately, there’s no set price for water damage repair as it will depend on what exactly is damaged and whether that part can be replaced. At the very least, water damage will likely require a technician to take apart your phone and examine the components.
Comprehensive insurance
Comprehensive insurance is the highest level of coverage, providing holistic protection for your furry mate.
It’s got you covered for accidents, illnesses and even some routine stuff like vaccinations and worming. It’s great if you want to make sure your pet is covered from nose to tail.
If you continuously pay the premium and maintain coverage every year, then it’s great for getting those chronic and recurring conditions (like arthritis) covered – especially as your pet gets older.
Optional add-ons
Optional add-ons for routine or preventative care are usually offered in higher tier coverage and, depending on the insurer, can could be added to accident and illness or comprehensive pet insurance policies.
These add-ons usually take care of the predictable, everyday needs of your fur baby – things like pet health checks, vaccinations, dental checkups as well as flea, tick and worming treatments. It could even include complementary therapy like acupuncture for your pet (yes, you read that right!).
Helpful tip
If you’re the only one looking after your pet, you might worry about what would happen to them if you temporarily couldn’t care for them. Some pet insurance policies include emergency pet boarding if you’re the sole carer and are unexpectedly hospitalised or need emergency accommodation due to a house fire. That means you could get help with the cost of boarding your pet at a registered kennel or cattery, up to an agreed amount.
Adrian Bennett
General Manager for General Insurance
What does pet insurance typically cover?
Pet insurance typically covers eligible vet costs for unexpected accidents, injuries and illnesses – although it depends on the type of policy you choose (whether it’s accident-only or the more comprehensive ones that include illnesses, and even routine care).
The following are some of the most common pet insurance policy inclusions:Waiting periods also allow insurance underwriters to have some sort of baseline in determining whether a condition developed through time while the policy’s active, or if it’s an underlying issue.
Accidental injury cover
- Motor vehicle incidents
- Burns or electrocution
- Allergic reactions to insect or arachnid bites
- Bone fractures
- Ligament and tendon injuries
- Bite and fight wounds
Illness cover
- Heat stroke
- Intervertebral disc disease (IVDD)
- Soft tissue injury
- Gastrointestinal problems
- Heat stroke
- Tick paralysis
Your policy may also include cover for pet hospitalisation, vaccinations and council registration fees, depending on your insurer. Some comprehensive policies also offer optional benefits, such as cover for routine care.
Does pet insurance cover dental?
Pet insurance can cover dental, though it depends on the level of dental care and treatments. Basic levels usually include cover for accidental tooth damage (say, broken teeth from running into a fence), while more comprehensive policies generally also cover some dental illnesses (like gingivitis or periodontal disease) and often give you the option to add-on extra cover for routine dental care.
Dental cover can vary based on the level of cover:
- Accident-only pet insurance generally only covers accidental damage to your pet’s teeth and doesn’t include dental care and treatments.
- Accident and illness or comprehensive pet insurance could cover accidental damage to your pet’s teeth and treatment of dental illnesses.
- Optional dental add-ons might cover routine care, like dental check-ups and cleans.
It’s always a good idea to consult the policy’s Product Disclosure Statement (PDS) to find out whether it offers such cover, while also getting to grips with things like waiting periods or exclusions.
What is typically excluded from pet insurance cover?
Pet insurance typically excludes conditions that were there before you took out your policy or appeared during the waiting period. It also excludes non-essential procedures, pregnancy and breeding, as well as routine care and alternative therapies if you haven’t taken these as optional add-ons. And depending on the policy, there may be certain ages your insurer may not cover.
Common pet insurance exclusions may include:
- pre-existing conditions that your pet experienced before your pet insurance policy commenced (or during the waiting period)
- elective procedures
- pregnancy
- grooming
- desexing if considered an elective procedure
- food and diet products and services.
Some policies may also not cover pets younger than 8 weeks or older than 9 years at the time you apply. However, this restriction may vary by insurer.
Is pet insurance worth it?
Pet insurance is worth it for those that want to avoid or significantly reduce an unexpected vet bill from sudden illnesses or accidents and lifelong chronic conditions. For context, 12% of pet-owning households in Australia required financial assistance to cover veterinary care between April 2024 and March 2025. At the same time, 22% of cat owners and 30% of dog owners admitted to less frequent trips to the vet primarily because they couldn’t afford it.2Animal Medicines Australia – Pets in Australia: A national survey of pets and people. So, paying regular premiums can take the sting out of dealing with unforeseen vet bills that cost a few thousand dollars.
At the end of the day, we love to pamper our pets. But things can still go wrong even if you’re the most careful pet owner. When you least expect it, your dog or cat could accidentally break a bone or become sick after eating something they shouldn’t. Pet insurance is well worth it for when these scenarios throw a spanner in the works.
And while only you can decide whether pet insurance is worth it for you and your pet pal – here are some things that might help when chewing over the decision:
Does your pet have pre-existing conditions?
What’s your pet’s age and breed?
How much money have you set aside for unexpected vet bills? Are you able to self-insure?
Could you afford an unexpected pet emergency without a financial safety net?
Would you be comfortable dipping into your savings?
What should I consider when comparing pet insurance?
When comparing policies, consider details like annual benefit limits, benefit percentages, excess, waiting periods, pre-existing conditions and the claims process. These could be found in your Product Disclosure Statement.
We get it – there can be a lot of information to absorb when researching a policy, especially when looking for the a good balance between the cost of pet insurance and your pet’s needs. And with each insurer differing in benefits, costs and features, comparing policies is so important. With that in mind here’s a quick list of key features to keep in mind:
Annual limits
Your pet insurance typically caps the total amount they’ll pay in a year – which is the annual benefit limit. Viewed another way, this is how much you can claim every year, and upon reaching the limit, you’d have to pay vet costs out of pocket.
Depending on the policy or insurer, the limit may be based on whether the policy has basic or comprehensive coverage – with the latter having higher limits than the former.
It might also be worth looking at the sub-limits (or caps that apply to certain conditions) and what each policy might look like.
Benefit percentage
Benefit percentage is how much your insurer reimburses you for eligible vet services and treatment costs. Depending on your policy and level of cover, this is typically around 60–90% – sometimes even 100%. That means you might need to pay the gap, or the balance of your vet’s bill that isn’t reimbursed by the insurer.
Claims process
While the claims process may vary based on the insurer, many would require you to pay the vet directly before making a pet insurance claim. Then, if your claim is approved, you can be reimbursed for a portion of the expenses, helping to cover the costs of your pet’s treatment.
There are also vets who let you claim on the spot. But you need to let them know you’d prefer them to submit a GapOnly claim for you, and you’ll only need to pay the gap after your claim’s been assessed (often in a matter of minutes).
Waiting periods
If it’s your first time taking out a policy for your pet, there’s usually an initial waiting period during which you can’t make a claim. For instance, accidental injuries might have a 2-day waiting period, while cruciate ligament conditions are 6 months.
Any illness, injury or symptom that occurs during the waiting periods is considered a pre-existing condition and usually won’t be covered. The good news is you won’t have to serve waiting periods after renewing your policy.
Excess
Excess is the amount you need to pay if you make a claim for your pet.
You might need to pay an excess for each condition, but it’s always worth checking the Product Disclosure Statement to see how excess works for your policy.
iSelect does not offer a comparison service for Pet insurance policies at this time.
Any advice provided by iSelect on this website is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any policy. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect.