COMMENT
Best Buy Pet Insurance Policies

By Alison Hunt (TMFAlly)
December 7, 2005

Insurance policies are usually straightforward beasts. If you have dependents you should really have a life insurance policy, travel cover is a must-have when journeying abroad and don't even consider driving a car without adequate motor insurance. However, when it comes to policies such as those covering our pets, you'll find there's a mixed reaction.

There's no doubt it can be insurance well worth having - after all, who knows what could happen. You always hear of horror stories involving accidents and hundreds of pounds of vet bills to be paid. However, there are also a number of people who believe pet insurance is a waste of money and that you'd be better off self-insuring by putting aside a small sum of money each month instead.

One of the contributing factors may be the fact that pet policies are a nightmare to follow. Seemingly, no two policies are the same, resulting in them being impossible to compare. In fact, financial research company Defaqto has called them a "minefield for the uninitiated" and stated that they are possibly the most complex insurance product that most people will purchase.

One of the main problems is the way insurers pay out. Some pay up to a total amount, on a per year or per condition basis, with some also limiting the time a single claim will be paid for to 12 months. Other insurers simply pay for a single claim with no time limit.

In fact, the market is split in the following way:

Policy Type	% of Policies
Per Year, no time limit	20%
Per condition, no time limit	25%
Per condition, 12 month limit	55%

As a result, Defaqto believes that all providers should work together to produce some form of standardisation in the descriptions used in pet insurance policies.

Defaqto states that policies, which have no time limit on how long single claims will be paid for, but limit the value of claims in a year, offer good cover with the drawback of tending to be expensive. Policies which base claims on the "per condition" cost but have no time limit on how long the payout lasts also offer good cover, but only where the condition limit is high at £5,000 or more.

However, the majority of policies which set a 12-month time limit on payouts offer poorer levels of cover in comparison with the first two types, as in many cases, the 12-month period will end before the sum insured per condition is exhausted.

From its findings, Defaqto has thus come up with its top ten policies offering the best cover for both dogs and cats:

Best Insurance Policies for Cats and Dogs as rated by Defaqto (in alphabetical order).

Provider	Product
Halifax	Pet Insurance Extra
Halifax	Pet Insurance
Insure & Co	Gold
Marks & Spencer	Pet Insurance
MRL Insurance Direct	Petwise Gold
PAWS Pet Insurance	PAWS Plus
PDSA	Petsurance 5000
Pet Protect	Lifelong Extra protection
PetWise Health Insurance	Gold
Sainsbury's Bank	Petcare

Source: Defaqto's Pet Insurance in the UK, 2005

And for cats only, the best policy was the PDSA Petsurance 2000 product.

Pet insurance certainly is a minefield and as a result many of us will choose to shy away from it. However, if you would prefer the peace of mind, choosing one of Defaqto's recommendations could at least ensure your pet has a decent level of cover.

Find out more in our Insurance Centre.