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One in three pet insurance claims are declined

Research by money.co.uk finds pet owners face a £232 million bill for rejected claims as, according to our survey, one in three pet insurance claims are unsuccessful.

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  • Cat and dog owners with pet insurance could be living with a false sense of security as research1 shows that 37% of claims are rejected - far higher than car (1%), travel (13%) and home insurance (21%)2

  • Reasons cited for rejection include the policy not covering the treatment (44%), insurers claiming it was a pre-existing condition (23%), that the pet was too old (14%) and the fees and treatment costs were too high (9%)

  • Almost half (47%) of those that had their claims turned down had to use their credit card to pay. One in four had to take out a loan, over half of which (7%) turned to a payday loan

  • One in eight (12%) pet owners admitted that if they only had enough money for one policy they would spend it on pet insurance - triple those that would pay for life (4%) and health insurance (3%)

  • Over a third of pet owners (36%) have never shopped around for pet insurance. One in three (29%) thought all insurers offered the same product at the same price

Despite pet insurers paying out £1.82 million a day in claims, it seems it's just not enough to keep our pampered pooches and feline friends in good health. In fact, new research1 released today from comparison website money.co.uk, reveals that pet owners are struggling to keep up with the cost of vet's bills even when they pay for insurance.

The research, which was carried out amongst almost 1,000 dog and cat owners that have made a claim on their insurance, showed that despite one in four of the 17 million2 cat and dog owners in the UK taking out pet insurance, more than one in three (37%) claimants have been declined. With the average policy costing £2412 a year, these pet owners have been forced to pick up vets bills for rejected claims worth £232 million3.

The main reasons cited for 44% of the rejected claims was that the policy didn't cover the treatment. Just over one in five (23%) were caught short when the insurance provider said the pet had a 'pre-existing condition' and therefore rejected the claim.

A further 14% were told their pet was too old, which raises the question as to why the policy payments were still being accepted. Finally, 9% of claims were rejected because the treatment costs were too high. Many of these rejections could be borne out of the fact that 55% of those surveyed felt both policies and exclusions are not made clear enough by providers.

Amongst those consumers that had their pet insurance claims rejected, 47% opted to use their credit card to settle the vet's bill. One in four had to take out a loan, more than half of which (7%) turned to a payday lender to cover the bill.

When it comes to taking these complaints to the Financial Ombudsman Service (FOS), our research shows that just 4% of those rejected escalated their case. Of those, 3% won despite the number of pet insurance cases rising by 10%4 in the last year according to industry figures.

When it comes to finding the money to pay for insurance policies, one in eight (12%) of the dog and cat owners surveyed admitted that if they only had enough money for one policy they would spend it on pet insurance. This is three times the number that would spend their money on life insurance (4%) health insurance (3%) and travel insurance (2%).

Not only is a dog for life, so is a pet insurance policy it seems with over a third (36%) of the pet owners surveyed admitting they have never shopped around for a new insurer. A further 29% thought all providers offered the same product at the same price and one in four (24%) didn't think another company would insure their ageing pet.

Hannah Maundell, Editor in Chief at money.co.uk, comments:

"Pet insurance is no different to any other policy - they're extremely complicated beasts. It's crucial you go in with your eyes open and find out exactly what you're getting from a policy before you sign on the dotted line and tie yourself in. You must be clear when the policy will and won't pay out, which vets you can go to and when your cover will be cut off after you claim.

"Some policies are riddled with more loopholes than others so you must pick and choose carefully, really paw through the small print. Don't keep anything secret, pre-existing conditions must be declared otherwise you will invalidate your policy.

"If you're not happy with the outcome of your claim you have the right to complain and escalate your case to the Financial Ombudsman. It's a complete waste of money paying so much for pet insurance that doesn't cover the cost of treatment when you need it."

Almost two-thirds of those surveyed felt both policies and exclusions are not made clear enough by insurers; follow these top ten tips to make sure you don't get caught out. See our guide for more details;

  • Is it worth taking out pet insurance? Yes, the average pet insurance policy costs £241 a year, the average claim costs £7202 which is three times the cost of the policy

  • Pre-existing conditions are a big problem as most policies will not cover them. Those that do normally stipulate your pet must have finished treatment and be symptom-free for around two years.

  • If your pet is more than eight years old some providers will not cover them. When your pet reaches this age, some may hike premiums or ask you to co-insure, this means you have to contribute to the cost of treatment.

  • If your pet is used for commercial reasons it's unlikely they'll be covered. This includes things like security, track racing, coursing and in some cases commercial breeding (defined as more than twice in a lifetime).

  • Some insurers insist you use one of their network of vets. If the insurer feels your vet is too expensive they may ask you to use a cheaper one.

  • If your pet is registered under the Dangerous Dogs Act they may not be covered so it's important to check.

  • If your pet has not been vaccinated or had an annual health check the insurer may not honour your claim.

  • Certain breeds may be excluded from some policies such as Pit Bull Terriers, Japanese Tosa and Czechoslovakian Wolfdogs even if they're crossed with other breeds.

  • Vets bills can run into £1,000s so you must make sure you have the right level of cover. For example, it could cost around £1,201 to treat a dog with a torn knee ligament or £663 for a dog with a tumour.

  • Lifetime policies are the most expensive but can offer the most comprehensive cover for your pet. It does what it says on the tin - so if your pet develops an illness it will be covered throughout their lifetime as long as you pay your premiums. The downside is you're stuck with the same provider.

Notes to Editors: 1. Research was carried out on behalf of money.co.uk by OnePoll from the 10th - 23rd May 2016 amongst 947 cat and dog owners that have made a claim on their pet insurance. 2. ABI, March 2016 3. £232 million calculation is based on the following; * 686,000 claims were made for dogs ABI * 193,000 claims were made for cats ABI * £720 Average pay out ABI * 879,000 total claims for dogs and cats x £720 = £632,880,000 * 36.64% of our survey respondents said their claim was rejected * 36.64% of £632,880,000 = £231,887,232. 4. FOS, Annual Review 2014/15


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