Insurance worth considering to limit eye-watering vet's bills, but it is advisable to read the fine print first

Pets are expensive beasts. They can cost hundreds of dollars to feed and house for the year. Even my humble guinea pigs are bought packaged food, regular treatments of Revolution to keep the mites at bay and bales of hay to line their cage.

The cost of owning animals isn't something many people think about before taking them on. Many animals get handed into the SPCA or, even worse, euthanised because their owners can't afford to pay vet bills.

Sometimes the owners get an unexpected household bill and realise pet costs are throwing the family budget out of balance, says Bob Kerridge, the SPCA's executive director. It's sad because often these are the very people who might benefit most from owning a pet that doesn't judge them for being poor.

Pet food costs money. The expense doesn't end there, however. Dogs need to be registered. My cat needs regular expensive branded flea treatments because he has a flea allergy. Forget those and it's a $100 injection to stop him scratching himself raw.


The really big cost for most pet owners is veterinary treatment. The Companion Animal Council says in one year 85 per cent of dog owners and 67 per cent of cat owners took their animals to the vet.

There isn't a free health service to pick up the bill when our pet falls ill or has an accident, says Phil Devlin, financial services general manager at The Warehouse, which sells pet insurance. Fixing up a cat after a car accident can be just as complex as operating on a human in the same circumstances. The difference is that owners have to pay the full cost of their pets' care.

I still cringe when I remember a case study I wrote years ago of a family pet that had a hot oil-filled fondue pot accidentally tipped on it at the table. The vet bills were about $15,000. The family couldn't have afforded to pay the bill without insurance, they told me.

Even a simple wound can be eye-wateringly expensive. My cat decided to get in a fight on Boxing Day one year and the bill for a consultation, injections and two stitches at the after-hours vet was $450. That was a real eye-opener to the cost of treating animals. It made me pick up the pet insurance brochures and take them home.

Pets may be expensive. But they're part of our families. The Companion Animal Council says that 68 per cent of New Zealand households own a pet. There are about five million companion animals in New Zealand, outnumbering humans. That includes more than 1.5 million fish and half a million birds.

When I wrote a few years ago - slightly tongue in cheek - that pets might be a waste of money, readers pounced. Their pets were better value for money than children, some argued. Others just seemed to think I should be lynched for the mere suggestion - even though I pointed out mine was a serial pet-owning family.

The facts are that the average cat-owning household spends $838 a year looking after its feline and the average dog-owning household $1571.

There is a point where the costs of pets do get out of hand. Pet grooming is one of those tipping points for me and premium brand food is another. Only 6 per cent of cat food sales are for budget products.

The Companion Animal Council found that pet food sales - and in particular premium pet food sales - suffered less than many other fast-moving consumer goods categories during the recession. Pet food is one of the most emotive supermarket purchases outside baby care. People are more emotive about what they feed their pets than their school-aged children.

Again, readers were horrified when I admitted that I feed our moggy Budget/Homebrand/Pams pet food, not Hills Science Diet, which I guess costs twice the price. None complained, however, when I admitted in the same article that I feed Budget/Homebrand/Pams pasta and other food to the human members of my family.

There is a valid argument that pet ownership has beneficial effects on an individual's budget. The affection that pets give their owners can help improve their owners' mental health. Dogs in particular are social enablers helping owners to interact with others. And dogs need walking, which helps keep the owner physically fit.

The Companion Animal Council survey found that more than half of cat and dog owners and a quarter of bird owners cite companionship as their main reason for having an animal.

A worrying statistic is that less than 10 per cent of owners have pet insurance. On the one hand there is the premium cost, but on the other, can you afford not to be insured?

Pet-n-Sur pays some very large claims every year. One of last year's most expensive claims was $17,885.33 of vet treatment for Gus, a 15-month-old labrador that got septic peritonitis after eating a stick that perforated his innards. Gus had two laparotomies, spent 10 days in a pet hospital and required IV fluids and frozen plasma to raise protein levels. Without insurance would Gus's owners have paid to fix him, or would they have had him put down?

Another dog insured with Pet-n-Sur cost $18,000 to be treated for cancer last year. It died even though the owners did the best they could for their pet. An interesting point to note is that the excess on Pet-n-Sur policies is a percentage of the claim, rather than a fixed sum - although there is a minimum. That means the more Pet-n-Sur pays to keep an animal alive or fix it up the greater the excess. So there is an incentive for owners to say enough is enough.

There are three main pet insurance companies: Pet-n-Sur, PetPlan (also sold as Warehouse PetPlan) and Ellenco, which is owned by Southern Cross. As with human health insurance there is a range of policies. At the cheapest end are surgery-only policies. Then there are more comprehensive policies with higher limits and covering more procedures.

Dogs are more expensive to insure than cats and you may pay more or have a greater excess for "select breeds" of cats and dogs. It's difficult to compare policies. The cover offered and policy wordings vary more than house or car insurance policies. I've read every policy and couldn't decide which I preferred. I would avoid surgery-only cover.

Yet Pet-n-Sur business analyst Mike McDade has a point that something is better than nothing. "There are people who prefer to pay $9 a month and at least know they can get up to $3000 cover [if their animal needs surgery]."

The SPCA recommends the Pet-n-Sur Pet Protection Plan, which costs $20.95 a month for cats and $27 for dogs. Whichever policy you choose it's worth reading the exclusions, which can make a long list, including cataract operations, heartworm, feline Aids, pacemaker implants and congenital conditions.

Some policies don't cover pets over a certain age or premium and excesses are hiked for older animals. Others have time limits on cover, only paying ongoing costs for up to 12 months. It's worth insuring pets before they get old and sick, says Devlin. Most policies exclude pre-existing conditions.