Are pet insurance claims keeping pace with customer expectations?

When your dog eats a mince pie on Christmas Day, the priority is treatment, not worrying about the cost. 

Out-of-hours emergency care is, by definition, a moment of vulnerability – limited choice, heightened emotion and little time to interrogate pricing structures.

Yet it is often at precisely these moments that pet owners discover additional charges – from emergency surcharges to administrative fees for paperwork required to support a claim.

And in the case of admin fees, they are often not found out about until after the treatment has taken place. Crucially, they are also routinely excluded from insurance cover.

While such fees are typically set by veterinary practices rather than insurers, their growing use by vets is raising questions about value, transparency and responsibility across the pet insurance ecosystem – particularly under the Consumer Duty, which requires insurers to deliver good outcomes for customers even where third parties are involved.

Admin fees increasingly common

According to Sharon Brown, founder and chief executive at the Pet and Equine Insurance Association, administrative fees linked to insurance claims are becoming more widespread.

“They’re increasingly common, particularly for processing a direct claim, providing claim history, notes or verification admin, supplying copies of clinical records and out-of-hours handling,” she said.

“Anecdotally, there does seem to have been an uptick in both the frequency and visibility of these fees over the last couple of years, alongside wider pressure on practice economics and the move towards more standardised charging structures.”

While the fees themselves may be modest in isolation, Brown argued that they often reflect deeper process issues rather than deliberate revenue generation.

“Admin fees are often a symptom of process friction. Reduce friction, and you reduce the rationale for fees,” she added.

Consumer Duty and third-party outcomes

Under the Consumer Duty, insurers remain responsible for customer outcomes even when services are delivered by third parties. That principle, Brown argues, requires a broader interpretation than simple contractual responsibility.

“In my view, insurers should interpret this as: you can’t outsource the customer outcome,” she said.

“Even if a third party sets a fee, insurers can still influence outcomes through product design, claims pathways, transparency and proactive customer guidance.”

That includes clearer communication at the point of sale and claim, designing claims journeys that minimise unnecessary paperwork and engagement with veterinary groups to reduce avoidable friction.

“Clearly, Consumer Duty can’t be used to control third-party pricing,” Brown said.

“But it does raise the bar on what insurers should do to anticipate foreseeable harm across the end-to-end journey and reduce friction that can lead to additional charges or poor customer experience.”

Fair value vs perceived value

Whether non-covered admin fees pose a fair value issue is less clear-cut, but Brown suggested that perception matters just as much as policy wording.

“Even if the fee sits outside the policy, it becomes part of the customer’s lived experience of the value of pet insurance,” she said.

“If a customer believes they have covered care and then discovers meaningful extra charges at the point of need, that can undermine perceived value and trust.”

This disconnect between technical compliance and customer experience carries reputational risk too.

“Customers don’t separate vet costs and insurer outcomes – they experience one joined-up journey,” Brown warned.

“If the overall journey feels unfair, confusing or stressful, the insurer brand gets associated with that experience, even when the insurer didn’t set the fee.

“This is exactly the kind of ‘its technically compliant but doesn’t feel right’ gap that can erode confidence in the sector.”

From an insurer standpoint, administrative fees sit firmly outside their direct control. Hannah Simpson, chief product officer at Waggel, said such fees were “not universal, but they are increasingly common, particularly among larger or corporately owned practices”.

“Where fees are charged, we typically see them ranging from £20–£35, though in some cases, particularly where practices apply multiple charges or out-of-hours premiums, costs can be much higher,” she said.

“Importantly, these fees are not set by the insurance provider, so they can vary significantly from practice to practice.”

Simpson explained that admin fees are routinely excluded from cover because they are non-clinical, unpredictable and difficult to model.

“Premiums are based on assessing and pooling clinical risk,” she explained.

“Admin fees are difficult to predict or model against and including them without sufficient oversight could lead to rising premiums that do not necessarily improve customer outcomes or represent fair value.”

That said, she acknowledged the customer impact when fees emerge unexpectedly: “Admin fees can lead to poor outcomes when customers are unaware the fee will apply, or the fee appears after treatment, leaving the customer feeling they had no real choice, or customers assume the fee will be covered by insurance.”

The Royal College of Veterinary Surgeons (RCVS), the regulatory body that oversees veterinary practices, does not monitor admin fees and leaves pricing decisions to individual practices, but its guidance emphasises transparency.

Admin charges should be “clearly shown and itemised” and likely costs should be discussed early, even in urgent situations, provided treatment is not delayed.

RCVS guidance also states that “the existence of animal insurance is no excuse for charging inflated fees” and that administrative charges should be shown separately in the interests of transparency.

Claims friction under pressure

Complaints data suggests that claims experience is already a pressure point for the sector.

Analysis of FCA complaints data by Insurance DataLab shows that since 2017, almost £75m has been paid out in redress by pet insurers.

Further analysis by the market intelligence firm found that complaints referred to the Financial Ombudsman Service have risen sharply since 2022, reaching 532 cases in Q3 2025, with more than 67% relating to the claims process.

In the same quarter, 42% of cases were upheld in favour of the customer.

While this data does not attribute complaints to admin fees specifically, it highlights how sensitive claims interactions have become – particularly when costs, expectations and communication misalign.

Meanwhile, Simpson noted that rising treatment costs are a systemic issue for the insurance industry.

She said: “We’ve seen average invoice costs rise up to 8% year-on-year, driven by advances in clinical care, specialist treatments, diagnostics and changes in practice ownership models,” she says.

Reconciling those costs with affordable, predictable premiums remains “one of the biggest structural challenges facing pet insurance today.”

What changes next?

Both insurers and industry bodies point towards process reform rather than price-setting. Brown argued that “the system needs to be designed for that moment” when an animal is unwell, while Simpson highlighted tools such as digital claims, clearer communications and veterinary triage services to reduce unnecessary escalation.

Longer term, Consumer Duty is likely to drive closer engagement between insurers and veterinary practices.

As Brown put it: “Insurers will need to evidence they are actively managing foreseeable points of customer harm across the end-to-end journey, even where third parties are involved.”

In a market where emotions run high and expectations are evolving, the challenge may be less about who sets which fee – and more about whether the overall experience still feels fair when it matters most.