Why we are sceptical about pet cover

Consumers are faced with a myriad of pet insurance options, but are they value for money? Pet insurance is increasingly big business as insurers extend dog cover to the full family menagerie, but there is growing evidence that consumers are not responding to the extended policies with great enthusiasm.

As the proud owner of Tilly, a three-year old tabby, who arrived just before Christmas, I diligently set out to research the confusing array of pet insurance policies available.

Like many other lines of insurance, pet cover is a modern invention. I had a cat as a child and my parents don't recall having to spend much on vets' bills at all. But times change and these days it's not unusual to have insurance for all aspects of modern life, such as private medical cover, a dentistry plan and insurance for your mobile phone.

I tried Allianz Cornhill's Petplan first - a relatively venerable player as it has been around since 1976.

The first potential stumbling block is that Petplan will only allow you to take out cover for a cat under 10 years old. This is not uncommon, but means some animals are excluded from insurance right away. Tilly is about three but, in common with many other pet owners, we got her from a rescue centre and we only have a vet's estimate of her age.

So, working on the basis that Tilly was born on1 January 2004, Petplan offered me three monthly premium alternatives - £7.56 (value), which provides cover of £5,000 per condition, £9.15 (budget) with cover of £4,000 of vets' bills a year, or £14.30 (super), with unlimited vets' bills.

There are a host of extra benefits available under the more expensive plans, such as boarding cattery fees and even offering a reward if your pet is missing.

So, comprehensive cover but at a considerable price. What about online?

Moneysupermarket.com suggested Argos as the cheapest at £3.99 a month, but that covers vets' fees only up to £1,000. Marks & Spencer's £5.21 monthly premium covers up to £7,000 of vets' fees.

But consumer organisations are sceptical about the benefits of pet insurance. Mintel says that more than half of all pet owners had to make an unexpected trip to the vet between 2003 and 2005, while Consumer-Reports.org calls pet insurance "a form of enforced savings that almost never covers the entire bill". It concludes that pet insurance isn't worth it for common ailments.

Of course, insurers and their affinity partners trumpet the benefits of pet insurance to the skies. Tesco says one in three cats falls ill every year and the average emergency visit to the vet would set you back £300 without insurance. And Petplan says that, on average, its customers claim more than £1m from it each week.

I'm afraid their arguments just didn't convince and I decided to forego expensive pet insurance in favour of paying £10 a month into a savings account for Tilly.

And that's a choice that plenty of consumers will be making unless the industry does a better job of selling the benefits to a sceptical public. IT

Caroline Muspratt is insurance correspondent for The Daily Telegraph