Dog Pod Episode #12

Pet Insurance – the Good, the Bad and the Ugly

Dog Cloud CEO Scott Groves interview Award-Winning VET, Dr. Kevin Cruickshank again, and this time they chat everything to do with pet insurance. 

Is it worth it? What are the potential costs of not having it?

Learn from expert VET, Dr.Kevin Cruickshank as he explains…

– What to look for in Pet Insurance for Your Dog
– Should you have an excess or not?
– How gaps work?
– Can you insure rescue dogs?
– How waiting periods work?
– Pre-existing conditions and are they covered or not?
– Should you change policies and shop around across your dog’s life?

Learn all this and more on this podcast episode on Pet Insurance.

Full Dog Pod Transcript : Episode 12

Scott: Well, hello and welcome to another episode of Dog Pod brought to you by Dog Cloud. We are sitting here with our infamous, you are going to be infamous by the time you have done twenty of these episodes, Kevin [inaudible], Dr. Kevin Cruickshank from Gold Coast Vet Surgery. Welcome back.

Dr. Kevin Cruickshank: Thanks very much, Scott, but more out of breath today after I run.

Scott: Yes. We were hanging out near Nerang State Forest and —

Kevin: Yes. Nerang State Forest.

Scott: A bit of road noise in the background, but it is a nice morning here on the Gold Coast. This week, well, this time, this episode we thought we talked about pet insurance. It is one we spoke about a little briefly that we might cover last time. I know you are a wealth of knowledge on this and a lot of new puppies during the COVID-19 sort of era. Probably —

Kevin: I am certainly very passionate about pet insurance. The last thing I want to be is an insurance salesman, but the reason that I am so passionate about it is, that is the hardest part of our job. I really do not enjoy giving people a vet bill. And if we can take — Yes. It might be hard to believe but it is really true. I wish I could just do all our work for nothing. But if we can take the financial worry away from people, they can then be much more focused just on the medical concerns and finding the best options and treatment for their pet, rather than having to have an overriding consideration. “Yes, that is lovely, but how much is it going to cost?” When the insurance company is paying, then they can really focus more on what is best for their pets.

So yes, we know vet practices sell pet insurance directly and we do get a lot of questions about it. I suppose also that just the general, sort of, disclaimer that anything we talking about today is just general advice and not specific to any particular products. I have no links or affiliations with any particular products, but I will give you my honest opinion and talk about the good, the bad, and the ugly of pet insurance.

Scott: Yes. Well, I feel like a real newbie to pet insurance because my previous dog, that was gone about five, six years ago, it just felt like pet insurance was not, maybe it was around then, but I was not really aware of it. How long has it been around?

Kevin: It was around a good twenty, twenty-five-plus years in various different forms. But well-established, probably, in the last ten to fifteen years, it is become a lot more commonplace. And even the last five years, much more available. There have been some very proactive insurance companies that have made their products much more usable, more cost-effective in that, as well. So, there is a far greater awareness, definitely, in the last five years about pet insurance.

There has been quite an explosion of different products that are available and that makes it extremely confusing for people. “What do we choose? Where do we go? What is the difference between these different ones?” And in the Australian situation, you will see that a lot of them start to look extremely similar and familiar, in terms of their terms and conditions, all look exactly the same. And you can even notice that the contact address for sending in details in is actually the same. There is one big provider that then is marketed in a various different brands and that is a company called PetSure. They do not make any secret that underwritten all by the same company, which is Highlights. But the actual individual brands do vary slightly certainly in what they cost and then various limits on that sort of thing. And I think that is what will be helpful for people if we just talk through what to look for when you are getting quotes. Because like any shopping, I really recommend people get three or four quotes these days. It is very easy, it is online and see what meets your needs.

Scott: As we get into it, I thought those two things might be really good to chat about on is, one is how it looks, the upfront, the waiting periods all that sort of stuff, how much do you get back? But the second thing I think that might be good, and then I can just let you run with this, is when something actually happens to your dog and you bring them in to a vet, what is the process to claim? I thought that might be another good part —

Kevin: Absolutely. That is a very good way to also look for in choosing your pet insurance in terms of how they handle claims, how much are you expecting to be out of pocket when it comes to a claim, as well? Also, I think there is quite a big, right at the beginning, there are different styles of policy. So, there is actually one style that I recommend– It is better than nothing at all, but I really recommend people stay away.

We see a lot of people thinking that they well covered and insured and in the meantime, it is a very limited cover. And that is a type, style of policy called “Accident Only”. To the uninitiated, that seems, “Well, I really just want to be insured for those big, unexpected accidents. My dog breaks its leg, that sort of thing, and have that covered”. So, all accidents, really. But what an insurance company defines as an accident and what you and I understand in the English term of that is quite different. These Accident Only policies cover only a certain set of defined, and for most of them, it is just six defined conditions. So for example, they will cover a broken leg, but they would not cover a sprained or twisted joint. So, if the dog jumps off the sofa and really hurts its leg but it has not broken it, you might still have a lot of expense of x-rays, maybe being in a cast or anything like that, but it would not be covered simply because it was not actually defined as a break.

Scott: First catch.

Kevin: So, they are very cheap and that is the type of thing, also. If something looks too, you know, they are not a con.

Scott: No. You get what you pay for, right?

Kevin: Yes. You got very, very limited cover. The other type of thing that people often confuse with insurance, and I would really like to distinguish between that is, some of the big veterinary chains in the corporate groups offer things that are called Wellness Plans. But it is often presented very similar as an equivalent to pet insurance and it really is not that. So, these would be things like a program called Best for Pet or Healthy Pets Plus, which is offered by some of the national corporate chains of vet practices. It is a subscription service and, basically, you can get a blood test once a year, and then they will offer some discounts on treatments or free consultations. But it is definitely not a substitute for pet insurance. You are restricted to only using those clinics. So for example, if your pet is, in quite a severe way, it needs to be referred to a specialist centre, those special centres normally are not part of the same chain, and so then, you do not get any discounts on that treatment. Whereas true pet insurance, you are free to go to any vet practice, go to any specialists and your stool will also be covered.

Coming on to what you are asking about at the claiming time, and that is a very important consideration in choosing your policies between the different styles. And fundamentally, there is either you have a fixed excess and all the rest is a hundred percent reimbursed, or, and probably, the more common form is that you are out of pocket a fixed percentage. So, they will cover eighty percent of the cost, so you will be out of pocket twenty percent. That is the most common scenario.

Scott: So, one-thousand-dollar bill will cost you two hundred bucks?

Kevin: That is right.

Scott: And there would be no excess on that? Because the twenty percent is the excess.

Kevin: Correct. So, those policies are often a little bit cheaper. I am going to use some brand names so that it is familiar to people. There is only one company that is offering the fixed excess and that is the company called Petplan. It can be really advantageous because that fixed excess is not per time you go to the vet, it is per problem. So, if you have to go, you go in there unwell, they give you some medication. A day or two later, still not well. So, you have some blood tests, and then you back another few days later for x-rays. You still are only out of pocket a hundred and fifty dollars, no matter how big your bill gets. And even if you referred to another practice, like a specialist hospital, if it is still the same condition, that has still only cost you a hundred and fifty dollars. So, you might have a five-thousand-dollar surgery bill, and it has cost you a hundred and fifty dollars. With the eighty-twenty percent, that five-thousand-dollar bill is still cost you a thousand.

But the Petplan policies are a fair bit more — That is one of the reasons for that. And what people do not necessarily notice in the small print is that at a certain age, and that does differ for different breeds, for most breeds that is at eight years of age, they change over to, as well as charging the hundred-and-fifty-dollar fixed excess, and that is for dogs. It is a slightly lower excess for cats. They change over to also doing the eighty percent-twenty percent.

Scott: Once they hit [inaudible].

Kevin: At eight years of age. And then at ten years of age, they actually change to thirty-five percent-sixty-five percent. They cover sixty-five percent. And if you have been used to, for eight or ten years, getting a hundred percent back, that can be a bit of a nasty surprise because often, a lot of the things, medical problems start to go wrong when dogs and cats get older.

Scott: Are aging. Yes, of course.

Kevin: So, you may way up that, even though you are going to pay a little bit, have a bit more out of pocket with eighty percent-twenty percent, that is going to be compensated by the lower premiums you are paying every month. And the fact that when they get much older, you are going to be on eighty percent-twenty percent anyway.

Another fundamental thing, and this actually causes a lot of confusion when people are looking at pet insurance, is the idea of waiting periods, or what is called also pre-existing conditions. So, in a lot of human private health insurance, if you serve a long waiting period, and that might be a year, it might be eighteen months, then those conditions are covered. With pet insurance, most pre-existing conditions never become covered. So, if your dog has had an eye problem, then eye problems for that particular eye will never be covered by an insurance company.

So, that is quite relevant, as well, that lots of other styles of insurance, it is recommended every year or two, maybe get a quote and consider changing it, you might save a bit getting good deals. With pet insurance, be very, very careful about changing companies once you are established. You can do it, but anything that is covered by your current company will not be covered by the new company. I guess, it is similar to having had an accident in your car and then going and asking if an insurance company will now, “If I take up comprehensive insurance with you, will you repair my car?” And they never will, because that damage or the illness was there before you took up the insurance.

And that is why I am so strong in recommending to new puppies to take out pet insurance because they have got a clean slate. There are no marks against them. Everything will be covered. It is, probably, the area that causes the most dissatisfaction with pet insurance is pre-existing conditions leading to something not being covered because they are very, very broad. If your dog has just had some limping on its back leg before you took up the insurance, then, even if it is a very specific thing that genuinely happens much later after you have got the insurance, because there was a vague question over a limp on that leg, they will not cover any condition related to that even years later.

Scott: What about stuff like diarrhoea and stomach upsets? Like, we had this with Luna the other week, young puppy, and we bought it to see you, and tummy was not good [inaudible]. She was not really vomiting or anything, but antibiotics, and it goes on her history and —

Kevin: [Inaudible].

Scott: And then, what happens?

Kevin: So then, certainly at the very beginning of any insurance, it would be very unlikely, in the first year or perhaps even the first two, that they would cover anything to do with diarrhoea. Some of the companies will, after a period of time, say, she is gone three or five years and not had any recurring diarrhoea problems. And then, you did have some diarrhoea, that is very, very clearly unrelated. It was a little bug that she had when she was a puppy. They will review those exclusions, but it is not a guarantee. And it is only certain conditions that they will review.

Scott: We got a truck rolling in here, just to make our life fun. I just thought about, with pre-existing conditions. A lot of people, during COVID especially, fantastically took up rescue dogs. And rescue dogs have normally got a little bit more age on their side. They might be one or two years old or even older. Where does the pet insurance company stand with that? Because we want to encourage people to —

Kevin: They will still, definitely, insure them, and that is just a risk. If they cannot establish a history then, there is nothing that they can preclude. But very often those rescue dogs have had a vet check before they get re-homed. And so something may have been picked up then. So, the insurance companies do get the medical notes from any vet that has treated the pet before, when they are assessing a claim, and look through that. The good thing is that the majority of them are actually not out there trying to duck and dive.

I do not have any particular insurance company that I would recommend to steer clear because they are really difficult about claims. Obviously, that is the perception that people often have. But some of the new policies, they really seem to have the approach of how can we pay this claim rather than how can we get out of it? Yeah. If there has been a genuine misunderstanding about something, they have misinterpreted a claim, very often there is always a review process you can ask to be reviewed. And you can ask your vet, sometimes, even to just write a letter of clarification or explanation to query things. They do listen to feedback and take that on board. But as I said at the beginning, rather have no pre-existing issues on by taking up pet insurance very early on in getting a puppy because then there is no room to argue, everything would be covered.

Scott: Yes. Make sense. This must have created a ton of extra work for you as a vet over the years. I would imagine with —

Kevin: It certainly does. Yes. We have to be very diligent and accurate with our record-keeping because part of your insurance policy is that you give the insurance company the right to request medical notes because they need those to settle claims. So, we do have to send those in very frequently. Technology is on our side, fortunately. Some of them really have now streamlined claims processes. We can integrate from our particular practice management software that at the time of you paying the bill, we actually send in what is called an E-claim, and that sends the tax invoice and the relevant medical notes directly to the pet insurance company. And normally, within three business days of receiving that electronically from us, the client has actually been reimbursed back into their bank accounts. So, it is very good in that regard.

Not all of the insurance companies are on any E-claims process. So, definitely, ask that question because it — Some of them now offer something called GapOnly, which is coming back to that eighty percent-twenty percent. They will assess your claim in real-time, at the closest that we can get to the high cap system, which in Australia is a system where you have got private health similar to an EFTPOS terminal or a credit card terminal, you get your claim paid immediately to the provider.

So, what happens with this GapOnly is that the claim is assessed while you wait at the vet counter. It takes about ten minutes, and then that will come back through our payment software and say, “Yes, the insurance company is paying two hundred dollars. You have forty dollars out of pocket you need to pay.” And you only pay the Gap and they pay the rest directly to the vet practice. It can be very, very helpful if you have suddenly got a two-thousand-dollar vet bill. And that can even be processed just before you ready to collect your dog. So, there is not even a waiting around. So, asking if your pet insurance offers GapOnly. And then also, it is at the discretion of the vet practice to accept GapOnly and offer it. So, asking your vets, as well, if they offer GapOnly, but that is a great technology.

So, just talking about some products in Australia that are available. So, you would have seen insurance offered by a wide range of companies, from RSPCA pet insurance, Medibank Private, Woolworths Pet Insurance. All of those are brands that actually with the PetSure group and they offer the eighty percent-twenty percent situation. When comparing them online, what I suggest people look at is the maximum that they payout per year. Some of them might be quite low, and the figure I am going to say might sound a lot, like eight thousand dollars. It does not go very far if suddenly you have got one condition that might chew up five or six thousand dollars. I am talking about big things like orthopedic surgery or something like that.

But I far recommend rather looking at between fifteen and twenty thousand per annum. Remembering also that that figure is going to be fixed for quite a long time before the insurance company changes it over the coming years, and vet fees will go up over the lifetime of your pets. So, looking at that not just how much they are going to charge you per month or per fortnight. Some of the quoting websites will actually quote you on a fortnight basis and that can then suddenly look a lot cheaper if you are comparing to one that charges or quotes on a monthly basis. So, just look at that.

Some of them will automatically put in a default excess of say, a hundred dollars. I recommend avoiding that because, or even two hundred dollars, because a lot of your regular vet visits might fall in that hundred to two hundred dollar range. And again, you will be very frustrated and disappointed because everything is falling under that excess and you feel like nothing is getting covered. It means the premium is a little less but rather look at zero excess. You have still going to have that twenty percent out of pocket.

If you have got private health with many of the companies, so Medibank, Bupa, HCF, they all offer pet insurance. And then they, very often, offer a discount to members there. So, you might get a discount there. You might have other rewards card with someone like Woolworths that then offers you some discount off your pet insurance. So, looking at other arrangements that you have got. Another company that is independent from that PetSure group is RACQ. We have a lot of our clients insured with them and very happy with their pet insurance coverage. And if you have got multiple policies, again, you can get a discount there.

Scott: And for international listeners, we know that this is very Australian what we are talking about. But you will find very common trends around the world where its major supermarkets, major insurance companies, animal groups, and stuff, that all offer pet insurance as products, as well.

Kevin: Absolutely. Google search in your country of pet insurance, but make sure you comparing apples with apples, check what the claims process is, what sort of excesses you will be up for, and then any exclusions on that. Most companies also will have a waiting period. So that means, typically, the first twenty-one or thirty days that there is no coverage for. So, if you take up pet insurance and five days later, your pet is unwell, unfortunately, they would not be covering them yet.

Some of them have an extended waiting period for things like cruciate surgery. But they will send you a form, when you take up your policy, that you can have a check with your vet to say that your dog does not have a cruciate injury and they will shorten that back to the traditional twenty-one or thirty days waiting period. So, it is very worthwhile doing that, just to certify that there is no problem.

Scott: And just for new puppy owners and stuff, as well, cover notes.

Kevin: Yes. So, that is where an insurance company, as part of their marketing, will give you a period, typically, four weeks, and then sometimes, it is six weeks, for absolutely free. It is not a catch. I really recommend people taking advantage of that. You do not have to phone up and cancel at the end of that four-week period, it just lapses. So, the big thing about it is it is normally issued when your pet has had a vet check. And so, it, actually, shortens that waiting period down to three days. If something untoward happens earlier, then you will be covered. It is sort of an opportunity to have some protection, some pet insurance while you are getting quotes from other companies, as well.
And it does not cost you anything.

If you are interested in taking up with the company that offers that cover note, definitely contact them to convert it into a full paid policy before the expiry of that cover note period. Because then, you will not have to serve any further waiting period. It will just rollover. But even if there is been a one day gap from the end of the cover note, you will then have to serve another waiting period. And if your pup has had a problem during that cover note period, for example, diarrhoea or whatever, if you just roll over, then that would not be a pre-existing condition. But if you actually have had a bit of a gap between the end of the cover note because it is, basically, like writing a new policy if you let it lapse. So, yes. Very worthwhile.

Scott: Yes. That is wonderful.

Kevin: So, I hope this has given a few topics for people to think about.

Scott: Absolutely. Great. So, to sum up, probably, look for the no-gap cover.

Kevin: Yes.

Scott: Or the Gap–

Kevin: GapOnly.

Scott: GapOnly, sorry. And the terms of this will vary as marketing practices around the world. I imagine that every different company called different. Eighty-twenty sounds great. With no excess is probably a good thing to look for. Look for the cover notes where it rolls over into a non-waiting period and get yourself that cover all the way through.

Kevin: Absolutely. And just compare, get quite a few quotes. You can do them online these days. Make sure you are comparing apples with apples with those. And if need be, seek your vet’s opinion on policies that you are considering in that. Normally, many vets are happy to discuss that with their clients.

Scott: Wonderful. Awesome. As always, Dr. Kevin Cruikshank, thank you very much for the excellent information. It is always a pleasure.

Kevin: [Inaudible] a pleasure, Scott.

Scott: Thanks, mate. Cheers.

Kevin: Bye.

[END]