Pet insurance complaints rocket - as it emerges one in three claims are declined

Every responsible pet owner knows how vital it is to have pet insurance in place. Anything from an accident to an illness could leave you with a bill for thousands of pounds, and an agonising decision over how much you really value your pet's life. Pet insurance is supposed to take away this worry and risk, by paying out if the worst came to the worst. However, two new reports have revealed how badly many policies are falling short.

A report yesterday from the FOS found that pet insurance complaints are up 38% in a year to more than 1,000. This is less surprising when you take into account new figures from money.co.uk that reveal one in three pet insurance claims for cats and dogs are declined.

This is dramatically higher than the level of rejections for other common types of cover. According to the ABI, only 1% of car insurance claims, 13% of travel policies and 21% of home insurance claims are turned down.

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.

Among 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, just 4% of those who had been rejected escalated their case. Of those, 3% won.

Check the small print

Insurance itself isn't cheap. On average an owner pays £240 a year for cover - and it can be much more. It starts to seem like a horrible waste of money when you hear that they are also paying £232 million for treatment that is not covered by insurance.

Hannah Maundrell, Editor in Chief of 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."

She also says there are seven common loopholes to look for:

1. Most policies won't cover pre-existing conditions, and those that do will stipulate that your pet must have finished treatment and be symptom free for around two years.

2. Most will not cover pets over eight years old.

3. Most won't cover pets used for commercial reasons - including commercial breeding.

4. Most won't cover breeds listed under the Dangerous Dogs Act.

5. Some insist you use their network of vets.

6. Most insist on vaccinations and annual health checks.

7. Lifetime policies are the most expensive but can offer the most comprehensive cover for your pet. If your pet develops an illness, it will be covered throughout their lifetime as long as you pay your premiums - compared to renewable cover which will then class the illness as a pre-existing condition and won't cover it. The benefit of lifetime cover is evident from the fact that Petplan, which offers lifetime policies, pays 97% of its claims.

The downside is you're stuck with the same provider.