It could be argued that pet insurance is not as popular as it could or should be. The take-up is not impressive in the UK (25%) but an exception is Sweden (90%) in the EU (see below). One reason is that it can be uncompetitive when compared to self-insurance i.e. a savings scheme run by the cat’s owner. However, pet insurers may become more competitive as the expense of veterinary care goes up. There are half a dozen reasons why veterinary care is becoming more expensive.
Luck plays a role in the health of companion animals and pet insurance provides a counterbalance against bad luck. It also improves the health of companion animals through superior veterinary care provided more often and more promptly because there is no brake on paying the bill. Pet insurance also means that veterinarians get paid better which means they can afford better equipment which in turn means you end up with a virtuous circle of improvements.
Some reasons why veterinary care is becoming more expensive:
- Veterinary care is becoming more refined, involved and specialist. The quality of care is certainly a lot better than it used to be and in parallel with that you can expect veterinary fees to increase which should encourage people to take out pet insurance to cover the fees.
- Nowadays, cat and dog guardians expect more from their veterinarian because they can provide more with advances in technology. The lifespan of cats has increased. I’m told that the average lifespan of the domestic cat in America has increased dramatically over the past few decades. In the 1980s the average cat lived to the age of seven and just over nine years of age in 1995 (surprising – source: sciencealert.com). Nowadays you can expect a domestic cat to live into the late teens. This must be due to advances in medicine, veterinary care, nutrition and in the US more cats living inside the home. Owners expect more and therefore are prepared to pay more which leads to thoughts of pet insurance.
- Big pharma has probably exploited the pet ownership market by cranking up the price of drugs. Cat and dog owners treat their animals as family members. Often there is a strong emotional bond between non-human animal and human which leads to a willingness to spend more on medical treatments.
- In a developing society, regulations regarding how society functions tend to increase and with these increases the expenses of running a veterinary practice can go up. For example, zoning laws on veterinary practices are more restrictive nowadays I’m told. There are increased medical and fire safety laws as well.
- Veterinarians tend to practice medicine more cautiously these days to avoid negligence claims against them. This pushes up the cost of veterinary care because they carry out more tests and record what they do more thoroughly. They may also have to pay higher insurance premiums.
- Another factor might be that veterinarians in more rural areas charge more because it is harder to find veterinarians in those locations. Customers pay more in order to attract them to the area and retain them.
The phenomenally high rate of pet insurance in Sweden (about 90% for dogs) has been put down to cultural attitudes. It’s a country where they pay high levels of tax and think that it is a good idea. The country has socialist traditions. Pet insurance in some ways is a socialist phenomenon. It spreads the risk. Somebody having pet insurance may never use it because they’re lucky. A person may care for a cat or dog who is constantly ill. They are unfortunate and so is the cat and dog but their insurance pays for the treatment. Pet insurance counterbalances unfairness.
When pet insurance is so widespread it improves veterinary standards which in turn can force up the cost of insurance which in turn can further improve veterinary standards. It is a constantly improving cycle. The end beneficiary is the companion animal. It could be said that people concerned with animal welfare should encourage a maximum take up of pet insurance by the country’s companion animal caretakers.