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The reasons for buying a pet insurance policy are quite obvious: for owners and their families who care a great deal for their pets an insurance policy provides peace of mind in knowing that their animal's wellbeing is safeguarded and, furthermore, on a financial level, it means that owners are protected against the cost of medical treatments, holiday (re)arrangements and other pet-related expenses which can, potentially, be very high.

However, although pet insurance can represent a prudent financial choice, there are a number of considerations that should be taken into account before choosing a policy to ensure that you are buying a suitable and worthwhile product. The different policies available on the market do offer some variety in terms of cover features which can provide different levels and systems of protection for your pet. At Know Your Money we have put together this brief guide to pet insurance policies to highlight some of the main factors that should be considered.

What's Covered?
As with all insurance products, different policies provide different benefits and different levels of cover. Pet insurance policies in general offer a fairly standard range of cover features for which policy holders can claim such as veterinarian bills, holiday cancellation, and loss by theft/straying, for example. Though most policies include the same core factors (to varying degrees), some policies' operate differently in small but significant ways with regards to payouts and claim processes. Some insurers also offer policies with a raft of additional cover features.

Vet Bills
The most fundamental factors that you should check on a pet policy before you buy are the cover limits and claim allowances for veterinarian bills, since medical expenses are, primarily, the reason for pet insurance in the first place.

There are a number of different ways in which insurers regulate the amount of cover provided for vet costs on a policy; Some insurers set monetary limits per condition and will only pay out a certain amount no matter how long your pet requires treatment; Some will pay out an unlimited amount per condition, but will only cover cost of treatment for the first twelve months of each particular condition - once that period is over the insurer will refuse payment for a pet's ongoing treatment; The system that offers the best value, however, is when a policy has yearly limits with no 'per condition' limits. With this type of policy vet expenses will be covered (to a certain degree) year after year even if your pet requires treatment for an ongoing medical condition.

Additional Cover Features
Additional cover features included in pet policies range from fairly practical to somewhat redundant. You should always carefully consider whether you are likely to claim for a particular feature before acquiring a policy since the cost of covering these eventualities are customarily built into the premium.

Some policy features may suit specific types of pet or particular owners' circumstances; you should make sure that a policy offers adequate cover for the things you really need without offering too much in the way of superfluous cover. For instance, cover for kennelling or cattery fees is only helpful if you regularly go on holiday without your pet; likewise foreign cover is pointless if you never take your pet out of the country. Decent cover for third party liability is certainly a sensible requirement if you own a large dog or potentially dangerous animal, but less so if you have a Chihuahua. Owners of expensive pedigree animals should make sure they will receive sufficient payouts in the event of theft, loss or death by illness or accident.

'Lifetime' Cover
Many pet insurance providers declare that they provide 'lifetime' policies - genuine lifetime policies mean that pets are covered at a fixed premium with conditions covered for their entire lives. However, in many cases this will be a false claim since prices are often hiked once the animal reaches a certain age and veterinarian cover is still subject to various limits. Furthermore, some nefarious insurers include pre-existing medical condition clauses into their renewals so that any condition that you pet has had will not be covered by your renewed policy.

There are a few providers who do provide legitimate lifetime cover policies and these are definitely worth checking out as they offer good value and comprehensive cover (e.g. Pet Pals).

Pet insurance Tips
- Buy over the internet when possible as most providers offer discounts to online customers.

- Many insurance providers also offer discounts to customers insuring multiple pets.

- Owners of expensive pedigree pets should make sure they are adequately covered in the event of theft, loss or death of their animal.

- Make sure you understand how a policy's vet expense cover works as there are a number of significantly different systems used by insurance providers.

- Be wary of false 'lifetime' pet insurance policies.

- Be honest about any pre-existing medical conditions when applying for a policy: it will make a policy premium more expensive but an insurance company will invalidate any claims if they have doubts as to whether your pet had an existing condition.

- Always be aware that the more things that are covered by a policy, the more you will pay. So when possible try to buy a policy that covers only the eventualities for which you are likely to claim.

- Most high street pet insurance providers only offer policies for cats and dogs. Some of the larger companies do offer insurance for horses and birds, but owners of other types of pets will probably have to seek out specialist providers (e.g. Exotic Direct).

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