Pet insurance 101: Do you need it?Pet insurance 101: Do you need it?

As of 2024, more than 60% of New Zealand households share their homes with at least one companion animal. For many of us, our pets are part of the whānau.

But furry friends come with responsibilities—and costs. For the 22% of Kiwis who’d like to have a pet but don't, costs are a major barrier. And we get it: an accident or sudden illness can quickly turn into thousands of dollars in vet bills. That’s where pet insurance can help.

What is pet insurance, really?

At its simplest, pet insurance is a financial safety net for your pet's health. 

It works just like other insurance—you pay a regular small amount (your premium) for ‘peace of mind.’ In return, the insurer agrees to cover a chunk of the cost if your pet gets sick or injured.

It’s about being able to make the best decision for your pet’s health in a stressful moment, without having to base it solely on your bank balance.

Decoding the lingo: Key insurance terms to know

Before you dive in, it helps to get your head around a few key insurance terms.

• Premium: The amount you pay (usually monthly or annually) to the insurance company to keep your policy active.

• Excess (or Deductible): The fixed amount you agree to pay yourself when you make a claim. For example, if you have a $200 excess and the vet bill is $1,000, you pay the first $200.

• Co-pay (or Co-payment): A percentage of the remaining bill that you also agree to pay. It’s different from an excess. For example, after paying your $200 excess on that $1,000 bill, there's $800 left. If your policy has a 20% co-pay, you’d pay 20% of that $800 (which is $160), and the insurer would pay the final $640.

• Cover: The detail of what the policy actually pays for. It’s important to read this part carefully.

• Claim: The process of asking your insurer to pay for a vet bill.

• Pre-existing condition: This is a big one. It’s any health issue your pet had before you took out the policy. Most insurers will not cover these, which is why it’s often cheaper and easier to get insurance when your pet is young.

• Exclusions: The list of things the policy won’t pay for. Always read the exclusions!

Learn more key insurance terms.

Choosing your cover: What are the main types?

Pet insurance isn't one-size-fits-all. Providers name their plans differently, but they usually fall into a few categories. For example, you’ll often see plans structured like this:

1. Accident Only: This is the most basic, and often cheapest, option. It covers specified injuries from an accident (like getting hit by a car, breaking a bone), but it won’t cover illnesses or diseases.

2. Major: This is a popular middle-ground option. It covers accidents plus the big, costly illnesses or conditions. Things like cancer, inherited conditions (after a stand-down period), or major surgeries. It's designed to protect you from a large, unexpected vet bill.

3. Major + Minor: This is the 'full package.' It covers everything in a 'Major' plan, plus those other common (but less severe) illnesses. This could include things like skin infections, allergies, ear or eye infections, and upset stomachs. This is the most complete cover, but the premiums will reflect that.

So, do I need pet insurance? Things to think about

Deciding if pet insurance is right for you is a personal choice. It all comes down to your unique situation and your appetite for risk.

Here’s what to consider:

• Your pet's breed and age: Is your pet a breed that's prone to specific health issues (like hip dysplasia for labs)? It’s almost always cheaper to insure a pet when they’re a puppy or kitten, before any health issues pop up.

• Your 'what if' fund: How would you cope with a sudden, unexpected bill? If a $4,000 emergency vet bill tomorrow would put you in a really tight spot, then paying a smaller, regular premium might feel like a good trade-off.

• Your peace of mind: For many pet owners, it’s not just about the numbers. It’s about knowing that if the worst happens, you have a plan.

There’s no single right answer. The ‘best’ insurance is the one that fits your pet, your budget, and lets you sleep at night.

P.S. Full disclosure! We’ve been learning a lot about this because we’re excited to be offering pet insurance with our pals at Cove. We wanted to help you get your head around the basics first. Sharesies pet insurance offering is issued by Cove Limited in accordance with the authorisation granted to it by the underwriter, Aioi Nissay Dowa Insurance Company Limited. Sharesies receives revenue from Cove for insurance policies sold through Sharesies.