Pet insurance costs and what to know before you rely on it

Why pet insurance has become such a big talking point

Pet ownership has grown, and so have vet bills. As treatment has become more advanced, it has also become more expensive, which is one reason pet insurance has moved from a niche product to a mainstream financial topic.

Recent industry data from the Association of British Insurers (ABI) shows that insurers paid out around £1.23 billion in pet insurance claims in 2024, more than double the total a decade earlier. The average claim value is now reported at about £685, and some complex surgical treatments can cost tens of thousands of pounds.

At the same time, premiums have risen noticeably. One market analysis notes that average pet insurance premiums climbed by about 21% between early 2023 and early 2024. Another report notes an average annual premium of around £389 in 2024, while average claims remain significantly higher than that.

This article sets out factual information about how pet insurance currently works, the pressures behind prices, and the types of issues that commonly arise. It is for general information only and does not recommend, promote or discourage any product.

Key facts about pet insurance right now

Pulling together recent data:

• Insurers paid out an estimated £1.23 billion in pet insurance claims in 2024.
• Around 1.8 million claims were made in that year, which is roughly 4,900 claims per day.
• The average claim is about £685, up roughly 3% year on year.
• The average premium is estimated at about £389 a year, though actual prices vary widely by pet type, breed, age and location.
• The UK is reported as having some of the highest pet insurance costs in Europe, driven by rising vet fees and higher claim volumes.

In summary, the typical claim amount is now substantially higher than the typical annual premium, which helps explain why claims costs have grown so quickly, and why insurers are under pricing pressure.

What pet insurance usually covers (and what it often does not)

Policies differ, but the Financial Ombudsman Service (FOS) broadly distinguishes between:

• Annual policies – cover conditions for a policy year only; after that year, new cover for the same condition may not be available.
• Lifetime policies – cover ongoing conditions for as long as the policy is renewed and terms are met, usually up to a vet-fee limit each year.

Typical areas that are often covered include:

• Treatment for accidents and injuries
• Many illnesses and diagnostic tests
• Some emergency operations and hospital stays
• Certain medications within policy limits

Common exclusions or limitations can include, for example:

• Pre-existing conditions (issues occurring before the policy started or during waiting periods)
• Some hereditary or breed-related conditions if not included in the wording
• Routine care such as vaccinations, flea and worm treatment, or neutering, unless a separate wellness add-on is taken
• Dental treatment, unless specifically included or linked to accidental injury

Consumer research has suggested that many people do not fully understand policy limits, excesses and exclusions, particularly around lifetime cover levels and chronic conditions.

Rising premiums and why costs feel higher

There are several reasons why pet insurance has become more expensive:

1. Vet fees and medical inflation
   Investigative reports and consumer pieces highlight strong increases in vet bills, with some owners facing four- or five-figure charges for emergency treatment. More advanced diagnostics, specialist referrals and complex surgery all contribute to higher claim costs.

2. Higher aggregate claims
   ABI data show record payouts and an ongoing increase in the number of claims, meaning insurers are covering more treatments than before.

3. Premiums catching up with claims experience
   Pricing consultancies report double-digit percentage increases in average premiums over recent years as insurers respond to higher claim trends and regulatory expectations about sustainability.

4. Regulatory and compliance costs
   The Financial Conduct Authority’s (FCA) Consumer Duty requires insurers to ensure products represent fair value and that customers receive support and clear information. Meeting these standards can increase operational costs, even though they are aimed at delivering better outcomes.

5. Older pets and breed risk
   As pets age, the likelihood of illness rises. Some breeds also have well-documented health risks, which can affect premium levels or eligibility. FCA guidance has highlighted that firms should be clear about age limits and eligibility so customers are not sold policies that cannot pay claims.

Claims, complaints and common problems

Pet insurance generates a noticeable volume of complaints. The Financial Ombudsman Service reports that the most common issues include:

• Disputes over whether a condition is “pre-existing”
• Disagreement about whether an illness is one condition or multiple conditions under the wording
• Policyholders discovering limits or exclusions only at the point of claim
• Premiums increasing significantly at renewal, especially after claims

Recent analysis of ombudsman data suggests that, while overall complaint volumes in insurance have only risen modestly, the percentage of pet insurance complaints upheld in favour of customers has increased, with one dataset indicating an upheld rate close to half of all cases in a recent quarter.

Citizens Advice also provides general guidance on what can happen when there is a problem with an insurance claim, including escalation routes to internal complaints procedures and then, if unresolved, to the Financial Ombudsman Service.

Things people often look at when comparing or renewing pet cover

Because policies differ, many pet owners focus on certain key features when they look at documents or comparison tables. Common aspects that people pay attention to include (these are not recommendations, just examples of what is often checked):

• Type of policy – annual, maximum benefit, or lifetime
• Vet-fee limit per condition or per year – for example, a fixed amount per condition, or a total annual pot
• How chronic conditions are treated – especially conditions like diabetes, heart problems, arthritis or skin conditions
• Excess structure – whether there is a fixed excess per claim, an annual excess, or a percentage-based co-payment (sometimes called a “co-insurance” amount)
• Age limits – whether new policies are available for older pets, and whether excesses or co-payments change with age
• Waiting periods – how long after taking out the policy certain conditions are excluded
• Rules around referrals and out-of-hours treatment – some policies have specific conditions about using certain vets or informing the insurer

Consumer-facing organisations and research groups have suggested that clearer communication on these points would help people understand what they are buying and reduce later disputes.

When pet owners struggle with costs

Not every pet owner has insurance, and not every policy covers all costs. Charities and welfare organisations have reported increased demand for help with veterinary bills as general living costs and vet fees rise. For example, the RSPCA provides information about possible financial assistance and suggests that some households may be able to access means-tested support or reduced-cost treatment in certain regions.

Again, these schemes have their own criteria, and not everyone will qualify, but they illustrate the financial pressure that unexpected vet bills can cause.

Key points to take away

• Pet insurance payouts in Britain have reached record levels, with claims exceeding £1 billion a year and average claim costs significantly higher than average premiums.
• Premiums have also increased, with some analysis showing double-digit percentage rises in a relatively short period.
• There are important differences between annual and lifetime policies, and between what is covered and what is excluded.
• Complaints often centre on claims being rejected, cover limits, pre-existing conditions and premium increases.
• Pet insurance can help with large, unexpected vet bills, but it is not a guarantee that every cost will be covered.

This article is intended only as general, factual information. It does not recommend any product or provider, does not assess suitability for any individual and is not financial, legal or veterinary advice. Anyone needing help with a specific situation typically considers speaking with a regulated adviser, the insurer directly, a consumer organisation or an appropriate professional.