Is insurance for your pets such a wise investment?

For anyone wondering whether to spend hundreds of pounds a year on insurance for their pet, it's a dog's life. On one hand, research from pet insurers shows one in three pets in Britain will require non-routine medical attention during a year, and, worse, that it could be a long, expensive exercise: half of all pet insurance claims are for treatment lasting more than 12 months.

Sainsbury's Bank has calculated that Britain's nine million-plus cat- and dog-owning households spend an annual average of £137 on vet fees, though more than 600,000 fork out £500-plus a year. To repair a dog's torn ligament could cost £1,500, and it is £1,300 to fix cataracts, or £600 to patch up a cat hit by a car. Yet only one animal in 10 is insured against such costs in the UK.

Costs are rising 10 per cent a year, Robert O'May, insurance product manager at Sainsbury's Bank, says. "They are driven by medical inflation, as expensive new diagnostic procedures and surgical treatments become available," he says. Animals are also living longer than they used to, in part because of medical advances such as chemotherapy and pacemaker implants.

That is most gratifying, and it means that your beloved doggy or moggy is still making messes in the daisies rather than pushing them up. But higher vet fees and longer life expectancies predictably mean higher pet insurance premiums.

Gyles Haverty at PetPlan estimates they have increased at the same rate, on average, as vet fees over recent years. So it is worth asking if pet insurance makes sense, given the alternative of paying for treatment as and when required. A Which? report last month pointed out that with insurance premiums at between £50 and £500 a year for dogs, and £30 to £200 a year for cats, owners could shell out as much as £5,000 over the life of their pet on cover they may never need.

That is always a risk with insurance: some of its value is as a comfort blanket, whether or not the worst actually happens. But there is also a host of exclusions, terms and conditions to consider before you commit yourself to protection for your pet, which could make claiming much more expensive than you anticipated.

So what is included? The hundreds of insurance policies offer a wide range of maximum annual cover on vets' fees, and an even wider range of premiums. Numerous additional elements include: third-party liability (in case Satan takes a chunk out of the postman); emergency boarding fees; advertising costs and a reward if your pet gets lost; compensation for theft; death benefits; compensation for cancelling your holiday because Fido is ill; personal accident cover for owners (in case he takes a chunk out of you).

Most insurers will pay for alternative therapies such as homeopathy or acupuncture. The list of added extras goes on. But policies do not cover routine treatments such as flea control, vaccinations or castration, though Sainsbury's Bank has recently enhanced its benefits to include tick and worming treatment.

Weighing the options is complicated. Premiums from insurers such as Marks & Spencer or Healthy Pets vary according to breed: some pedigree breeds have particular problems, making them more expensive to insure. "Cross-breeds have had those weaknesses bred out, so if you want a tougher animal and lower insurance get a mongrel," Mr O'May says. Postcodes also influence the premium, because vets' fees are 10 to 15 per cent higher in the South-east and some insurers will not take on animals over a certain age.

Which? editor Helen Parker says: "Pet insurance gives you peace of mind from a vet bill you can't afford. Some owners may prefer to save the money and pay for treatment as the need arises."

FACT FILE: PET INSURANCE

When choosing a policy:

* Shop around

* Read exclusions and conditions carefully

* Look at vet fee cover and, for dogs, third-party liability

* Avoid cheap policies with low vet fee cover. Which? recommends at least £4,000 a year

* Avoid 12-month limits on claims

* If you're thinking of reviewing your insurer, do it quickly in case you are faced with a claim for what could be called a pre-existing condition

* Buying online can be cheaper

CONTACTS

* www.insuresupermarket.com

* PetPlan: www.petplan.co.uk 08000 727000

* Sainsbury's Bank www.sainsburysbank. co.uk 08000 565758

* Animal Friends www.animalfriends. org.uk 0870 40 30 300