It makes sense to insure your pet

Tesco's recent entry into the pet insurance market, following fellow supermarket Sainsbury's a year ago, means good news for the hard-pressed buyers of dog and cat food, already hounded as they are by the cost of keeping animals healthy.

Tesco's recent entry into the pet insurance market, following fellow supermarket Sainsbury's a year ago, means good news for the hard-pressed buyers of dog and cat food, already hounded as they are by the cost of keeping animals healthy.

For years the market has been dominated by two old insurance stagers, Pet Plan (the biggest with 42 per cent of the market which stands at about £140m a year), and Pet Protect. In the past few years there has been a steady trickle of new arrivals, such as the Nationwide and the Woolwich as building societies sought to widen their interests.

Direct Line started in l997 and a small travel insurer, Primary Direct, joined a year ago. Now we have the supermarkets - ideally placed to catch the attention of the pet lover with their lines of cat and dog embossed tins, biscuits bags and flea collars. Sainsbury's even set up a pet club which has 250,000 members.

High insurance fees are being eroded rapidly, opening up the market to a mass of people who wouldn't have considered pet insurance until now. As you can see from the table, £6 for a cat a month and £8 a month for a dog is the going rate which means insuring a humble non-pedigree kitten is not a daunting prospect.

Why insure? Once it would be debatable whether to vaccinate a cat against flu, gastro-enteritus and leukaemia but for most people this is no longer an issue. Doing it saves angst and expensive trips to the vet. Choosing insurance is becoming more the norm: it cuts worry and reduces fear of vet fees which can rise alarmingly.

Mike Gasgoigne, chief designer for the Jordan Grand Prix, owns lurchers Zack and Finn on his farm in Wiltshire. The dogs were chasing rabbits and hunted them into an aircraft hangar owned by a neighbouring farmer. The dogs chewed through the tailplane of a light aircraft and did £950 in damage. The Gasgoignes insurance on the dogs which included third party cover (as most policies do) with Direct Line.

"We have only recently started taking out insurance on the dogs and when this happened Direct Line paid up very efficiently and we got all the money back apart from our £250 excess," says Mr Gasgoigne.

"We'd also incurred stitching costing £300 for one of the dogs which had damaged itself tearing through hedges. So altogether we're glad we decided on insurance."

The thing to remember about the cheaper deal is that it won't offer everything. Pet Protect, whose higher than average rates often offer fuller cover, are now under siege, amid warnings that pet-owners must read the policy small print.

"Some insurers appear to be offering a good deal but in fact they're not quite so good when scrutinised close up," says Pet Protect's Penny Alston.

Age Concern, Tesco and Direct Line (Tesco is underwritten by Direct Line) and several others won't pay out more than the first year for a long-term complaint such as diabetes or arthritis. Pet Plan is proud of its "cover for life" policy.

Anne Henderson from Glasgow, whose two year old part-Alastian Lucy ate adult anti-inflammatory pills as a puppy and developed chronic renal failure, says: "At first it was touch and go whether she would pull through but now we are treating her homeopathically once a month.

"I've never had pet insurance before but I registered her with Pet Plan before this happened for £8.45 a month and it's been brilliant. I have vet fees of £50 a month and will have until she dies."

The cheaper insurers won't trumpet their speed of settlement but quick claims settlement is much appreciated. Pet Protect says 94 per cent of its claims are settled direct with the vet, if required, within 48 hours. Pet Plan claims three days for its settlement. It says it isn't upset by the arrival of the supermarkets, with Tesco intending to be market leader in five year.

Pet Plan's David Keel says: 'One in seven domestic animals are insured at present, so it's a huge market and the demand is there. The likes of Tesco bring the option to the attention of the public and also alert them to the cost of vet fees."

The charity Age Concern has cannily locked onto a piece of the action with its policies designed for the elderly and special deals tailor- made for its clients.

These include kennel fees of up to £400 if an owner should be in hospital for more than 96 hours, and up to £400 kennel fees in the event of the client's demise. On the same theme, Direct Line offers telephone pet bereavement counselling.

Don't forget that pet insurance does not cover routine care like vaccinations and other preventative treatments like deworming. Some insurance firms have flat fees regardless of where you live but most go for varying charges because country vets tend to charge less.

Different prices for breed, size and age are common, and pedigrees always cost more because they are more prone to illness. All insurers have cash limits to the amount they will pay, but they are usually fairly generous, into the thousands per year.

Look for a policy that suits you and includes holiday cancellation due to a pet, boarding kennels if you have to go to hospital, pet legal advice line, vet emergency helpline, ability to increase excess to keep premiums low, compensation for death by accident and recovery costs for a missing pet.You can even get compensation for loss of a pet, although any parent would find that hard to explain to a grieving child.