Auckland resident Niki Bezzant received a partial refund after discovering a costly “fishhook” in her pet insurance policy when her cat, Lily, was undergoing cancer treatment, according to reporting by RNZ on Monday.
Bezzant, a writer and journalist, told RNZ she was initially relieved to have insurance coverage for Lily’s expensive veterinary care. “I was able to claim for a lot of her very expensive treatment in the last months of her life,” she said. However, she was surprised to learn the policy’s excess applied not just per condition, but per policy year, resulting in an unexpected $2,000 out-of-pocket expense.
“The excess on the premium in my case was $1000. This is per condition, per policy period. I assumed this meant – per condition – i.e. The jaw cancer that took Lily – per the period I held the policy, which seems fair enough,” Bezzant explained. “But no, this actually means per condition, per policy year. As it happened, my policy renewed in January, in the middle of Lily’s illness, and with that, another $1000 excess kicked in. So I ended up $2000 down.”
Bezzant said she complained to the insurer and received a “modest refund as a goodwill gesture.” In total, Lily’s vet bills amounted to $6,649, with the insurance company reimbursing $3,501. Bezzant estimates she paid approximately $1,300 in premiums over the life of the policy.
Despite the unexpected cost, Bezzant believes the insurance was ultimately worthwhile, stating she wouldn’t have had to consider the financial implications of treatment. “But You’ll see fishhooks,” she cautioned.
Consumer NZ insurance expert Rebecca Styles confirmed that the clause that caught Bezzant out is common in both pet and health insurance policies. Styles explained that insurance contracts are renewed annually, allowing insurers to alter coverage terms or decline renewal. She advocates for clearer communication of these conditions to consumers before purchase.
According to data from Southern Cross, which insures approximately 65,000 pets, the company paid out $30.2 million in claims in the last year, including $15,000 for a dog with immune-mediated haemolytic anaemia and $11,000 for a cat with pneumonia.
Styles noted that premiums for a six-month-aged cat ranged from $27.45 to $78 per month, while premiums for a six-month-old puppy ranged from $55 to $106. In addition to premiums, policyholders may likewise be responsible for an excess (ranging from 20% to a fixed amount of $100 to $200) and a co-payment of 10% to 30%.
She also cautioned that pet insurance typically excludes routine check-ups, vaccinations, and may not cover certain breeds predisposed to health conditions. A 2019 study indicated that most dog owners spend less than $500 annually on veterinary care, and cat owners spend less than $200, even accounting for inflation.
Moneyhub founder Christopher Walsh highlighted the rising costs of veterinary care, as treatment and medication are not publicly funded in the same way as human healthcare. He suggested that self-insuring – regularly setting aside funds – is a viable option for some pet owners, alongside the numerous pet insurance policies available.
Research by Leena Awawdeh found that pet insurance can encourage owners to seek more comprehensive veterinary care and potentially reduce the likelihood of pre-surgical euthanasia, but access remains limited by affordability.
