Pamper your pet with a personal policy

We all love our pets, and with vets' bills ever increasing it makes sense to insure them.

Taking out household contents insurance and motor insurance is automatic. Buying travel and medical insurance is nothing out of the ordinary. Insurance for our pets is, however, a relatively new idea and, as with all good ones, it is expanding at a spectacular rate.

The market leader, with 42 per cent of the UK's pet insurance business, remains Petplan, the firm founded some 22 years ago. However, in the past two years Petplan's dominance has been under increasing challenge from a wide range of other providers, while the market has itself grown massively. There are now more than 1.5 million owners who hold insurance cover for their pets, a figure which grows every year.

Adrian Webb, of Direct Line Insurance, which 14 months ago launched a new service in insuring cats and dogs, says: "Pet owners should not see pet insurance as a luxury anymore. Veterinary costs can be high, which many owners do not discover until it is too late."

One of Direct Line's first claims was for a Scottish terrier which was fitted with a child's pacemaker, obtained from Great Ormond Street Hospital. The operation cost pounds 2,490.

Other typical treatments which carry high costs are, for example, pounds 850 for treatment for a three-year-old cat involved in a road accident, pounds 800 for a dachshund with paralysis of the hind legs following a slipped disc, and pounds 1,500 for a Labrador with arthritis that needed a hip replacement.

Cats and dogs are not the only animals catered for in the pet insurance market, although they are the most commonly insured. Petplan entered the equestrian insurance market in 1988, and is now the market leader in this field. Rabbits can be insured by Petplan, under its relatively new scheme, Rabbit Plan. Cover is also available for more exotic pets but is only offered by a few companies.

There is a variety of cover available, most including veterinary fees for accident or illness, death from accident or illness, advertising and reward for recovering a lost or stolen pet, holiday cancellation cover should your pet fall ill immediately before you go on holiday, and boarding kennel fees, should you have an accident or fall ill. These come under a number of different premiums depending on the scheme that is chosen.

However, as when taking out any sort of insurance, you should read the small print of the policy in order to check what is covered and what exclusions there are. A report on pet insurance, carried out by Which? magazine, says: "You won't be able to claim for the costs of vaccinations or routine examinations. Neutering and pregnancy, and elective surgery for pregnant animals, aren't covered, although complications arising from pregnancy may be covered.

"In some cases you may not be able to claim for particular diseases or conditions for certain types of animal. For example, retrievers can be affected by a hereditary eye disease, and Cavalier King Charles spaniels are prone to heart problems. Many policies won't cover these complaints, or will offer only limited cover for them."

Other, more unusual, benefits are provided by some schemes. For example, an insurance scheme for the over-fifties, run by the Saga group, pays out a sum of pounds 750 should your cat or dog capture an intruder in your house. This benefit, sadly only applying to dogs in this case, is also offered by Equine and Livestock, which pays out up to pounds 850. Another unusual benefit comes from Direct Line, which offers a bereavement help line on the death of your pet.

One aspect of cover provided by most pet insurers is that of third party liability, usually for dogs and horses. In this age of litigation, this type of cover is becoming more and more vital. As an owner, you are responsible for your animal's actions, including its less desirable ones.

For example, one claim involved a Newfoundland dog who jumped up at its insured owner's elderly neighbour. This resulted in the neighbour fracturing his hip, leading to an artificial hip replacement. After paying for the hip replacement, compensation for pain and suffering, cost of employing a gardener, and the private health insurance costs, the overall outlay came to pounds 37,512. However, again, it is worth checking the small print on your policy for any third party exclusions. Dogs listed under the Dangerous Dogs Act are not usually covered by this.

Pet insurance is not only becoming a necessity for the pet owner, but is also a way of ensuring that your animal receives the best care available. As Emma Turton, at Saga, says: "A pet is as valuable as a member of your family. Taking out pet insurance will insure that you will meet its needs."

Direct Line, 0117 946 8833; Equine and Livestock, 01423 331322; Jardine Pet Insurance, 0121 224 6777; Petplan, 0800 282 009; Saga, 0800 99 77 66