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Should You Choose a Higher Excess to get a Better Deal on Pet Insurance?
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Some insurers let you choose the excess (the amount you contribute towards vet bills) on your pet insurance plan, opting for a lower or higher excess. Why would you want to choose a different excess? Well, for starters, a higher excess means the premium you commit to paying is lower—the insurer can offer lower premiums for a higher excess they'll have to pay less towards future vet bills as a consequence.
While a lower premium is certainly attractive, a higher excess also means you commit to a higher contribution of future vet bills. Is it worth it? Is this the best way for you to lower your pet insurance premiums? We've analyzed some quotes with varying excess levels from Tesco Pet Insurance to help understand the dynamics at work.
How Much Will a Higher Premium Save in Pet Insurance Premium?
Achieving a lower annual or monthly premium would certainly be welcome news to most pet owners. But if the lower premium is achieved through a higher excess, the insurer will contribute less towards your vet bills should you ever need to make a claim on your pet insurance—and you will pay more.
The premium savings achieved through a higher excess may or may not make economic sense for you, depending on whether you want insurance to help with smaller illnesses and injuries that may cost a few hundred pounds to treat, or whether you only want insurance to protect against the financial cost of, for instance, a surgery that could cost thousands of pounds.
Before you make a decision, consider the amount of premium savings you could achieve and how a higher excess might impact your ability to be reimbursed.
If you would like a plan with both a relatively low excess and a low price, there are some decent, cheap Lifetime pet insurance options available in the UK that you may find suitable.
Tesco Pet Insurance Example: Which Excess is Best for You?
Tesco pet insurance policyholders can choose the standard £60 excess or a higher excess of £120 or £200. By opting for a higher excess, your pet insurance premium will be lower. Below is our analysis to determine if the lower premium is worth the potential costs.
We recently quoted two sets of Tesco dog insurance policies for a healthy, young, medium-sized crossbreed—one with a £60 excess and the other with a £200 excess. On average, the policies with a higher excess cost £81 less per year.
Higher vs. Lower Excess Price Comparison
| Lower Excess Option | Higher Excess Option | |
|---|---|---|
| Excess | £60 | £200 |
| Sample Annual Premium | £437 | £321 |
| Annual Cost with No Claims | £437 | £321 |
| Annual Cost with 1 Claim | £497 | £521 |
| Annual Cost with 2 Claims | £557 | £721 |
Clearly, if you don't submit any claims then you're better off financially with the cheaper policy (higher excess). But what if you need to claim—is the premium savings enough to make up for a higher excess? No. If you claim once per year, you are worse off by £24 for having chosen a higher excess. While you saved £116 in premium, you pay £120 more in vet bills for one claimed condition due to the higher excess (£200 - £60 = £140).
And if you claim twice in a year, you're worse off by £164 with the policy with the £200 excess compared to the policy with the £60 excess.
How Can You Decide?
Ultimately, the best decision for you will depend upon your individual situation—taking into consideration your income, savings, and your ability to absorb a large vet bill should one arise.
When deciding between different quotes you can compare the price difference to the excess difference. And take into consideration any knowledge you might have about your potential claims based (e.g. thinking about your previous claims history, age of your pet, etc.).
By accepting a higher excess for a lower premium, you're taking on more of the potential risk. Those with more income and/or savings to spare will be better placed to do so. Those with less income/savings may need the lower excess to keep more of the potential risk with the insurer.
Which Insurers Offer Choice of Excess?
While not a comprehensive list as we have not yet reviewed all UK pet insurers, the following companies offer pet owners a choice of excess when you buy direct: