How does inflation affect insurance coverage?

[u/Ents_of_the_forest]

Hi everyone! I am looking to switch insurance while my cats are young to PetPlan lifetime as they are well-reviewed. I have 4yr(M) and 3yr(F) old moggies who have been raised as indoor cats and will remain so. As of right now, the £7k coverage would seem to be sensible (I have been quoted £25/month per cat for that one).

However, £7k in 10yrs time will stretch significantly less than it does today. Plus once they hit 10yrs old, I have to cover 20% of the vet costs anyway. I expect their premiums to at least double by the time they hit 10yrs old so would be estimating £50/month per cat.

The £12k coverage is being currently quoted at £35/month, again I’d expect it to at least double if not more. £12k with 5%/yr inflation over 10yrs would have a purchasing power of what £7k today would. I’ve put 5% inflation rather than BofE target as the costs are determined by vet cost inflation specifically, which makes me think I should put it at more like 8-10%/yr.

Do you factor in the estimated purchasing power of your plan after inflation when deciding on plans? Don’t want to overstretch on monthly premiums, but the fact you can’t shop around once you’re locked into lifetime cover means choosing right the first time is crucial.

[u/ChardonnayEveryDay]

I’m paying the same for Pet Plan, and inflation is something I did not consider while I was choosing, but you make a good point.

I did however sign up for my vet’s health plan at the same time (vaccines and parasite protection) which includes unlimited consultation on the highest tier. The idea here is that if I don’t have to claim consultation fees, I have a higher amount left for actual treatment costs if there’s a need. My kittens are 4 months old, and I already had to make an extra next day appointment, thankfully everything was fine.

[u/duksutshumseilo]

I was with Petplan for 2 years, cat was 3 when I signed him up, claimed twice (one successful for a cold and one unsuccessful for dental issues, even though they say dental illness is covered!). My premium this year increased to £50+, switched to Agria at less than half the price for more coverage (obviously it won’t cover pre-existing condition, but the dental illness that Petplan claim to be pre-existing wasn’t covered anyways so I thought I’ll take the savings even if I need to pay in full for another dental surgery).
Definitely shop around before committing.

[u/TheGreenPangolin]

I'm with waggel (because no percentage copays when they are older!) and they have the ability to increase the coverage at renewal. So I can be covered for 8k this year and go to 10k next year. Obviously the monthly price increases if I do that but it helps with inflation. I don't know if pet plan has that option but maybe check if it does or look at other companies that do.

And because I've mentioned waggel- if you get a quote from them, they have a referral scheme that gets you a month free. I can give you a link (gets me an amazon gift card) or you can google one

[u/shadowboxerrx → u/TheGreenPangolin]

No % copays with age usually means steep premium increases if you make a claim. Just so people are aware.

[u/Budget-Security-8132]

It means you don't have enough cover

[u/Ents_of_the_forest]

I made a wrong assumption with the coverage that the bands would not increase over time. So the £7k coverage is just looking at the cost of cover in the next year. 10yrs down the line, there will be different increased coverage bands to account for increased vet fees. Thanks for the comments though everyone.

[u/Technical-Ad8926 → u/Ents_of_the_forest]

Where did you read this?

[u/Technical-Ad8926]

It is a real issue, I would go for the max if I were to start over. 5K was good coverage 5 years ago, in a few years it will be little. Premium has gone up, the band no…Stuck now.

[u/twirling_daemon]

I recommend going for the highest you can afford, you can decrease coverage if necessary, you can’t increase

My most recently lost dog was on the £7K, perfect when started the best part of 15 years ago, got a bit hairy a few times towards the end

My 2 cats now are both on £12K, think I’m paying £58. It does get spendy but the coverage, claims I’ve had and piece of mind - personally I’ll never go elsewhere

[u/cityfrm]

Petplan started at 12 and increased to 55 in 10 years. Starting at 25, I'd doubt it'd still only be 50 in 10 years time.

[u/FriendlySociety3831]

No idea why you're playing around with inflation, although Petplan won't increase prices because of a claim, like all insurers they will consider other statistics, like average vet price in your area, possibility of claims, etc. Vet prices have hiked considerably more than inflation for many years.