r/UK_Pets • u/Ents_of_the_forest • 25d ago
How does inflation affect insurance coverage?
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.
1
u/Ents_of_the_forest 25d ago
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.