Everything you need to know about Ethical Pet Insurance
Want to be sure your premiums are funding an insurer Fido would approve of? It’s time to become an ethical sleuth
Ethical pet insurance - there’s a strange idea.
You wouldn’t be alone in assuming that all pet insurance - the product that financially protects our nearest and dearest non-humans if they get into trouble, is basically ethical. Isn’t it?
As always, it depends what your definition of ethical is. And while that’s a very personal definition, in terms of financial products, it basically boils down to:
Environmental protection and recovery including animal welfare
Social justice and human rights
Governance - how a company conducts itself, particularly when it comes to paying adequate taxes, etc.
Navigating a minefield
Every business wants to be seen to be ethical these days - as a responsible, reliable and trustworthy operation that, especially in the world of personal finance, exists to help people with their money, rather than simply pursuing a profitable business model.
Greenwashing, or indeed, ethics-washing in general, is rife.
So, if you want to make sure that the premiums you fork out to protect your furry friend are being invested in an ethical insurer, where on earth do you start?
Ask the right questions
With a few seemingly straightforward questions, suggests the Good Shopping Guide.
The big one is whether the insurer has an ethical investment policy. That’s important because the UK’s major banks and insurers, with their billions of pounds worth of people’s pensions, investments, savings, personal, health and general insurance premiums, are some of the world’s biggest institutional investors.
And money like that can and does change the world depending on how it is invested. So, your first task when considering a list of potential pet insurance providers, is to find out what that insurer invests in.
How transparent and open an insurer is about its business operations and investments is an important question in its own right, but few insurers are prepared to provide a list of their stake holdings. That means those that are transparent are probably worth a second look.
Leave it to the professionals?
Deep diving into the investment portfolios of the world’s biggest financial firms isn’t easy, let alone swimming off into issues like their voting history as shareholders in other businesses. Do they block other businesses from pursuing a more ethical strategy for example? And how on earth would you find out?
Luckily, there are now several sources of useful information that have done the hard work for you, including coming up with league tables of financial services businesses operating in the UK in terms of their ethical priorities. This is definitely a case of others doing the hard work, so you don’t have to.
They include The Good Money Guide, campaigner and publisher the Ethical Consumer, environmental investment campaigner Make My Money Matter, research business Good with Money and the major environmental charities.
Join the club
Have a look at the Unfriend Coal campaign too, which offers a list of the major insurers still investing in fossil fuels. And if you’re considering buying a policy through your bank, you can also check how they rank in the annual Banking on Climate Chaos report - produced by a huge global group of environmental campaigners and charities.
You can also ask if the insurer is a member of ClimateWise. This is a global insurance industry group - managed by the University of Cambridge’s Institute for Sustainable Leadership. Its members adhere to a voluntary set of environmental standards and must at least disclose how they’re responding to climate change every year.
Meanwhile, some of those league tables also take into account other ethical measures, including whether the insurer invests in arms and military supplies businesses or funds, and how they approach tax avoidance.
Right ethics, right policy
By now, you’ve probably narrowed it down to only a couple of providers. After all that, the policy still has to be right for your needs.
While cost is obviously important, even the cheapest policy isn’t worth it if it doesn’t fit your circumstances. And it’s not always just about vet bills.
Do you need overseas travel cover as standard, for example? Or a pay out to cover kennels or a cattery if you’re hospitalised? Perhaps you’re concerned about dental work, which should be covered as standard if your pet has an accident, but may not cover illness related treatment.
Alternatively, if you’re struggling to find an insurer that meets your ethical requirements, your product requirements, or both, you might prefer to consider self-insuring.
The basic idea is that you set aside at least the amount you’d spend on insurance premiums every month or year, building up a savings pot to cover the cost of medical treatment if your pet becomes ill or has an accident.
Fans of this approach point to the pot of cash you could, possibly, have to spend or save for other things if you never need to dip into it for treatment. But others worry that it may not cover big, unexpected costs. Vet bills, especially if your pet needs extensive or complex treatment, could easily be more than the amount you’ve set aside.
Anecdotal evidence from some pet owners suggests that just being seen by a vet - without treatment - could cost as much as £250. Common operations to remove an item your dog really should know better than to swallow for example, (why is it always socks…?) can land you with a bill for thousands of pounds.
And while there are charities that will treat animals for free if they belong to those who truly can’t afford it, the criteria are understandably tough.
There are also other pay outs that you’d miss out on by self-insuring though, including if your pet dies as well as the cost of euthanasia, burial or cremation, is lost or stolen, or causes injury or damage.
Nobody wants to think about Rex destroying the in-laws’ sofa, but it could happen. Let’s just hope it was ethically sourced.
Other useful guides
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