JEFF PRESTRIDGE: Your pet hate? Soaring price of premiums

While I’ve spent a lot of time lately dealing with a deluge of correspondence from readers affected by inflation-busting increases in the cost of their auto and home coverage, other insurance products are also causing concern. Nothing more than a pet cover. Insurers, many say, laugh about it.

Last week I asked pet owners to let me know if they face steep premium increases when their pet coverage is renewed. This followed my report on the rising cost of cover (up 24 percent from last year) for six-year-old miniature pinscher Ellie, owned by London-based retiree Kath Rooney.

The answer is a resounding ‘yes’. Many believe that insurers raise premiums knowing that customers cannot move to a competitor because they do not provide coverage for existing medical problems. In fact, they are caught in a trap.

Laura Taylor, who lives in Cornwall and works for the National Trust as a car park traffic controller, has been diligently monitoring cover costs for her two cats Finnegan and Kizzy (brother and sister) for the past 12 years. The siblings are now 15 years old. Shortly after adopting them as a year and a half, Finnegan broke a leg when she fell off a banister. Treatment at the vet left Laura with a £500 bill. She decided it was time to insure the two cats.

Laura, 62, says premium increases on renewal were “small” in the early years. But since 2016, the cost of annual coverage has increased by 20 to 41 percent.

As a result, last year’s cover for Finnegan, who needs ongoing treatment, cost £810, while Kizzy’s was £650. She can’t imagine what the premiums will be when the coverage is renewed in August.

“I’m stuck between a rock and a hard place,” says Laura, who has spent her life surrounded by pets — cats, dogs, horses, donkeys, and macaws. “I’ll stay on course and take the premium increases on the chin, or fund the cost of future treatment myself.”

Laura can’t look around because of their age – no insurer would take them. Finnegan also has persistent hyperthyroidism that requires daily tablets and an annual blood test. A new insurer will not cover this condition.

To make matters worse, the insurer has now changed the way it calculates the deductible it must pay when claiming the cost of treating Finnegan’s condition. It is the greater at £99 or 20 per cent of the annual claim value.

“I feel like my insurer has me over a ton,” she says.

It’s a view experienced by readers like Pauline Parsons of Gloucester.

Her eight-year-old pug, Bruce, costs her and husband Alan a fortune to raise – £1,826 a year, compared to £1,541 last year and £456 in 2015.

She also pays a monthly fee to a vet to have Bruce wormed and vaccinated. Having lost her job at the local Debenhams store when it closed in 2021, and now that Alan has retired, Pauline says the cover costs have become prohibitive.

“Bruce is a sweet little fellow,” she adds, “but no one told us when we bought him about the health problems Pugs are known for.”

So far, Bruce has been treated for breathing problems caused by skin folds in the mouth and for eye ulcers – common health problems in pugs. He also had a benign tumor removed and had surgery to prevent his eyelashes from growing inward into his eye.

When Pauline challenged her insurer over the latest renewal premium, she was told she could cut the monthly cost by £2 but cover would be reduced. She refused.

Pauline says that if she had known in advance how much it would cost to insure Bruce as he got older, she probably wouldn’t have bought him (much as she loves him).

The only winners in pet insurance, it seems, are the insurers and veterinarians. Insured people are cheated.

Fight against scam insurers

I have spoken a lot with the Financial Conduct Authority over the past few days. Poor me, you might say.

While the focus of our conversation was on the rising cost of auto and home coverage, the regulator was also keen to raise concerns about insurers not giving customers a fair price when their car has been written off following an accident.

If you have been a victim of this reprehensible practice, please contact us. It must be stamped from a great height. Insurance scammers.

Is it time to take profits from the Scottish mortgage?

Mutual fund analysts are not known for putting the proverbial “boot in.” But it is exactly what the asset manager Investec has just done.

They put their Doc Martens into the colossal Scottish Mortgage, managed by Baillie Gifford of Edinburgh, and advised investors to sell.

The £11bn fund, the country’s largest publicly traded trust, is going through a torrid time as its focus on growth stocks and unlisted companies has been dropped – in response to higher interest rates and a faltering global economy.

It posted losses of more than 30 percent in the past two years, and Investec says worse could come as its unlisted holdings are written down in value.

Analysts are also concerned about the trust’s sizeable borrowings, which make it vulnerable to a sharp correction in stock markets.

Scottish Mortgage, says Investec, has established itself as a “flagship” investment fund and a “cornerstone investment.” Still, it now says the risks are “significant.”

Investors sitting on uncrystallized gains (probably if they’ve been in the fund for more than three years) should consider taking profits and revisiting the trust at a later date.

Ten prizes to beat the Parsons…

Paul and Patricia Parsons, from Norwich, love Premium Bonds. At the start of each month, they’re eager to find out if they’ve won a tax-free prize – ranging from £25 to £1 million.

Paul says this is the first topic of conversation when they meet friends for a drink and a chat. “Did you win this month?” Invariably, a resounding ‘yes’ is the answer.

This month’s prize draw was a good one for the Parsons, as Paul, a retired construction sales representative, liked to point out to me last week. Although I didn’t win anything, the pair took home six prizes totaling £300 – a super start to their year.

Naturally, they’re thrilled, although the big one (the £1 million prize) has eluded them. “It will come,” Paul says confidently.

Paul says the streak of wins leaves him wondering what the most Premium Bond prizes someone (or a couple) has won in a month. Paul and Patricia once won nine awards, while a friend won eight in their own name.

For the record, the maximum I’ve won is two.

So, dear readers, have you ‘surpassed’ the Parsons and won more than nine Premium Bond awards in one month? If yes, please let me know.

After talking to happy Paul, I now hope that some of his happiness has passed to me.

Nudge NS&I above price rate

Still on Premium Bonds, Peter Burrows (another enthusiast) has contacted me again asking me to give NS&I a push to increase the prize percentage again. His request has merit.

Last month I got a call from retired banker Peter to urge NS&I to increase the prize percentage. A day later (December 13), NS&I committed by raising it from 2.2 percent per annum to 3 percent.

Since that welcome move, the Bank’s base rate has risen from 3% to 3.5% – and if I’m reading the runes correctly, it will rise again by 2% to 4% in February, after the Bank’s Monetary Policy Committee of England has issued an opinion.

My view is that NS&I should announce a new 3.5 percent fare just before next month’s base fare increase.

But I could be wrong, especially given the deluge of money pouring into this savings product.