I was left with an £8,000 vet bill when my insurer cancelled my pet policy

"Looking back, it was a very basic package that didn't cover much at all," he says.

He now puts around £25 a month – roughly the cost of his previous policy - into a separate bank account, which he plans to put towards the cost of any future vet bills.

"Even if I've not got the full amount, at least I've got something towards whatever that amount could be," he says.

Insurance expert Kara Gammell, from MoneySuperMarket, says reviewing policies regularly is important and urges consumers to look at how claims can affect future costs to make informed decisions.

Jackie Fawcett and Stephen Neild, from Manchester, also cancelled their policy in favour of putting money aside each month.

They say their annual quote jumped after their 14-year-old cockapoo, Tilly, underwent tests and treatment following a tooth removal.

"There were no surgical procedures or anything like that," says Neild, who called the price hike "exploitation". The couple now has what they call a "rainy day fund" for any future treatment for Tilly.

Tesco Pet Insurance, who provided the cover, says "the cost of claims is one of a number of factors that can affect the price of a policy at renewal" and also noted Tilly's age had been reflected in the quote. It says the couple had a more comprehensive policy, which typically costs more than basic levels of cover, and that alternative options were presented to Fawcett and Neild.

A record-breaking 4.6 million pet owners took out insurance in 2024, when payouts by members of the Association of British Insurers topped £1bn for the third consecutive year.

While the amount being paid out is going up, the consumer group Which is concerned about what it calls "shady stuff going on in the industry".

"Companies aren't being clear enough with consumers about what the product is that they're buying, about what it covers," says Lisa Webb, a lawyer for Which.

"Insurance companies love to use long documents, policies with wording that doesn't make any sense, that get you bogged down, so by the time you start reading it, you feel like you can't finish."

She says more and more people are looking to self-insure their pets, but warned it requires "quite a lot of discipline" and that it is not the norm.

Other consumer advice bodies warn self-insuring options can also be risky, as savings may still not cover a big bill. They point out most insurance policies also include public liability insurance, in case a pet causes an accident or gets into a fight.

In 2020-21, the ombudsman says it received 1,440 new complaints about pet insurance. That number rose by 59% in 2024-25 to 2,286 - 42% of complaints dealt with during that time were upheld.

Which says the rise coincides with greater scrutiny of the industry after a recent investigation into vet prices by the Competition and Markets Authority found prices have risen at nearly twice the rate of inflation.

It's not just dog and cat owners with issues. Julian Gold says he's struggled to insure his guinea pigs because the small mammals are classed as exotic pets and therefore have higher premiums.

His three-year-old guinea pig, Remington, had surgery for a bladder stone. The total bill for the animal's treatment came to more than £3,000 - but his pet still died the day after.

He says he wishes he had insurance to cover Remington's treatment, but he did not take out a policy because "it's hard to get a sensible quote".

"If it's £20 a month and you have five guinea pigs who live five years, then that's £6,000 you'll be paying in insurance over that five years."

He thinks there should be "a group insurance policy" available for small animals like his.

The ABI, which represents insurers, says record pet insurance payouts have been "driven largely by the rising cost of veterinary care" and reiterated the importance of choosing the right cover.

"With some treatments costing thousands of pounds, the right insurance can offer real peace of mind during what can already be a stressful time for owners," it added.

The FOS says customers often feel claims "have been unfairly rejected" and reiterated the importance of insurers making policy terms transparent. It urges pet owners unhappy with their insurers to raise an official complaint and, if there is still no resolution, to contact the ombudsman.