Consumer group CHOICE has given Petcover’s Economy pet insurance policy a 2026 Shonky Award. CHOICE argues the policy resets every year, so owners lose cover for illnesses and injuries their pets develop while insured - Petcover, however, says that description is wrong.
The policy has an unusual connection to the broking industry. Under its March 2025 product disclosure statement, Economy is underwritten by Sovereign Insurance Australia and administered by Petcover Aust. The same document says Petcover is a member of the Steadfast Group and subscribes to the Insurance Brokers Code of Practice. That makes this more than a consumer story for the broking community.
Pet insurance has made the Shonkys before. In 2019 CHOICE gave the award to the entire Australian pet insurance industry, mainly over how insurers handled pre-existing conditions. In 2011 the whole insurance industry received one. This year CHOICE picked out a single product, and it says this one is worse than the policies it criticised in 2019.
CHOICE’s main complaint is that Economy customers are effectively sold a new policy every 12 months. The PDS still calls the process a renewal, but its definitions work differently from a normal renewal.
The PDS defines each “period of insurance” as separate, and says it does not refer to any earlier period. A condition counts as “pre-existing” if it showed up before the policy’s commencement date. At renewal, the insurer may add exclusions based on previous claims and the pet’s veterinary history. Taken together, CHOICE says, this means a condition treated in year one can be excluded in year two, even though the owner never changed insurer.
The definition of pre-existing is also wide. The wording treats a “clinical sign” as any change in a pet’s normal healthy state, bodily functions or behaviour. The exclusion then covers any condition that has the same diagnosis or clinical signs as something the pet had before, or that is related to it.
CHOICE gives the example of a cat treated for pancreatitis, which usually shows up as vomiting and refusing food. That cat could later be refused cover for a completely different illness that causes the same symptoms.
There are also time and money limits:
CHOICE focused on the drop to a 65% payout at age 10. The first reduction, at eight, has received less attention. It applies at exactly the age group Petcover says the product is designed for.
CHOICE’s pet insurance expert Daniel Graham summed it up this way: “Basically, you’re covered until you have something that needs cover.”
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Petcover has publicly rejected CHOICE’s description of the policy. It says Economy is designed for pets over eight and that no other policy offers this kind of cover to pets that old.
The wording partly supports that. Under the March 2025 PDS, cats and dogs can be insured from eight weeks old up to their ninth birthday, and select breeds only up to their fifth. In practice, an eight-year-old pet has a 12-month window to join, which backs up Petcover’s point that older animals have few alternatives. But the same eligibility rules mean the policy can also be sold for puppies and kittens. The restrictions CHOICE criticises then apply for the whole time those pets are insured.
The structure also runs against the direction of the rest of the market. According to CHOICE’s buying guide, most insurers now cover a new customer’s pre-existing condition if it has been fully cured. Chronic conditions are still excluded.
PetSure made one of the biggest changes in 2020. It revised how pre-existing conditions are treated across its partner brands, removing exclusions on temporary conditions once a pet has gone 18 months without symptoms. Most of the market now applies a fixed symptom-free period before cover returns. Economy instead adds new exclusions as the pet gets older.
Pet insurance is a small but growing line. Zurich’s Alex Morgan has estimated the Australian market at more than AU$1 billion in written premium. Most policies are sold direct to consumers or under a partner’s brand, so few go through a broker.
The PDS also shows how Petcover is paid and how it finds customers:
There is plenty of room for the market to grow. Animal Medicines Australia’s 2025 survey found pets in 73% of Australian households, or about 31.6 million animals. Yet RSPCA Pet Insurance’s figures suggest fewer than one in five pet owners have a policy. In a market that depends on winning over people who don’t yet buy cover, one heavily publicised product can damage trust in the whole category.
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People who follow the Shonkys will recognise the issue. Last year HCF won an award for closing an existing health policy and opening an almost identical one, which let it avoid the government approval process for premium rises. CHOICE calls this “product phoenixing”. In 2024, nib was awarded a Shonky for overcharging single parents.
The HCF and Petcover cases involve different products and different harms. What links them, in this writer’s view, is that consumer advocates are now looking closely at whether insurers are issuing new contracts where customers expect a renewal, and what policyholders lose when they do.
That raises a legal question. Unfair contract terms protections have applied to consumer insurance contracts entered into or renewed since 5 April 2021. However, ASIC’s guidance says terms that define the main subject matter of a contract fall outside the regime, and only a court can decide whether a term is unfair. It has not been tested whether a pre-existing condition definition this broad counts as subject matter or as a term that could be challenged.
There is also a question of whose side Petcover is on. The PDS says that when Petcover arranges this cover, it acts as the insurer’s agent and not the customer’s. That sits uncomfortably beside its stated membership of a broker network and code. Brokers and their professional bodies may want to ask how the two fit together.
Read next: PetSure amends stance on pre-existing conditions
CHOICE’s usual advice is to insure a pet while it is young and healthy and never switch. With this policy, CHOICE says the reverse applies: because conditions drop out of cover each year anyway, staying with it offers no advantage.
For advisers comparing pet products, or handling referral arrangements that include them, the award points to five things to check in the wording:
These details rarely appear on a quote page, but they decide whether a claim is paid.
CHOICE chief executive Monique Perry said this year’s awards show that cost-of-living pressure has not stopped questionable business practices.
