This might explain why only 20% of the 6.5m households with dogs take out insurance for them. But these owners could be leaving themselves facing big bills, with the average cost of treating a dog involved in a road accident a wallet-busting £379.

Monica McCormack of Tesco Pet Insurance says: 'Last year, one in three of our pet insurance customers had to make a claim.'

Martin Ring at Pinnacle Pet Insurance says it is important to look beyond the cost and check the quality and extent of cover. 'Not all providers offer cover for life,' he says. 'This means that if your dog's condition requires treatment for more than a year, or beyond a certain financial amount, then cover ceases. If the premium is cheap, then cover is probably restricted.'

Pinnacle offers lifetime cover, provided the dog does not have an existing condition. Mary Ings' decision six years ago to insure her new-born labrador retriever puppy Monty, has proved to be the right one. Since moving into Mary's home in Dawlish, Devon, Monty has spent a lot of his life at the local vet.

Monty has skin allergies and joint problems that are likely to last his lifetime and they require regular, expensive treatment. Insurance with Pet Plan means that all vet bills are covered. Mary pays £14.50 a month, but had to meet a £90 excess on her first claim.

'I dread to think how much Monty would be costing me without insurance,' says Mary, 49, who is divorced and has a grown-up family. 'Monty has regular injections to suppress the allergies and he also has to take a dietary supplement.

'Every few months, I get a bill for anything between £400 and £500. Thankfully, I can pass it straight to Pet Plan.'

Mary has a Pet Plan budget policy that covers lifetime conditions up to a value of £4,000 a year, while its standard plan pays up to £6,000 annually for each condition. The company's Supreme plan offers unlimited cover.

Standard cover with Tesco pays up to £2,500 for each condition, but only for a maximum of a year. Its Extra policy offers lifetime cover, but with a ceiling of £4,000 per condition.

Direct insurer More Than has a range of policies, including a lifetime policy that covers conditions for life up to £4,000 a year.