Rocky is usually pretty responsible. The teddy bear lookalike Chihuahua-Jack Russell cross is too much of a “little old man soul” to get into much trouble. But one Sunday this April, while his owner Penny Lane was in the midst of packing for an interstate move, he vaulted from a stool to a high kitchen counter and devoured several of the chocolate brownies she’d baked for her farewell party. “I’d made them really chocolatey too,” she said.

She rushed him to Melbourne’s Lort Smith animal hospital, where he was held overnight for treatment. The bill came to $800. “I thought, it’s alright, I’ve got pet insurance.” But when Lane submitted the claim – alongside proof from previous vet appointments that Rocky was otherwise healthy – her claim was rejected.

She looked at the fine print of her pet insurance product for the first time and discovered that, although the accident insurance she purchased covered poisoning, the definition was very narrow. “I remember reading it and seeing it doesn’t cover any form of poisoning from households. And I thought ‘What the hell does it actually cover then?’ and it only covered snake bite.”

Penny had deliberately chosen a major insurer, thinking it would be free from onerous exemptions. “I was wrong,” she says. “How the hell? It just seemed like a bit of a stretch that your dog gets poisoned and it’s not covered as an accident.”

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Her experience is far from unusual. On Thursday the consumer advocacy group Choice bestowed the pet insurance industry with a dreaded Shonky Award. Of 86 pet insurance policies Choice reviewed, they did not recommend a single one. “Pet insurance is the insurance a business sells when it wants to make money without providing any service at all,” Choice’s chief executive, Alan Kirkland, said.

Choice found one insurer buried their highly narrow definitions – which did not include poisoning, falls or internal injuries – in the middle of a 45-page product disclosure statement, while another excluded illnesses for which vaccines exist, even for pets who were already vaccinated.

At present, the insurance industry is exempt from Australian law governing unfair contract terms, creating problems not just with pet insurance but with other forms of insurance too. A draft law extending unfair contract terms to insurance was announced by the treasurer, Josh Frydenberg, earlier this year.

In the meantime, Choice describes Australia’s present pet insurance options as “riddled with exclusions and technicalities”. Kirkland says “pet insurance is one of this country’s worst value insurance products. It relies on emotionally manipulating your love of your pet to sell you worthless insurance.”

That’s certainly the conclusion Rocky’s owner drew from her experience. Realising she’d spent more on insurance premiums than the cost of her uncovered veterinary bill, Lane cancelled the plan.

“It’s just surprising, I was like ‘Universe I’m trying to do the right thing here, insure my dog and be adult’… it wasn’t worth it.”