The Second Pet Gets Insurance

Last week, a friend of a friend noticed that one of her dogs seemed to be in discomfort, so she gave him three Motrin.  Big mistake. Within a few hours she was at the emergency vet clinic where she was asked if she was willing to pay for surgery to try and save her dog’s life. Two days and another surgery later, the dog passed away. The owner had run up over $6,000 in vet bills.

The very next day, the owner bought VPI pet insurance for her second dog.

She mentioned that before her first dog got sick, she had no idea that vet care could be so expensive.

This is an example of the “Second Pet” theory of pet insurance marketing.  This theory (which I just made up, but is backed by anecdotal evidence) predicts that most pet parents won’t get pet insurance until an uninsured pet runs up a very large vet bill, thereby prompting the owner to “discover” pet insurance and then buy it for the second (and any other) pet in the family.

The Second Pet theory is good news for pet insurance companies. As vet costs continue to rise, more pet parents will encounter steep vet bills and ultimately stumble upon pet insurance as a useful tool to help them manage . . . → Read More: The Second Pet Gets Insurance

Why Obamacare Covers Pre-Existing Conditions, but Pet Insurance Doesn’t

Every week I get a few emails from people with sick pets asking which insurance companies cover pre-existing conditions.  I have to tell them that none of the companies do and then explain that insurers would go bankrupt if they provided coverage for pre-existing conditions. This is because people would just wait until their pet got sick and then sign up for insurance. Very quickly, the pet insurance companies would be paying out much more than they took in and go out of business.

The new Obamacare law mandates that human health insurance companies can’t turn down a customer because of a pre-existing condition.  But won’t these companies suffer from the same problem, with people waiting until they get sick and then signing up for Obamacare?

No, because Obamacare requires everyone to have health insurance or pay a penalty.  This guarantees that there will be a large pool of people, including the young and healthy, who will help pay for the care of those with pre-existing conditions.

So the only realistic way to cover pre-existing conditions for pets would be to institute an individual pet mandate, where healthy puppies subsidize old sick cats.  And this will never happen anywhere, not even . . . → Read More: Why Obamacare Covers Pre-Existing Conditions, but Pet Insurance Doesn’t

New Pet Insurance Company: PetPremium

PetPremium, the latest entry into the US pet insurance market, opened for business last week. Within hours of opening, the company sold its first policy to the owner of a Shiba Inu puppy.

Sandy Boucher, the CEO, was previously chief marketing officer with PetPartners, the agency behind AKC pet insurance.   Frans Van Hulle, the President, also runs Revi Media, a successful lead generation company. The Hartville Group will administer the policies.

It will be interesting to see how quickly PetPremium can grow. Revi Media is a savvy online marketer that generates thousands of leads per day for other insurance categories (auto, health, disability, etc.) This background should help them compete against the established companies in . . . → Read More: New Pet Insurance Company: PetPremium

Economist Explains Why She Bought Pet Insurance

Megan McCardle, a popular economics columnist, recently wrote a column explaining her decision to buy pet insurance for her bullmastiff puppy. McCardle gives two reasons for buying her policy: 1) she thinks the cost is cheap and 2) the insurance will allow her to make medical decisions without financial considerations being a factor.

McCardle pays $60 per month for a high-deductible policy that has no lifetime limit. Some may dispute that this amount is cheap, but she feels that compared to the thousands of dollars of coverage that she now has for things like chemotherapy and transplants, it is a great deal.

But the main reason for the purchase is that she doesn’t want to have to make the difficult decision about how much to spend on vet care should her bullmastiff have a serious medical problem in the future.  I hear this quite a bit from pet parents who purchase insurance for the peace of mind it brings.

McCardle also mentions that she paid $5,000 for back surgery for her last bullmastiff. This is not surprising, as we have noticed that the pet owners most interested in pet insurance are ones who have racked up substantial vet bills with a previous pet. In fact, it is unlikely that McCardle’s primary reason for purchasing pet insurance, to avoid weighing her her pet’s life against her bank balance, would even have crossed her mind if this was her first puppy.

Prior experiences with sick pets, and the corresponding vet bills, is a reason to expect the US pet insurance market to . . . → Read More: Economist Explains Why She Bought Pet Insurance

Walmart selling Pet Insurance

Walmart started selling pet insurance in select stores in Canada.  The policies will be underwritten by Western Financial Insurance, the company behind Petsecure.  Walmart Canada has a website where pet parents can get quotes.

This type of partnership between pet insurers and consumer brands has been around in the UK for several years, with brands such as Tesco, Sainsbury’s (grocery stores) and Virgin Money (a bank) successfully selling policies that are then handled by an established pet insurance company.

In the states, PetFirst had a similar partnership with Kroger to offer pet insurance.  However, this relationship did not work out and the companies cancelled the arrangement . . . → Read More: Walmart selling Pet Insurance

Vet Jailed for Pet Insurance Fraud

A UK vet was given a two year jail sentence for defrauding several pet insurers out of £225,000. Mathew Morgan made 54 false claims against PetPlan, Petprotect, Direct Line and Sainsburys over the course of three years.

Reports indicate that Morgan created fictitious cats and, using documentation from his vet office, filed claims with the insurers for various illnesses and injuries.  All claims were in his name and used his actual home address.

So I assume the plan worked something like this: 1) pretend you have five cats; 2) buy four insurance policies on each cat; 3)  once a year file a claim against each insurer for each fake cat; 4) create phony vet bills on your business letterhead supporting the claims; 5) collect twenty insurance checks per year; 6) repeat . . . → Read More: Vet Jailed for Pet Insurance Fraud

RIP PurinaCare

Purina is getting out of the pet insurance business.   Last week, Pethealth (24PetWatch) announced that they are buying the 12,000 PurinaCare policyholders (or more specifically, they are buying the right to administer the current PurinaCare policies and the right to any subsequent policy renewals.)

The main question for PurinaCare customers revolves around renewals.  When it comes time to renew, will the PurinaCare policyholder have to switch to a Pethealth policy or do they get to keep their existing policy?   This could have real effects on customers due to the different types of coverage offered by the two companies (e.g, Pethealth has per incident limits, while PurinaCare . . . → Read More: RIP PurinaCare

Is it OK to Spend $6,000 on your Dog?

Interesting article in the NY Times about a 13-year old bichon frise who needed a $6,000 gallbladder surgery. The piece highlights two trends in pet healthcare: 1) advances in veterinary medicine allow for all sorts of life-extending options for sick pets that simply were not possible a couple of decades ago and 2) the treatment of pets as family members, deserving of pricey medical care.

Even better are the reader comments after the article.  While there are many people who complain that spending $6,000 to save a dog is a clear example of misguided priorities, the majority of the readers feel that people should spend their money on things that bring them happiness.

I have to agree with the majority.  Nobody complains when a family spends several thousand dollars to take a trip to Disney World.  So why does spending the same amount on a beloved pet cause . . . → Read More: Is it OK to Spend $6,000 on your Dog?

2012 VPI Hambone Award

This years VPI award for the most unusual claim goes to Peanut, a dachshund-terrier mix, who somehow was buried alive after a tussle with a skunk.   Peanut suffered from hypothermia and spent two days under a vet’s care.  More info on the . . . → Read More: 2012 VPI Hambone Award

Should You Get Pet Insurance?

The . . . → Read More: Should You Get Pet Insurance?