Perhaps not surprising in a relatively young and still growing industry, there have been pet health insurers that do not behave in a way we at VPI find ethical. That’s why we’ve been working with regulators and lawmakers in California on a piece of legislation to improve disclosure of what’s covered and what’s not.
We think that will end some of the behavior we believe is hurting us all — industry, veterinarians, pet-owners and, of course, pets.
Earlier this year VPI learned that the California Department of Insurance (CDI) wanted to encourage the creation of pet insurance legislation. Insurance Commissioner Dave Jones wrote a pet insurance bill four years ago when he was a California Assemblyman, but the governor at the time vetoed the legislation.
VPI has been working on the new legislation (AB 2036, which you can read here) to ensure that the final bill would be favorable not only to consumers but also to veterinarians who get stuck in the middle when pet-owners don’t get reimbursed as they expected to be. Late last week, the legislation drew the attention of one of the state’s most influential media outlets, The Sacramento Bee. From the article:
The measure gives insurance regulators a greater ability to oversee the plans, but its primary focus is on making policies more transparent. It features disclosure requirements and includes a 30-day trial period during which policyholders would have the option to return their coverage.
“Consumers weren’t confident in the product they were buying,” [California State Assemblyman Matt] Dababneh said.
In an interview, he pointed to one policy’s exclusions list to demonstrate what information consumers might be missing. The list of 21 exceptions included hereditary diseases, neutering and treatment of fleas or worms. The insurance company currently has the discretion to show consumers the information upfront or not, he said. The legislation would require it.
The pet insurance industry, composed of about 10 primary providers, has by and large not taken a position on Assembly Bill 2056. But supporters of the new disclosure requirements tout a key endorsement from Veterinary Pet Insurance, the largest provider in the U.S. The company issued its first policy to Lassie in 1982.
The firm is already forthright with its clients, VPI spokesman Curtis Steinhoff said, and supports the legislation because it would create industry standards and eliminate bad actors.
“We think that it’s important to bring uniformity to policy language and disclosure,” he said. “Because there are now so many companies in the market, we felt it was important that everyone was playing by the same rules.”
Here is the entire article. Although the legislative process isn’t over, we have been able to work with other stakeholders for the benefit of all. For example, the pre-existing condition definition is close to what we at VPI suggested, and a 30-day “Free Look” period for policies has been included in the legislation. The law’s backers believes this will give consumers an opportunity to experience pet insurance and to understand better how it works. We think anything that helps consumers understand the benefits of pet health insurance is a good idea indeed.
As the legislation currently stands, we are in favor of it becoming law. We believe pet owners should understand what they are getting before their credit card information is taken. When pet-owners feel they have been deceived, they will not renew and will not recommend pet health insurance. And we think that’s a shame for everyone, because we believe in what we do at VPI.