We were pleased to have an objective critic like Consumer Reports review the pet insurance industry
Seattle, WA (Vocus) August 19, 2010
According to a just-released Consumer Reports review of the pet insurance industry, pet owners wanting to provide the best medical care for their dogs and cats can be confused about the need for and benefits of pet medical insurance. Consumer Reports compared nine policies from four companies against a “typical” pet’s medical needs to see how different pet insurance products stacked up. (See pet insurance comparisons.)
“We were pleased to have an objective critic like Consumer Reports review the pet insurance industry,” said Darryl Rawlings, CEO of Trupanion, one of the pet insurance companies reviewed. “Pet insurance is beginning to gain traction in the U.S.,” Rawlings said, “but a limiting factor is a degree of confusion among pet owners due to the large number of providers and a wide variety of products. With more than 10 companies providing coverage, consumers and veterinarians alike need help in selecting what’s best for their pets.” In the U.S., only one percent of pets are covered, compared with about 50 percent in the U.K.
One of the chief concerns addressed by Consumer Reports’ review was whether pet insurance premiums would ever be offset by benefits paid to reimburse veterinary bills. The review concluded the policies it reviewed “were not worth the cost for a generally healthy animal” because none would have paid out more in benefits for a healthy dog than the premiums, over a 10-year period.
“I guess we would have to agree with that assessment, at least where healthy pets are concerned,” said Craig Wallace, Trupanion’s Vice President of Sales and Marketing. “But when Consumer Reports factored in some of the major illnesses and accidents that commonly occur, pet insurance did its job and protected the pet owner from major veterinary bills,” he said. According to industry studies, one out of every two dogs and cats will suffer at least one major injury or illness during its lifetime. (See actual claims and veterinary costs.)
The Consumer Reports review also highlighted several areas where consumers should be well informed when shopping for pet insurance. Exclusions and policy limits found on some policies may mean that a policy doesn’t pay the benefit the pet owner is expecting. Also, different policies may reimburse pet owners for the same covered veterinary charges at different rates or base their reimbursement on some basis other than the veterinarian’s actual bill.
“Exclusions and limitations can be a problem with some policies,” said Wallace, “but not with Trupanion. Pet owners need to be aware that some companies exclude congenital or hereditary conditions or place limits on the amount they will pay for treatment of an injury or a chronic condition. They might even place a limit on the total coverage they will provide during the entire life of the pet."
“Trupanion has taken a pet-owner friendly approach and eliminated exclusions for hereditary and congenital conditions and does not have per-incident or lifetime payout limits,” Wallace said. “No one, not the pet owner or the veterinarian, wants to be surprised to find that a life-threatening situation is not covered or that policy limits have been exceeded.”
Consumer Reports also cast doubt on the value of so-called “wellness coverage” for pets. The review found it added nearly $3,000 in premium costs over 10 years to its test model, but paid out only slightly more than $1,000 in covered routine care. The article advised pet owners, as an alternative to medical and wellness insurance, to “add a couple hundred dollars each year to an emergency savings fund for pet care.”
“We certainly support the notion of savings accounts for pets,” Wallace said. “But given the high costs of advanced veterinary care, a couple of hundred dollars a year in a savings account won’t begin to cover a poisoning or cancer treatment or a serious hit-by-car. Those costs run well into the thousands,” he said. “It would be better to fund a pet savings account to ensure the pet gets seen regularly by its veterinarian, receives recommended vaccinations and diagnostic tests and gets its teeth cleaned regularly. Several hundred dollars spent on preventative care might avoid more costly treatments in the future.“
“Overall, we think Consumer Reports has provided some important food for thought about pet medical insurance,” Rawlings said. “It may not be for everyone and those pet owners who do want the protection it provides should shop carefully to ensure they are getting the coverage and benefits to which they are entitled,” he said. “Trupanion is a good place to start looking because we designed our policy with simplicity in mind and to provide coverage when it is needed most.”
How does one know if pet insurance is right for them? “Well,” said Wallace, “if you ask yourself the question, ‘If my four-legged family member had a serious medical condition, would I provide it the same level of care as my two-legged family member?’ and the answer is ‘yes,’ you’re a candidate.”
For more on Trupanion and pet insurance, visit http://www.trupanionpetinsurance.com
Click to read the full Consumer Reports article.
Trupanion™ pet insurance offers cat insurance and dog insurance in the United States and Canada. Trupanion™ is self-underwritten by the American Pet Insurance Company, allowing Trupanion™ to offer a simple, customizable pet insurance policy with no payout limits and 90% coverage of veterinary bills. Enrolled pets receive lifetime coverage for diagnostic tests, surgeries, and medications if they get sick or are injured, with no incident, annual or lifetime limit. Trupanion’s mission is to deliver fast, simple and user-friendly financial support to pet owners. For more information about Trupanion™, call 800-569-7913 or visit http://www.TrupanionPetInsurance.com.
About the North American Pet Health Insurance Association
Trupanion™ is a founding member of the North American Pet Health Insurance Association (NAPHIA). Founded in 2007, the North American Pet Health Insurance Association is committed to educating and promoting the values and benefits of quality pet health insurance to North American pet owners, the general public, and the veterinary community. As an association, we are committed to high standards and transparency in all of our actions and products. To learn more, visit the North American Pet Health Insurance Association website at http://www.naphia.org.