The US Pet Insurance industry is growing along with the rest of the pet industry. 2007 saw an increase of 21% from $161 million in 2006 to $195 and 2008 is expected to be even higher. Two new pet insurance companies will launch in 2008 making a total of 11 pet insurance companies in the US.
One aspect of the industry’s growth is increased awareness within the pet community. Right now lots of people don’t know that pet insurance exists and those who do are sceptical. Pickup in the pet insurance sector caused growth in the pet industry beyond its own predictions in 2007 when it topped $41 billion which is more than double the amount spent on pets in 1996. Now, the industry is looking to go mainstream with all eyes on 2008.
Currently over 2 million pet owners have existing pet insurance policies in the US. That number is expected to grow to 5-7% of all pet owners by 2010.
In a previous article we researched what US based companies exist and made some suggestions about what to consider when selecting a pet insurance plan. Now we are going to delve a little deeper into some of the plans and do a very basic and informal comparison, we are not necessarily going to read all the fine print here, just the overview. Please do not consider this comparisons as substitution for your own research. Plans are specific to your pet and individual needs which may vary. Also, plans are subject to change, the information shown here is based on the current availability and pricing.
We will start with Veterinary Pet Insurance (VPI).
We based the following pricing quotes on information from our own youngest Airedale, Phantom, who is 4 months old and used our own ZIP code in New England:
VPI offers two plan types Standard and Superior. Pricing for the Standard Plan is 11.33 + 2.00 Processing + (Optional 22.00 Premier Coverage or Optional 12.00 Core Coverage). So the minimum you could pay is 13.33 or with the Core Coverage 25.33 and with Premier Coverage 35.33. Pricing for the Superior plan is 20.50 + 2.00 Processing + (Optional 22.00 Premier Coverage or Optional 12.00 Core Coverage) which totals 22.50 or 34.50 with Core Coverage or 44.50 with Premier. Yearly the minimum you might spent on a policy from VPI is 159.96 and over a lifespan of 12 years a minimum of 1919.52. The maximum you might spent on a VPI policy is 534 annually or 6408 over a 12 year lifespan. Those numbers are based on plans for a 4 month old Airedale puppy and do not include rate increases as the dog ages.
The difference between the Standard and Superior plan according to VPI is only the annual benefit maximum ($14,000 for the Superior versus $9000 for the Standard) and the amount that they pay out for approved claims (the Superior plan will pay out more). VPI reimburses approved claims based on a benefit schedule which is dependent on the plan and sometimes depends on which state you live in (AK, HI, NY, RI, SC, and WA have separate benefit schedules than the other states) at 90% up to your annual maximum (minus your $50 deductible per incident). For each claim you need to fill out a formthat includes the specific diagnosis (you probably would need the help of your vet to complete that) and itemized receipts which you can fax back to the insurance company for reimbursement.
For comparison to other plans as we continue our review we will separate out the benefits for certain issues. According to the benefit schedule for the Standard planVPI will pay out: 92/65/44/-/65 when your dog is bit by the neighbor’s kid, 130/132/-/-/91 for Cardiomyopathy, 60/75/-/-/42 for Vaginitis a very common condition in puppies, 52/75/-/-/48 for Mastisis, 349/75/63/174:800/266 for Neoplasia Prostate-Surgical, 75/90/-/-/122 for Acute Renal Failure after you feed your dog Raisins, 52/90/-/-/37 for Lyme Disease, 70/90/-/-/49 for Epilepsy, 724/90/75/-/507 for a Cruciate Rupture-Surgical, 43/120/-/-/30 for Hypothyroidism, and -/-/-/-/44 for Euthanasia. (1/2/3/4/5 correspond to: 1 – amount for primary diagnosis condition including exam, injections, hospitalization, treatment, surgery; 2 – primary diagnostic testing max; 3 – general anesthesia limit; 4 – chemo and radiation therapy; 5 – benefit if it is a secondary condition concurrent with the primary.) The benefit schedule with the Superior planpays out: 154/131/74/-/108 for a Bite Wound, 216/315/-/-/151 for Cardiomyopathy, 100/136/-/-/70 for Vaginitis, 86/136/-/-/74 for Mastisis, 581/136/105/300:1200/407 for Neoplasia Prostate-Surgical, 346/173/-/-/204 for Acute Renal Failure, 87/165/-/-/61 for Lyme Disease, 168/210/-/-/81 for Epilepsy, 1207/152/125/-/845 for Cruciate Rupture-Surgical, 72/268/-/-/225 for Hypothyroidism, and -/-/-/-/74 for Euthanasia.
The optional Core or Premier Coverage riders cover additional services not included in the regular plans and are the same for the Standard and Superior plans. They suggest adding the Premier rider for puppies since it also covers spay/neuter or a dog that required annual dental cleanings and urinalysis while the Core rider might be better for older dogs. Premier reimburses up to $400 additional each year and Core reimburses an added $250 yearly, but those numbers include benefits for felines which are not applicable here.
Plan pricing is dependent on the dogs age. A dog over 1 year of age was charged the same rate as the puppy we entered for a quote. At 3 and 4 years the total on the most basic plan went up to 14.75. For Nimue who is 6 and an IG the cheapest plan was 17.50 monthly, same for a 6 year old Airedale. We tried adding a fake pet who was 10 years old and got an error saying that “due to underwriting guidelines” they will not enroll pets older than 10 years. So we went back and added a fake 9 year old Airedale for which the cheapest plan started at 22.08.
Once I had a feel for how the VPI plans worked and their general pricing I began adding several dogs to mimic a breeder. That took some time and there didn’t seem to be any set order to how each animal was added to my list which was confusing for the number of dogs I was adding. For each pet they selected their “recommended” coverage for the animal which was always the Superior plan with Core Coverage for each dog. I changed all of these to the Standard plan with no rider. In the end I had 11 dogs age 2 years and 2 dogs age 6 years for a total of 13 dogs, generic yes.
For each pet entered they ask for the pet’s name, species, breed, birth date, date gotten, and your ZIP which it stores after the first animal. The quote system did not mind that I entered the same birth date and date gotten on dogs, as a breeder who kept their own dogs would. They allowed me to easily remove a pet that I had made a mistake on in the information. In the end it was a really long list that required a lot of scrolling. At no time did they stop and say, “hey, are you a breeder cause we could streamline this for you.” They did allow me to save the quote for 30 days for review except but noted that if the dogs had a birthday within that time the price might change.
VPI adds a discount for each additional pet per month based on the plan that pet is on and how many pets you add. The discount for each pet was…confusing…at best. It was especially bad because they never give you a total for all the animals you add, only the total for each individual animal. The discount they note for each animal specifies an annual number even though I was viewing monthly payments. Hitting the accept and enroll button would have forced me to fill out tons of information including payment, so I don’t know how far you have to go there before they show a final total.
I did find in a knowledge database of sorts on their site a question about multi pet discountwhich was answered to the effect that a discount applies to the base plan only and is 5% for two or three pets, and 10% for four or more. That just made the matter more confusing, since the discounts they specified didn’t equal a 10% discount. I’m just not sure what to make of it. Maybe I overloaded their system and their servers are in meltdown somewhere and some geeky man is running around screaming NO DISCOUNT FOR YOU! I guess I might never know, unless I called their 800 number…so I did…oh the lengths I go to for you all.
They were unable to look up the quote I had prepared and saved via the Internet so I had them give me a quote based on the same number of dogs all on the least expensive plan with no rider two of which at 6 years old and the remainder in the 2-3 years category. They confirmed the Multipet Discount of 10% after 4 dogs and that there was no breeder discount. They also confirmed that they will not enroll dogs over 10 years but will continue coverage for dogs beyond that age who are already covered. They were very nice and humored my request for a generic quote based on my previous specifications and did not push me to purchase since I had stated I was just beginning comparisons. My quote came out to 174.58 per month, which is 2094.96 yearly. So I went back and compared this to my online quote.
As best I could tell, the final total based on the Internet quote by adding up the payment for each animal equals 181.63 per month and with a 10% discount would be 163.97 per month which does not equal what they quoted me over the phone. My best guess at the discrepancy is some sort of tax, which maybe doesn’t show on the online quote until you get to the enroll portion. This did make my eye twitch a bit since NH is mostly a tax free state.
At the risk of making my head explode I did explore the section on their website about Group discounts in which there was very little information except a very long list of companies that supposedly offer pet insurance benefits to their employees. There do not appear to be any kennels in that list. I guess you have to call to get information about that, but my hope on an affordable plan for breeders and/or small businesses is small. In their customer care section under policy discounts they do mention that employees who enroll through their employer get a 5% discount. I did not call them to discuss this issue.
VPI never asks about preexisting conditions in the quote process. Whether they do in the enrollment process I don’t know. They do specifically state on their website that preexisting conditions are not covered. Coverage is another issue entirely. The list of issues not covered is lengthy. Hip and elbow dysplasia are specifically NOT covered for all breeds of dogs and cats as well as many ocular disorders. I find it odd that the two hereditary disorders not covered for Airedales as a breed are Narcolepsy and Pannus (superficial keratitis), for French Bulldogs Histiocytic ulcerative colitis, and no breed specific items are listed for Italian Greyhounds. I mean I’ve never heard of an Airedale with narcolepsy, but maybe I’m out of the loop. Routine exams, vaccines, spay/neuter, and dental cleanings are only covered if you purchase the appropriate rider coverage. Also any conditions that result from non-covered issues are excluded. ACL surgery and management, a condition which we see quite frequently in the dogs that come to our kennel for boarding and certainly applicable to Airedales, are not covered for the first 12 months of the plan.
Overall, and based solely on this first comparison, there might be some value in having a pet insurance plan for a pet owner with only a couple animals. Puppies under 1 year that will be spay/neutered and older dogs (maybe 7+) probably would benefit the most with pet insurance. It seems that emergency situation are when pet insurance should be the most valuable, but it might also when you are charged for for the procedure if you are referred to an emergency clinic or a larger teaching animal hospital and based on the benefit schedules they only reimburse the amount they have specific for a procedure no matter who does it or where.
Since this is the first company we have looked at it is hard to compare what they offer at this point. Certainly if we need to revisit VPI down the road in order to better compare companies we will.
At this point, there does not appear to be enough of a discount to entice breeders into becoming policy holders with VPI. Another problem for breeders is that they will not cover breeding or pregnancy related issues (the reason they state is to keep plans affordable for all policyholders). For a breeder it is these expenses that cost the most and make up the majority of vet expenses. Minus breeding expenses and minus vaccinations most breeders probably don’t spend near an amount that would compare to the yearly price we recieved a quote for.
We do have one person, the same who initiated this series of articles, who is trying out VPI on a standard plan with the added premier coverage which should cover exams, vaccines, and the neuter. Their plan is for a four month old male Airedale puppy. Hopefully, they will be able to share their experience with us after they have tried it out a bit.
In case you are wondering about the state of the pet insurance industry in other countries, more than 1.85 policies are held by pet owners in the United Kingdom. The market there is worth over $495 million and 50 pet insurance companies exist there. Insurance providers range from an online grocery store, to the Kennel Club, to Blue Cross.
>>Pet Industry Trends for 2008
>>Pet Spending Expected to Top $43 billion
>>Pet Pampering and Pet Health Insurance Drive Pet Industry Sales to Another All Time High
>>ensurApet Complements Pet Insurance Plans with Publication of Breed Encyclopedia for Dog Owners (3.6.08)
>>Pet Insurance thrives in United Kingdom (3.10.08)
*Any errors in the information here are unintentional and will happily be corrected if you point them out. Information based on research conducted on March 10-11, 2008.