Companies Respond to New Pet Insurance Report

In the wake of a new pet insurance report and ratings compiled by non-profit Consumers’ Checkbook, several companies have released statements in response to the report. Read the report here and responses below.

From Pets Best:

"A few important things to consider that when thinking about if pet insurance is ‘worth it’: 

-More and more people with pets treat their pets like family, and care for them like family
-Americans spend over $17B on their pets, a big portion of that is for veterinary care
-Like humans, pets live longer and with advanced technology we are able to treat more conditions than were treated in the past, increasing the cost of pet health care
-The US, unlike many countries in Europe, lags in Pet Health Insurance adoption
-Only ~1-2% of pets in the US are insured, vs over 25% in the UK
-Pet insurance isn’t just about the coverage for catastrophic issues
-Over 1/3 of all Pets Best claims are from Wellness plans. Pets Best policy holders find a lot of value in add-on, routine care wellness plans. These plans were not factored into the comparison in the articles mentioned
-Pets Best offers a 24/7 pet helpline so that you can focus on providing care for your pet at home vs. having to take them to the vet as often – a true convenience for any pet owner.

Lastly, like almost any insurance product, it’s a choice that helps provide peace of mind in the case that something unforeseen happens. Many pet owners view themselves as ‘pet parents’ and wouldn’t hesitate to spend thousands of dollars on pet health care. No one can predict when an issue might arise in a pet, but a lot of people want to know that if something happened, they would be covered. Pets Best has paid over $175M in claims, and has over 100,000 pets insured. We can attest that many pet parents are finding value in pet insurance."

From Trupanion:

"At Trupanion we are driven by our desire to help the pets we all love receive the best veterinary care, for the life of a pet. As noted by Consumers Checkbook, Trupanion’s coverage stands out because we price pets based on their age at which they enroll. Unlike competitors, we do not automatically increase pricing simply because the pet gets older. In fact, we encourage our members to enroll their pets as puppies and kittens so they remain in this pricing category for the life of their pet. Not boosting premiums as pets age is just one way that we are able to offer one of the lowest lifetime premium costs to our members." 

From ASPCA and Hartville:

“The recommendation decision the report uses, while done responsibly, is based on an assumed health scenario for a dog or cat. Unfortunately, this is not real life. The benefit of pet health insurance is that when you need it – when your dog breaks a leg or swallows a foreign object – it’s there to help.”

From Nationwide:

"While saving money for pet emergencies is always a good idea, pet insurance may be a better option for many pet owners. If a pet sustains an injury or an illness, especially early in life, a pet owner’s pet savings account may not have the money accrued to cover an expense that can easily run into the thousands of dollars. With Nationwide pet insurance, you will not only have coverage from day one of the effective date of your policy to cover any and all eligible veterinary expenses, but that coverage will continue for the life of your pet as long as the policy remains in force. 

With tremendous advances in veterinary care, many medical procedures that are done for humans can now be done for our pets. As such, these procedures can be very expensive, running into the thousands of dollars for either short term or extended treatment that may continue for months or years. For many pet owners, a pet savings account may not be enough to cover the cost of advanced veterinary care."

From Embrace Pet Insurance:

"At Embrace Pet Insurance, our brand promise is to deliver genuine support and certainty when pet parents need it most. We provide sincere emotional and financial support to pet parents, strive for certainty, and encourage them to understand their policy. Embrace’s policies are the most customizable in the industry to match an affordable annual premium for a pet parent’s budget while offering the same comprehensive coverage on every accident and illness policy. All policies cover alternative therapy, behavior care, breed-specific conditions, cancer, and more. 

We find that this series of articles both misleading and inaccurate. The goal of purchasing pet insurance is not to make money, it’s to protect yourself if your pet ends up needing expensive veterinary care. Beyond that, the fact that they didn’t account for the rate increases by Healthy Paws Pet Insurance and Trupanion Pet Insurance is deceptive to pet owners who will believe their premium will remain the same throughout the pet life. Finally, while trying to compare policies apples to apples they missed the importance of comprehensive coverage and customizable policies. 

The article 'Is pet insurance a smart purchase?' determined that for the pets with low and moderate levels of care, the pet parent was better off not buying pet insurance. However, the fact of the matter is that there’s no way to know what level of care your pet will need when they are a puppy or kitten. We all hope our pets will be in the low range, but we can’t be certain. Just like you don’t purchase home owner’s insurance hoping your house will catch on fire, you don’t buy pet insurance hoping your pet will be plagued by expensive accidents and illnesses – but it could happen. You do it to protect your finances and because you’d do anything for your pet. Because a monthly premium is more affordable than an $8,000 surgery and because you want the best care for your pet, but you don’t want to go into debt giving it to them. It’s not about coming out net positive, it’s about being prepared for the worst. 

The article also takes a lot of liberties when it comes to estimating premium increases. The fact is Trupanion and Healthy Paws premiums will increase over time. Trupanion’s website states that the “average cost of pets like yours” will cause your premiums to change. A Trupanion premium is customized to a pet based on the several factors, including the average cost of care for similar pets, which include breed, region, and age. For example, for a three-year-old Boxer in Chicago, the annual premium will be affected by the trends Trupanion sees in their data from hundreds of three-year-old Boxers in Chicago. 

Healthy Paws warns customers should expect rate premiums to increase slightly from year to year due to rising cost of veterinary care. Numerous online customer reviews complain about rate increases, so Consumer Checkbook’s calculations are inaccurate when it implied that the low premiums that Healthy Paws and Trupanion charged when they enrolled Woof and Kitty as two-month-olds stayed at that level for their nearly 13-year lifespans. 

Beyond these inaccuracies, the article fails to take into account other differentiating benefits for the pet parent. Key areas of how we differ from our competitors to the advantage of the pet parent that may not be obvious in an apples-to-apples quote comparison are: 

-Embrace covers exam fees in a pet parent’s reimbursement. Healthy Paws and Trupanion do not cover vet’s exam fee. When a pet insurance company doesn’t cover the exam fee, it’s almost like paying an extra deductible on every single claim you file. Embrace thinks you should be reimbursed for every part of your visit, not just some of it.

-Embrace uses an annual deductible, while Trupanion uses a per-condition deductible. An annual deductible only needs to be met once per year, regardless of how many claims you make. Plans with a per-condition deductible require you to pay a new deductible every time you go the vet for a new condition. If your pet has an unlucky year, your out-of-pocket costs could be higher by a few hundred dollars with a per-condition deductible.

-Embrace offers a Healthy Pet Deductible, so a pet's annual deductible automatically goes down by $50 each year that a pet parent does not receive a claim reimbursement.

-Embrace offers pet parents the option for a Medical History Reviews when they enroll so a pet parent can feel confident in their pet's coverage. It's essentially a complete assessment of a pet's health history from an insurance perspective. We recommend a medical history review if a pet has experienced any illnesses or injuries before they purchased your policy, so the pet parent knows exactly what will and will not be covered by the policy.

-Unlike most of our competitors, we offer Wellness Rewards, a wellness plan which can help pay for routine care services that pet parents use every year with no per-item limits. It works like a Health Savings Account and Embrace contributes about 13% to the program.

Finally, to determine the annual premium for Embrace, the cost-benefit analysis used a $200 annual deductible and reimbursement of 90 percent of covered vet bills in an attempt compare our policy as closely as possible to our competitors. However, if we were advising a customer about policy for a mid-sized neutered mixed breed dog in a high-income neighborhood used in the analysis, we would recommend a plan with a $500 annual deductible, 80% reimbursement, and a $10,000 annual benefit limit. This is our most common plan and while this policy may have the pet parent paying a little more in the event of a claim, they’ll pay a lot less over the life of their pet. That’s why our customizable coverage works, it allows the pet parents to assess their risk and budget without sacrificing coverage for things like alternative therapies and exam fees. 

Ultimately, the articles miss the mark due to their limited scope, inaccuracies around premium increases, cost of veterinary care, and policy features. I would be happy to clarify any of the remarks above if you have additional questions. Thank you for allowing us to respond."

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