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August 15, 2022 at 03:53 PM
What You Need to Know
- Regulators classify pet health insurance as property and casualty insurance.
- The new model could shape state requirements for pet insurance policy terms and policy term disclosures.
- The model could lead to a big expansion in the use of commercial pet health insurance by helping pet owners understand what policies really will and won't cover.
A new regulatory framework could help your clients do a better job of planning for their pets’ health care expenses.
The National Association of Insurance Commissioners last week approved the Pet Insurance Model Act.
What It Means
The model could lead to a big expansion in the use of commercial pet health insurance by helping pet owners understand what policies really will and won’t cover.
Pet cost planning is an important component of overall financial and retirement planning that’s easy to overlook.
Today, vitamins and routine care cost an average of about $368 per year for the typical U.S. dog and $301 per year for the typical cat, according to American Pet Products Association survey data compiled by the Insurance Information Institute.
Surgery can cost $458 per procedure for a dog and $201 for a cat, and insulin for a pet with diabetes can cost $1,200 or more per year.
Some owners spend far more. About one-third of dogs get cancer, for example. Chemotherapy for a dog with cancer can cost several thousand dollars per year, and radiation for a dog with cancer can cost $7,000, according to the Cornell University College of Veterinary Medicine. Some owners spend more than $10,000 on treating their dogs’ cancer.
The Pet Insurance Market
The North American Pet Health Insurance Association estimates that only about 4.4 million of the 175 million North American are covered by pet insurance.
That’s up from 3.4 million in 2020, but still represents just 2.5% of U.S. pets.
Owners are spending an average of about $640 per year on premiums per covered pet.
