Pet Insurance Outlook for 2023 – Forbes Advisor

Pet insurance is rapidly gaining popularity. What was once an obscure insurance product has more than doubled in growth over the past four years, according to the North American Pet Health Insurance Association’s (NAPHIA) 2022 State of the Industry Report. There were nearly 4 million insured pets in the United States in 2021, a 28% increase from the previous year.

Here are some key trends to look for in 2023, whether you’re familiar with pet insurance or just curious about this growing product.

Regulators call for consistency between pet insurance plans

Pet insurance is regulated state by state, which means insurance laws can vary from state to state.

In an effort to bring more consistency to the pet insurance market, the National Association of Insurance Commissioners unanimously approved the Pet Insurance Act in August 2022. Regulators in Insurance companies in each state can now adopt the law as law in their state or change it and make it their law.

If states enact it, pet insurance law requires certain disclosures to purchasers of pet insurance, such as:

• A period of “free research” and a right of refund within 15 days of purchase if you have not made any complaint.
• Pet insurance companies may exclude coverage for pre-existing conditions, but the onus is on the insurer to prove that the pre-existing condition applies to the condition for which the claim is made.
• Prohibits a waiting period for accident coverage.
• Allows a waiting period of up to 30 days for orthopedic illnesses or conditions not resulting from an accident.
• Requires a provision to waive the waiting period if the animal is examined by a veterinarian.
• Prohibits the requirement to have your pet examined by a veterinarian before policy renewal.
• Prohibits any requirement that the animal participate in a welfare program before the owner can purchase a policy.

State regulators can modify the model law

The idea behind the Pet Insurance Act is that it presents the ideal law from a regulator’s perspective and that each state can choose to adopt it or add its own flavor to it, says Kristen Lynch, executive director of NAPHIA.

“We’re hoping states will adopt it, because it took three years to create and it’s easy for the consumer to understand, but that’s not always the case,” says Lynch.

For example, the Pet Insurance Act requires a “free visit” period of 15 days. But some states might reject this deadline and impose a shorter period, or even no period of free examination. Other states may have a longer free search period, such as California, where a 30-day free search period is required for pet insurance buyers.

Or state regulators may choose their own definitions of a pre-existing condition, which can have a major impact on your pet’s insurance costs. Under standard law, a pet insurance company must state what constitutes a pre-existing condition and when your pet developed the condition. But how a state interprets the model law can have a huge impact on pet insurance buyers, Lynch says. What is considered a pre-existing condition in one state may not be considered a pre-existing condition in another state.

The bond between people and pets will have a big impact on the pet insurance industry

There are pets in 70% of U.S. households, according to the American Pet Products Association’s National Pet Ownership Survey 2021-2022. That’s over 90 million households. And since pets have become part of our daily lives, it’s not uncommon for pet owners to take their pets to work, restaurants, and even movies.

Lynch predicts that strengthening the bond between people and their pets will drive growth in the pet insurance industry as more people put the health of their pets first.

“We’re here for the fun stuff, but we have to be prepared for the tough stuff,” says Lynch.

For example, if your pet gets sick on a Saturday night, chances are you won’t be able to talk to your vet. Many pet insurance plans include access to a 24/7 pet telehealth line. Or if your pet gets injured or ingests a foreign object on a Sunday after- noon, a pet insurance plan can help offset the costs of an emergency vet visit.

To put that into perspective, the average cost to treat a broken bone is $2,700 for dogs and $2,300 for cats, while the average cost to treat ingested foreign bodies is $3,500 for dogs. and $3,400 for cats, according to a Forbes Advisor analysis of the vet visit. costs.

Having pet insurance can help take the financial and emotional stress out of treating your pet, Lynch says. This may be the key factor if you can afford to treat your pet instead of taking a big hit on your credit card or, worse, foregoing treatment altogether.