Is your pet paying the price of insurers’ exit?
Last year Lloyds and Halifax unexpectedly pulled out of the pet insurance market, leaving some pet owners who had bought ‘Lifetime’ cover policies without any chance of decent cover for vital vet bills.
Pet insurance, like most types of insurance, is designed to cover unexpected costs and give you peace of mind.
Unfortunately hundreds of pet owners risked being left without cover late last year when several big pet insurers unexpectedly pulled out of the market.
That’s not a huge problem if your pet is healthy and hasn’t had any major illnesses in the past – you simply switch to a new insurer. But the move has made it impossible for some pet owners to get like-for-like cover in the future. And worse still, there is nothing they can do about it.
The pre-existing condition conundrum
Like other types of insurance, such as private medical insurance and income protection, when you take out a new insurance policy most insurers won’t cover pre-existing conditions.
So if your pet has a chronic condition like diabetes or arthritis, switching insurer usually means that these conditions will no longer be covered. By contrast, for existing customers the best pet insurance policies will continue to cover existing conditions for as long as you pay the premiums.
And that’s the heart of the current problem. If your insurer backs out of the market, like Lloyds and Halifax have done, you’ll have no choice but to switch, and thereby lose cover. Customers who have been paying extra in premiums for years for ‘lifetime’ cover policies could be hit worst of all.
Who should be responsible?
These insurers’ exit from the market reveals a flaw in the insurance system. Insurers are not held accountable when they leave their customers without cover, even where policyholders have been paying a high premium for the extra peace of mind.
In the worst case scenario some people may not be able to afford the right treatment for their pet, while some may even have to have the pet put down if the cost of treatment is too high. To me, this is both unfair and unacceptable.
Has your insurer left you in the lurch? Do you think an insurer should be responsible for organising alternative cover or paying compensation when it decides to leave a market?
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