Insurance for Pets a Fast Growing Market (Update)

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Guardian Liberty Voice has updated this article to reflect that the company, Pets Best, was established in 2005. GLV apologizes for previously incorrect information.

In the days of Obamacare, when more than two-thirds of the number of humans eligible for coverage under the Affordable Care Act remain uninsured, the U.S. is seeing insurance for pets as a fast growing business, with many big players in the human healthcare market beginning to offer plans for four-footed family members. At this time there are only about 2 million purchasers of the policies, a mere 2 percent of pet owners, out of approximately 50 percent of U.S. households that have pets.

Some major players in the human insurance industry are beginning to collaborate with pet insurers, including Farmers Insurance, the American Association of Retired Persons (AARP) and Safeway. It is becoming big business. The Trupanion pet policy went public in July at $10 per share and now trades at about $8.50. Fairfax Financial Holdings Ltd. is in the process of acquiring Pethealth Inc., the second-largest pet insurance in North America, for $2.79 per share, or $100 million. Two days after the Pethealth sales announcement, the Industrial Alliance Securities Inc. predicted revenue could rise to $52.2 million in 2014. According to the North American Pet Health Insurance Associations (NAPHIA), the market is growing fast at a currently estimated $595 million. NAPHIA is an organization made up of pet health insurance associations in the U.S. and Canada

Pet insurance costs about $30 to $35 per month on average, with the price depending on the level of coverage and the age and breed of the pet. Accident-only coverage might cost as little as $10 per month, but comprehensive policies that include preventive care might be as much as $15,000 per year. Since preexisting conditions are never covered, pet owners are encouraged to buy when their pet is young.

Last year Americans spent nearly $56 billion on pets, with veterinary care making up about $14 billion of that. Some pet vet bills are comparable to human medical costs. For example, according to NAPHIA, the most expensive pet claim paid in 2013 was $40,606 for a 3-year-old female border collie mix with hip dysplasia. The owner of a 1-year-old male Rottweiler with pleural effusion paid $36,485. Treatment for a 6-year-old male Siamese cat with inflammatory bowel disease cost $17,685.

Association with human organizations such as AARP, which is collaborating with Petplan, is raising awareness for pet insurance. Farmers Insurance is offering Pets Best. Pets Best was established in 2005 by veterinarian Dr. Jack L. Stephens. Stephens also founded the first pet insurance in 1981, with a mission of ending euthanasia due to pet owners being unable to afford treatment.

Kristen Lynch, Executive Director of NAPHIA, says people have a hard time comprehending that their pet could run up a vet bill that is as expensive as the cost of a luxury car. However, for many people their pets are part of the family and it is difficult to not treat them. As with any insurance it is a gamble as to whether it will ever be needed. The fast-growing market for pet insurance indicates that increasing numbers of pet owners are considering it a worthwhile risk.

By Beth A. Balen

Sources:
The Globe and Mail
Kiplinger
PR.com
philly.com
Virtual-Strategy Magazine
insurancenewsnet.com
Huff Post

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