Pet Insurance should be seen to be an essential part of pet ownership, yet it has recently been named in the Choice Shonky awards
Every year, the independent, consumer advocacy group Choice announce their Shonky Awards – their awards that name and shame the shonkiest products and companies taking advantage of Australian consumers.
This year Pet Insurance was named in the 14th Annual Choice Shonkys. And not just one brand or type but ALL pet insurance – For catch-22 pet insurance whose conditions make it worthless
How did ALL pet Insurance make it into the Shonkys?
Why? Well according to Choice “There’s a reason we’ve never recommended a pet insurance product, even though we regularly review the sector. What’s the issue? The pre-existing condition trap.”
I agree that in theory, pet insurance is a great idea and really should be a necessity to cover unexpected and potentially costly veterinary care for our much-loved pets – however, I can’t say that my personal opinion of Pet Insurance has changed much over the last five years since I wrote a couple of blog posts on the topic. While it may be harsh to call all pet Insurance ‘Shonky’ I still don’t have it for my pets.
Back in 2014 when I had pet insurance, I received a very unexpected surprise in my pet insurance renewal letter, and subsequently wrote the blog post A 52% price increase this year (or 119% over 5 years) is never going to be ok and it seems that in the subsequent 5 years, the only thing that’s changed is an explosion in the number of pet insurance products that have since flooded the market, making the choice for pet owners even more confusing.
Although I have insurance for absolutely every other facet of my life (I’m a very risk-averse person) I have never taken up pet insurance again. And I don’t plan on doing so until there are some major changes.
So why did Pet Insurance get named by Choice?
Choice recently reviewed 86 pet insurance policies (last updated May 2019) and didn’t recommend any “.. due to their many restrictions and the lack of competition in the market.” (Choice Pet Insurance Reviews). You can read Choice’s overall report here: How to find the best pet insurance policy. Will pet insurance give you peace of mind?
In nominating the Industry for a Shonky, Choice called out two main areas of concern:
1. The pre-existing condition trap which can make it impossible to switch providers
“While you’re stuck with the product, pet insurers can make any changes they like when you renew your policy every 12 months, including increasing the premiums; reducing coverage, payment limits and sub-limits; and adding exclusions. Being able to shop around and change providers is the cornerstone of a fair and just financial market. That’s why we’ve decided to confer a catch-all shonky on the entire pet insurance industry.”
2. Dodgy T and C’s
“Some products have stepped premiums, meaning the cover keeps getting costlier as your pet gets older and is more likely to require the services of a vet. With others, the benefits drop over time. Many won’t pay much for vet consultations ($300 limits are not uncommon), and some won’t pay anything at all. And if it’s an emergency, some policies won’t cover what the vet charges for out-of-hours situations, only what the costs would be during normal business hours.”
So what does this mean for your clients?
It would make sense if both the veterinary and pet insurance industry had a mutually beneficial, symbiotic relationship. But I don’t see much evidence of this.
It’s also a no-brainer that it would make things much easier if the majority of your clients had pet insurance, but with now over 86 pet insurance policies (that’s how many Choice reviewed in May 2019) all of which are underwritten by only 4 providers (as at October 2019), it appears that selecting the right pet insurance is still going to be a challenge for many of your clients.
There’s always another side to the story
Dr Andrew Spanner (Walkerville Vet) has surveyed his clients and written a blog post on the topic: Is Pet Insurance Worth It? Here’s Your Answer. In his post, he refutes many of the claims made by Choice and offers some valid arguments in support of Pet Insurance.
I’m sure you could also find many clients with stories further supporting the importance of pet insurance, but overall, it does seem to have an image problem. And with seemingly more and more pet insurance products being released onto the market and now a Shonky Award – that image problem isn’t improving.
So who’s right? And what can be done to encourage more pet owners to take up pet insurance? Are there changes that need to be made within the industry? Is it an image/branding/marketing problem, or something more serious?
I’m keen to know what you think….