Pet Insurance; are Companies are robbing us blind?

Money
21

Thanks for your interest. I live in a regional town, so the values might not reflect the city situation. The insurance policy sets a demolition and rebuilding cost for the house which is equivalent to about 92% of the total likely market value of the house and land. My understanding is that I pay insurance based on this replacement cost and on the likelihood of that happening.

My first point is that the unimproved land with no house is valued at about one third of the market value and so the house might be worth two-thirds, but not nine-tenths. In fact land valuations for rates seldom reflect land sales values closely especially in a ready market such as we have now, so the notional value of the house is probably considerably less. This must indicate that building costs are for a markedly better building than the one we own.

My second point is that the chance of my house being devastated beyond repair is reflected by the proportion of houses ruined over the last 100 years or so since we have insured them. This would seem to be a small percentage of houses built, which have been rebuilt as insurance claims, which means not very likely.

I stay with this policy mainly because I have heard some good, first hand reports about my insurer and some bad ones about others. It seems that this is all very anecdotal and that there could be more transparency and oversight of insurance as an institution.

I don’t doubt lots of people have lots of different opinions but I think I pay much more than is truly necessary, so I have some sympathy for the original writer. Maybe you can explain the situation differently.

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I think you are making a mistake taking estimated values for your house, your land and your house and land from various sources and doing arithmetic to draw conclusions. You are not comparing like with like.

Just a simple example; the sum that a qualified valuer gives for your house and land is based on what the market will pay for the package. The VG value used for rates is another estimate for another purpose and as you say is usually behind the market by several years. The cost to rebuild a house from scratch (including demolition of the old house, fees etc) is another figure again as current value does not equal rebuild cost.

I also live outside the capitals where property values are lower and where the proportion of the total due to the land is less than in cities.

As for the likelihood of total destruction of a house in regional areas being lower neither of us have the data to say one way or the other. I do know that insurance premiums do vary considerably with postcode and, amongst other things, your contents premiums will be lower than if you lived in Redfern due to the lower risk of burglary and theft. The same would apply to other kinds of risk.

Outside the cities, particularly where houses were built in bushfire or flood vulnerable areas long before such things were assessed as part of building permission, there can be many houses destroyed any time there is a bad fire or flood. I don’t see you can make assumptions about insurers profiting in a low risk environment.

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23

I agree on the face of it these increases seem high but unfortunately, premiums increase annually whether you have made a claim or not (think, car, home, content, health, life travel etc etc). There is just as much age discrimination for these as there is with pet insurance.

The only recourse we have is either cancel the insurance altogether or shop around for a better deal. As someone else pointed out, most people are paying the ‘lazy tax’ because they don’t invest the time and effort once a year.

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24

@SusanCL sorry for jumping onto this forum late. Yes please feel free to name the insurer, it’s more helpful for us and everyone else here.

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25

I am referring to PetPlan/Petcover - I am investigating the new one ‘Trupanion’ - see my previous response as to reasons.
The vast majority of pet insurance customers are in the southern regions of WA - so that’s why I believe we are lower risk

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26

Ah but the question is does the insurance company differentiate between these locations?

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27

I have seen that age affects the car policy. But to double premiums at age 50 looks like close to a breach of contract.
People keep voting for the two main corporation funded parties so we have no hope of controlling the power of corporations.

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28

For Pet Insurance is this a fair outcome?
All Insurance policies expire typically annually. At that point renewal is optional for both the customer and the insurer. There is no “contract” to breech. Although we might like to think the relationship is valued, per the insurers marketing strategies. My personal view point is all insurers should be banned from making any appeals to consumers other than advertising the brand, price and policy inclusions/exclusions. Highly unlikely regardless of who is leading on the day.

Is a better industry solution a lifetime policy for your pet, assuming insurers would find this agreeable?
How would insurers cover the risks of future Veterinary cost increases, inflation, changing life saving procedures or new technology?
And would the policy holder be bound for a fixed term of day 15 years to make all payments as agreed, or fall onto debt?

It may be the current moving targets of annual renewals remains favoured by most.

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I would like to know why pet insurers put the premium up without telling you first,especially when I haven’t claimed anything

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My 2 dogs had their premiums more than doubled - despite 0 claims. I am going to move to a recently arrived new company - Trupanion. No annual limits,- any age, have arrangements for pre-existing conditions. Other funds advertise limits like $25,000 - but the sublimits (in the small print) for different conditions means your pet has to have multiple different illnesses/conditions every year to make it worthwhile.

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I agree about pet insurance,I have not submitted a claim in 2 years yet my premium has gone up twofold.I looked around for a cheaper one but there’s always a catch you either don’t get much back or to get a good amount back you have to pay excess up front. And if I do go over to a cheaper one I lose all what I’ve already paid ,I’m on a pension and find it hard what’s more it costs more that what I pay for my own health insurance

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I am sure you checked, but for the benefit of others, the company behind Trupanion brand of pet insurance is Hollard Insurance, who are the insurance company behind many other pet insurance schemes in Australia. Like Bupa mentioned in this topic, and RSPCA.
If you went into a vet it is highly likely that they would be participating in a Hollard Insurance branded pet insurance scheme.
They are an American company.

Post #15 in this topic has quite a list. Just add Trupanion.

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I believe South African origin with offices and thus business footprints in a number of countries as shown on their map. No presence in the US.

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I have not submitted a claim in

That is not how insurance works. Each policy year is autonomous unto itself and the insurer’s risk is determined by the insured’s age and health and the prospects for a claim in that single year.

Unless the insured can claim in the early years when the policy is cheap and get some value it is often better to deposit that amount in a pet health fund if needed in future. Sometimes it is a punt, but as many members discover as the premiums go up the affordability goes down, and what might be covered is usually not everything.

Others may be comforted by having the insurance just in case but need to realise what insurance is and how annual premiums are determined for anything health related.

In contrast many expect lower premiums for car insurance if they never had a claim, and never having a claim suggests a safe driver. But be it a human or pet, because one did not have a serious malady (eg cancer, hip replacements, arthritis, etc) last year does not mean they will not have it this year, and as they age the statistical chances rise for such claims with each subsequent year. I trust that helps some understand why history is not taken into account but as a business, the insurers risk of having to payout is.

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35

One of the original directors of the Hollard group is in USA now, but as you have said there is no USA presence of Hollard or it’s agents in any of the Americas (Nth or Sth). The Hollard Group remains rock solidly based in Sth Africa.

The map on the page is a representation of Hollard related business around the world

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36

Typo. Trupanion is an American company with new presence in Australia. The underwriters are Hollard.

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On a older dog (11 years) with $0 excess the monthly premium is $157.62 per month ($1,733.82 per annum), with a $200 excess the premium is $109.76 (1,317.12 per annum) and if the excess is $700 the premium is $64.48 ($773.76 per annum) . If you add in the extras of owners assistance $5 per month and Recovery care $15 per month it can make the annual cost increase by an additional $240 per annum. Breed of dog may make a difference to the quote amount, so this was just me testing an example based on the ages of some of the dogs mentioned in this thread.

Of interest, from the FAQs on their site (this was a question about whether a claim should be made if the bill is under the excess amount): “Yes! Because your excess is applied to a condition for life, you should always file claims—even if the bill is less than your excess. While you’ll still be responsible for this bill, you’re closer to cover kicking in for any future costs for that condition. And once you fulfil your excess for a condition, you won’t have to pay it again for the rest of your pet’s life”.

Trupanion Australia is purely Hollards from their disclosure:

“Trupanion Insurance is general insurance issued by the insurer The Hollard Insurance Company Pty Ltd ABN 78 090 584 473 AFSL No. 241436 (Hollard) and distributed, promoted and administered by Trupanion Australia Pty Ltd (ABN 33626393628, AR 1268213) as an authorised representative of Hollard.”

In the USA/Canada it is:

“Trupanion is a registered trademark owned by Trupanion, Inc. Underwritten in Canada by Omega General Insurance Company and in the United States by American Pet Insurance Company, 6100-4th Ave S, Seattle, WA 98108. Please visit AmericanPetInsurance.com to review all available pet health insurance products.”

It is a bit circular as a Company in that American Pet Insurance that underwrites Trupanion Inc is a wholly owned subsiduary of Trupanion Inc.

" American Pet Insurance Company is the only national Property and Casualty Insurance Company solely focused on marketing and underwriting pet health insurance in the United States. We are a New York domiciled property and causality insurance company owned by Trupanion, Inc. a provider of pet health insurance in Canada and the United States.

In April 2007, Trupanion, Inc. successfully raised $22 million dollars to purchase APIC. Dan Levitan, the co-founder of Maveron, led the round of financing. Maveron is an $800 million fund that is considered best-in-class for “consumer branded” products. Maveron has funded Starbucks, eBay, The Motley Fool, Cranium, Drugstore.com, and many other public companies."

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38

@SusanCL please name!!!

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That’s not correct. Actuaries also factor in the “:deterrent effect” to discourage owners of older pets from continuing their policies.
I had the same with my life insurance. All hunky dory till I turned 50, then the premiums rose by over 60%. There is no way my risk of dying went up by tht amount in one year. I sought answers from the insurance company but they were unable to justify the increase. I had a choice
pay up or cancel the policy. As I couldn’t afford the new premium I cancelled as do most customers I would guess.

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Woolworths, RSPCA, Medibank caught up in pet insurance crackdown

On Thursday, the Australian Securities and Investments Commission (ASIC) issued 38 interim stop orders relating to 67 pet insurance products issued by The Hollard Insurance Company and PetSure Australia across different levels of cover.
These insurance products were issued via brands including Woolworths, RSPCA, Petbarn, Guide Dogs, Medibank, Bupa and HCF. The stop orders mean affected insurers will be barred from selling their products to new customers.

Note these are interim orders. For details follow the link.

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