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Nebraska state senator proposes legal framework for pet insurance

LINCOLN — Insurers will have a clearer framework for creating pet insurance policies in the state through a proposal in the Nebraska Legislature.

State Sen. Beau Ballard of Lincoln introduced Bill 296the Pet Insurance Act, which will provide a legal framework for the policies and consumer protection for the growing industry.

The North American Pet Health Insurance Association reported in 2022 that the industry exceeded $2.83 billion in value at the end of 2021, growing more than 30% from the previous year.

The bill’s consumer protections mirror those for health insurance policies, including required disclosures about whether certain services are excluded from coverage, if there are any waiting periods, what the benefit schedule is for the policy, how a pet’s pre-existing conditions may affect insurance and facility training requirements for insurance producers.

Pet insurance consumers may use their policies more often than other types of insurance, although the cost is usually lower. The average policyholder files a pet insurance claim 1.5 times a year, Ballard said.

Rising healthcare costs

Ballard said he adopted his cocker spaniel, Cosmo, last March and takes him for a walk every morning, which is “one of the highlights of the day.”

He told the committee that if Cosmo required significant care, Ballard would have to decide whether to pay high costs for that care.

“Much like other things in life, vet costs are skyrocketing,” Ballard said. “And this (type of insurance) provides some comfort for consumers that they can get insurance and then pay for those unexpected events.”

Industry experts provide support

Michelle Muirhead, assistant vice president at Physicians Mutual Insurance Company in Omaha and testifying for the Pet Insurance Association, said her company began offering pet insurance in August 2022.

Muirhead said it comes after nearly three years of working with the National Association of Insurance Commissioners, Nebraska Department of Insurance, veterinarians and others on how to design the policy.

She said the bill would allow pet owners to pay for the medical treatment their veterinarian recommends, not what they can afford on a given day.

The policies, with average monthly premiums of $50 for dogs and $32 for cats, primarily cover accidents and illnesses, including cancer, infections, bone fractures, digestive issues, ear infections or allergies.

“At the end of the day, the industry wants consumers to be satisfied with their pet insurance purchase and the coverage we provide,” Muirhead said.

Robert Bell also testified in support of the Nebraska Insurance Federation and American Property Casualty Insurance Association, explaining how pet insurance acts like a health and life policy, even though pets are technically property.

That, Bell said, requires a different level of consumer protection.

“I’m just glad I can create legislation where I can bring him [Cosmo] up in testimony, which is always a great, great opportunity,” Ballard said.

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