Pet Insurance - Can Insurers Penalise Claims?

flat_white_

I switched my Petplan insurance for my 3yo cat to Napo 6 months ago, as the Petplan became expensive while Napo came highly rated by Which.co.uk. Both insurances are Whole Life and relatively comprehensive on coverage. He was perfectly healthy at the time of the switch, with no known conditions (other than accidental things that have all been resolved). 

3 months after the switch, my cat was diagnosed with a long-term heart condition which will likely require ongoing care down the road. This led me to be concerned and looking at the insurance subject again, as I have heard stories of people facing massive renewal price hikes after claiming for long-term conditions.

I am curious if insurers are allowed to penalise you for claiming, even on a whole life policy? If so, it seems to be a very easy way for them to get rid of clients they do not want? I understand it is a common practice in car insurance, but none of the car insurance is whole life coverage though..

I have also noticed that PetPlan seems to say that they do not penalise people for claiming (their so-called Claims Pricing Guarantee). This was not a factor in my initial switch decision (as it was not something any of the review websites highlighted…).

If it is a major factor I have missed, I may well start looking for a safer insurer (some do take on pre-existing conditions) while he is still relatively healthy  (will likely be a lot harder..)

DullGreyGuy

flat_white_ said:
I am curious if insurers are allowed to penalise you for claiming, even on a whole life policy? If so, it seems to be a very easy way for them to get rid of clients they do not want? I understand it is a common practice in car insurance, but none of the car insurance is whole life coverage though..

I have also noticed that PetPlan seems to say that they do not penalise people for claiming (their so-called Claims Pricing Guarantee). This was not a factor in my initial switch decision (as it was not something any of the review websites highlighted…).

If it is a major factor I have missed, I may well start looking for a safer insurer (some do take on pre-existing conditions) while he is still relatively healthy  (will likely be a lot harder..)

Yes, claims experience is normal to be taken into account for any health related policy (animal or human) and PetPlan are unorthodox in stating they don't factor it into premiums. 

Ultimately you are still buying an annual policy even though its a "whole of life" set of wordings, this mainly means they won't exclude the conditions that develop during your time with the insurer as pre-existing on your next renewal. Doesn't prevent them increasing the price and costs may be prohibitive to insuring. 

If you switch now you are unlikely to find any over for your cats heart condition, some will consider pre-existing conditions but most require the animal to have been symptom and medication free for a number of years before covering it unless its something very minor. 

sheramber

Petplan are one of few who do not increase your premium if you make a claim.  

Hence their premiums tend to be  higher over all,

But if you had two dogs, same breed and same age , both would incur the same premium , even if one had claims and the other had none.

They do increase premiums in line with increased costs.

There is a reason for premiums being cheaper between one company and another.

Insurance companies are in the business to make a profit for their shareholders.  

The more you claim the more money they pay out, so they increase premiums to cover that.  

If your premiums plus excess are less than your costs then you benefitting. 

Lifetimne cover is for the conditions, not the premium charge.

flat_white_

Yeah to be honest, when I switched, i was not aware that PetPlan does not increase premiums upon claiming. If so, it would probably justify the slightly higher premium (i.e. essentially they "spread" the cost across the entire book). Kicking myself now. 

DullGreyGuy

flat_white_ said:

Yeah to be honest, when I switched, i was not aware that PetPlan does not increase premiums upon claiming. If so, it would probably justify the slightly higher premium (i.e. essentially they "spread" the cost across the entire book). Kicking myself now. 

Normally it's more than just slightly higher premiums, especially as the pet gets older, but they presumably have a worse claims experience because those pets with chronic conditions keep renewing whereas with other insurers at some point some will stop when premiums become too high. 

All insurers spread the cost of claims across the pool, if you make a £5,000 claim your premiums next year don't go up £5,000 but other insures bias the spread including claims history whereas PetPlan just use age, breed etc. 

Its one of PetPlans biggest selling points but with age increases it can still become very expensive chronic conditions or not. 

Lavendyr

I can't speak for other pet insurers as both my cats are with Petplan. I can however confirm that I have been "covered for life" with Petplan on both my cats since I have had them. In the previous policy year one of my cats, aged 7, burned through his insurance in a single hospital visit. I was paying around £26 a month that year, and his cover was £7k. In the next policy year his policy went up to £29 a month. I hve so far claimed a further £5.5k. He has been through suspected FIP to a serious liver infection and diabetes. I am relieved that I have the covered for life cover, and so far Petplan seem to have kept to their promise of not increasing premiums for claims made. They have also been remarkably quick to pay out. I cannot fault them.