Washington State is trying to tame poorly regulated pet insurance

Image: Allie Carl/Axios

The pet insurance market is growing fast, but remains largely unregulated in Washington state.

Why It Matters: State regulators say about 3% of US pets are covered by health insurance policies, a number they expect to rise quickly.

But compared to human health insurance, few rules govern what pet insurance must cover and how companies must explain their policies to customers.

What’s happening: A bill in the Washington state legislature would set new standards for pet insurance coverage, including definitions of what is considered a pre-existing condition that may warrant claims being denied.

What They Say: State Rep. Amy Walen (D-Kirkland), the sponsor of the bill, told Axios that businesses can currently charge for pet insurance while offering very little coverage.

During a recent committee hearing, Walen noted that pets do unpredictable things, like swallowing toy parts — “and that’s a risk we should be able to cover.” Among other changes, her bill would eliminate the waiting times some pet insurance policies impose before they cover accidental injuries.

Context: In the past five years, the Washington office of the Insurance Commissioner has received 159 complaints involving pet insurance, agency Axios said.

Many of the recent complaints have been about premium increases upon renewal. In other cases reviewed by Axios, pet owners were told that an animal’s previous medical problem represented a pre-existing condition, leading insurers to deny their claims.

Enlarge: A Seattle pet owner appealed when his insurance company said his dog’s previous ear infection excluded coverage for a new bacterial skin infection on the dog’s stomach.

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After the Office of the Insurance Commissioner got involved, the company reversed its refusal and paid for the treatment.

Details: Under the bill before lawmakers, insurers could deny health coverage to a pet because of a pre-existing condition only if it is “directly” related to the new condition.

The legislation would not limit annual increases in pet insurance rates. But to do that, companies would have to make it clear to customers that the premiums can increase as the animals get older – or if the owners move.

Between the lines: The Insurance Commissioner’s office is joined by pet insurance companies — including Seattle-based Trupanion — to support the legislation.

David Forte, senior policy adviser at the Insurance Commissioner’s Office, said that while the bill is the result of negotiations between the industry and regulators, it still offers significant protections for pet owners.

What’s next: Versions of the measure have been passed by the House and Senate committees and could soon receive votes in both houses.