Calif. to increase consumer protection for pet insurance

By Emily Miller

This week the state of California signed a new bill into law that was directed at adding essential protection for consumers purchasing pet insurance.

The law, AB 2056 (Dabahneh), was signed by Governor Brown on October 1, 2014 and made it the first law of its kind in the nation. With this new law, pet insurers will be required to disclose important information regarding their policies, standardize definitions, and provide consumers with a 30-day “free look” period.

It was also supported by a number of animal welfare organizations – such as the Humane Society of the United States, American Society for the Prevention of Cruelty to Animals and various other organizations.The bill was sponsored by Insurance Commissioner Dave Jones and will go into effect July 1, 2015.

Under the new law, pet insurers will be required to disclose baseline information regarding their policies – such as reimbursement benefits, pre-existing condition limitations, and a clear explanation of limitations of coverage including coinsurance, waiting periods, deductibles, and annual or lifetime policy limits.

A major change will include the 30-day “free look” period, which will allow consumers to return a policy for a full refund within a 30-day window if it doesn’t fit their needs.

“California consumers will not have greater protection when they purchase pet insurance,” said Commissioner Jones in a press release. “In the state with the largest number of insured pets, once again California is leading the way by becoming the first state in the nation to enact a law that adds consumer protection to this rapidly growing line of insurance.”

Commissioner Jones praised Governor Brown for signing the bill and giving Californians piece of mind when it comes to protecting their pets in a press release.

It is estimated that by 2015 the pet insurance industry will reach $750 million as Americans are spending more than $15 billion each year on veterinary care.

The driving force behind AB 2056 was complaints that Californian residents presented before the California Department of Insurance, as they wanted more transparency when purchasing pet insurance. Now consumers will have a better understanding of what they’re getting for their money.

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