Basics of Pet Insurance
People in the developed world have an affinity for pets. This is the reason why two-thirds of American households, i.e. around 80 million households have pets.
All of us are aware that the costs of healthcare are rising exponentially in America and in other developed countries such as the UK. Similarly, the cost of veterinary care has also been rising. This is the reason why owning pets has become a very expensive proposition.
It has been estimated that American households have paid over $17 billion in the year 2018 in order to obtain healthcare treatments for their pets.
Pet owners are able to bear most of the routine costs related to medical treatments for animals. However, if there is a severe illness such as cancer or if there is an accident, then the veterinary costs can escalate pretty quickly. This is the reason why a large number of people are opting for pet insurance.
During 2018, the total premium collected for pet insurance has exceeded $1 billion.
The total premium collected has been growing at about 15% every year. Experts believe that very few pets are insured as of now and the potential to sell more policies is still huge. Therefore, it would be appropriate to say that pet insurance is a rapidly growing niche in the insurance market.
In this article, we will explain some of the basics related to pet insurance.
Types of Pet Insurance Policies
Pet insurance is typically a hybrid between a health insurance policy and a property damage policy. This is because pets are living beings, but at the same time, legally they are considered to be a persons possessions.
There are various types of policies which are commonly sold. Some of them are as follows:
How Do Companies determine Pet Risks?
It needs to be understood that pet insurance is a relatively nascent market. There is a lack of data, and hence insurance companies decide the premium based on their own previous experiences. However, there are certain common characteristics that all companies look for while insuring pets.
To sum it up, pet insurance is still a nascent field. However, it is growing at a rapid rate as more pet owners are becoming cognizant of the rising costs of pet healthcare.
Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.