Pet health insurance soon to come from Lemonade

Posted: 6 February 2020 4:59 pm
News

Dog covered with a blue blanket

The socially conscious homeowners and renters insurance provider is likely a few months away from launch.

The pet insurance market is about to become a little more crowded. Lemonade, the AI-driven home and renters insurance hub, has announced it will be getting into the business of protecting “fur babies.” The company, subject to regulatory approval, will likely launch the new policy in a few months.

“Many at Team Lemonade, myself included, are devoted pet parents, so we decided to build the dream pet health insurance product for our best friends,” said Shai Wininger, COO and co-founder of Lemonade, in announcing the new product. “Many of us think of our pets as family members, yet so few of us take the important step of getting them health insurance. We challenged ourselves to create a product that will close this gap and make pet health insurance affordable and accessible.”

While little is known about Lemonade’s upcoming pet insurance program, the company has distinguished itself in its homeowners and renters insurance businesses for its flat premiums, its quick claim process and its commitment to donating underwriting profits to charities of the policyholders’ choice. The company’s customer service relies on chatbots and AI, meaning that insurance purchasing and settlement can be done quickly, efficiently and without human bias or error.

What to expect from pet insurance

Pet insurance covers surgical and medical interventions that your cat or dog may need. These can include routine veterinarian visits, emergency treatment, and hereditary or genetic disease treatments. A pet insurance policy can help pet owners avoid the tough decision to put down treatable pets due to an inability to pay for expensive procedures.

However, like human health insurance, pet insurance can have limitations. Older pets may have more expensive plans or may be limited to accident-only plans. Most plans have a minimum of a 10 percent copay with an annual limit. Pre-existing conditions may also not be covered.

Typically, pet insurance premiums average about $45 for dogs and $25 for cats, with discounts available for multiple policies. With treatment for common diseases such as acute kidney failure for a cat costing up to $15,000 per year, the savings could quickly add up.

Pricing can vary wildly among the dozens of insurance companies that offer pet insurance, with PetFirst offering premiums starting at $9 per month for cats and $15 per month for dogs, and 24PetWatch offering $20.99 per month for cats and $42.45 for dogs.

When choosing a pet insurance provider, it’s important to ask:

  • If the deductible and copay are adjustable
  • What services and procedures are covered
  • If you can choose your veterinarian or must use one in-network
  • If pre-existing conditions covered
  • Whether your premiums increase as the pet ages

Plenty of need for pet insurance

With two-thirds of Americans being pet parents, there is a large and previously untapped market in pet assurance. Less than 2% of cats and dogs in the United States are insured.

Furthermore, it is estimated that 70% of Lemonade’s customers are pet owners. Dogs, for example, can significantly affect the risk assessment of a home for insurance purposes, both due to their roles in deterring burglaries and in the potential increased risk of personal injury due to biting or mauling. With approximately 90% of Lemonade’s customers being first-time-residence insurance buyers, many have relied on their dogs as their first lines of security.

Picture: Supplied

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