California Enacts Law to Enhance Pet Insurance Transparency
On September 26, 2024, California Governor Gavin Newsom signed a bill designed to increase transparency in the pet insurance industry. The legislation, introduced by Senator Steve Glazer as SB 1217, aims to empower pet owners by providing clearer and more accessible information about their insurance policies.
The primary goal of the law is to help consumers make well-informed decisions when choosing pet insurance. This is achieved by requiring pet insurance companies to clearly disclose key policy details. The requirements include:
- If a policy excludes pre-existing conditions, hereditary disorders, congenital anomalies or disorders, or chronic conditions.
- How coverage might be limited by waiting periods, deductibles, coinsurance, or policy limits. The law specifies that waiting periods can’t apply to renewed policies.
- If coverage costs more based on claims history, the pet’s age, or any change in location.
- What, if any, medical exam is required to purchase a pet insurance policy. These exams cannot be required for policy renewals.
- The distinctions between pet insurance and wellness programs. They must have separate marketing materials and are not permitted to be marketed as pet insurance. The bill also states that the price for wellness programs must be kept distinct from the cost of a pet insurance plan, and a wellness program cannot cover services already covered under a pet insurance plan.
Additional Legislation
Along with the pet insurance transparency bill, a second bill was signed into law. This new law allows California veterinary schools to develop a certification program. Its goal is to make spay and neuter services more affordable or free.
In a press release regarding the new legislation, Governor Newsom stated, “Every pet deserves a home – and every home is happier with a pet – but the rising costs of pet care and the growing number of animals in need of adoption present real challenges. California is addressing both issues: reforming the pet insurance industry and supporting efforts to meet the high demand for accessible spay and neuter services to address overcrowding in shelters.”
Potential Nationwide Impact
Changes to California law often have an impact on national trends. Because of California’s large population, companies may find it simpler to implement policy changes across the country rather than to comply with varied regulations. The pet insurance industry has generally had limited regulation, with varying state requirements. This new California law may cause pet insurance companies to alter their practices in a way that affects the rest of the country.
What Pet Owners Should Do
Regardless of where you are, understanding the details of your pet insurance policy is essential. Before purchasing any policy, you should know the costs, any exclusions, and reimbursement procedures to understand what to expect when filing a claim.
While California’s new law mandates more transparency, it’s always wise to carefully review the fine print to ensure that a specific policy meets your individual needs.
