California's New Pet Insurance Law: Enhancing Transparency and Consumer Protection

New California Law Enhances Transparency in Pet Insurance

January 1, 2024 – A new law now runs in California. This law changes pet insurance rules. Senate Bill 1217, signed by Governor Gavin Newsom, forces pet insurers to share clear details. They must show coverage, costs, and important facts. The law also splits wellness programs from standard pet insurance.

Rising Costs of Pet Care Spark Legislative Change

Governor Newsom signed the bill because pet care costs are rising. Newsom saw that many owners face unclear insurance practices. Then-state Senator Steve Glazer wrote the bill. He wanted pet owners to choose plans with clear facts.

The North American Pet Health Insurance Association (NAPHIA) spoke out too. NAPHIA said California holds many insured pets. In 2023, the U.S. had 5.6 million insured pets. About 18% lived in California, even though the state holds less than 12% of the people. NAPHIA backed the law to create a fair market for pet insurance and to help policyholders.

Key Requirements of the New Law

1. Exclusions:
    Insurers must list exclusions with clear words. They need to show preexisting conditions, hereditary disorders, or chronic issues. If a condition is covered at first, it must stay covered at renewal.

2. Clear Disclosure of Policy Details:
    Insurers must clearly state waiting periods, deductibles, coinsurance, and policy limits right away. They cannot add new waiting periods at renewal.

3. Age and Claim Impact on Premiums:
    Insurers must tell pet owners early if premiums or coverage will change as pets grow older. They must also mention how claims or address changes affect costs.

4. Claim Payment Transparency:
    Insurers must explain how they pay claims. They need to describe the methods for calculating payments clearly.

5. Exam Requirements:
    If a veterinary exam is needed to start a policy, insurers must say so. They must give details about the exam. Renewals cannot require a new exam.

6. Coverage Specifics:
    Insurers must list the specific diagnoses and illnesses that their plans cover. This detail is especially important for plans that use a benefits schedule.

Differentiating Wellness Programs from Insurance

The law also makes a clear split between wellness programs and pet insurance. Many consumers confuse the two. Wellness programs cover things like annual exams and vaccinations. They do not cover injuries or illnesses. SB 1217 stops insurers from marketing wellness programs as regular pet insurance. Insurers cannot force pet owners to join a wellness program to get insurance.

Conclusion

California’s SB 1217 takes a strong step to protect pet owners and clear up insurance details. The law demands clear disclosures and draws a line between insurance and wellness programs. This change helps consumers make better choices about their pets’ health care.

For any individuals who wish to share their experiences or insights regarding pet insurance or wellness programs, you can contact personal finance columnist Jessica Roy at Jessica.Roy@sfchronicle.com.

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