This article is written by Raslin Saluja from KIIT School of Law, Bhubaneswar. The author gives a primer on the current status of pet insurance policies in the Indian market.
The human-animal bond is no rocket science. Pets are a complete bundle of joy and are a constant source of unconditional love. They are greatly valued as companions, and easily become a part of our everyday lives. Apart from these factors, it shows that they have an immense impact on our physical health, mental well being and children’s emotional development. They also help in treatments such as occupational therapy, speech therapy, or physical rehabilitation which helps patients recover.
Since some people are more attached to their pets than others, such relationships could also be more rewarding than others. Many pet owners even consider their pets as children. Affection towards pets also helps us in gaining an immense sense of responsibility as taking care of them is not an easy task. While showering them with our love and attention is one way to go about it, getting health insurance covers to cater to their healthcare needs and expenses is another important aspect. This article attempts to give an overall insight into the concept and provides some important factors to be kept in mind while choosing the best, from the options available to us for taking care of our beloved pets.
The concept of pet insurance policy has a very long history, as it first came into existence in Sweden in 1890. By 1924, it got so famous that almost 50% of the dogs in Sweden were insured. With time, the concept transgressed into Britain and gained popularity by 1947. In 1980, North America got its first and only company called Veterinary Pet Insurance that offered pet insurances. By 2005, many notable companies had joined the market and almost 500,000 pets got their insurance in the United States. As for India, it took a while to reach us and we are just getting started.
Status of pet and cattle insurance in India
The pet insurance sector is one of the most unorganized industries showcasing very slow growth rates. Taking care of pets’ health can often get expensive, in case, any complications arise. To that end, some pet parents might even lose their pets due to their inability to meet huge unplanned expenses. Nowadays, even routine checkups, vaccinations, deworming, tick treatments alone could cost anywhere between Rs. 3500 to Rs. 10,000 per month on an average depending on the breed and their needs. Thus, even as pet parents, people need to keep their budgets flexible to meet their pet’s needs.
Pet insurance and its working
These are medical insurance policies that generally cover the costly veterinary bills. They are similar to any other insurance policy and scheme that are available in the market, but specifically designed for pets. It helps in reducing risk and covering unplanned future expenses. They tend to cover primary pet care expenses such as annual examinations, vaccination visits, spaying, neutering, regular dental cleanings, pet spas services, and other routine expenses, etc. Some also cover major illness, poisoning, accidental deaths, permanent disabilities, surgeries, hospitalization charges, property damages, and third-party bodily injury liabilities along with legal costs of defence.
They can also be customized as per the insured’s needs and would vary from insurer to insurer. Some policies even provide add-on benefits and coverage for risks of breeding, pet thefts, and burglary, permanent total disablement, accidents during transit, and the like. Still, diseases such as rabies and distemper are often excluded from the plans. The extent of coverage also depends on the specific animal which includes dogs, cats, birds, sheep, goats, ducks, honey bees, poultry, fish, silkworms, elephants, cattle, rabbits, pigs, horses, etc, the features of a breed like small, medium, and large, their entry ages, and origins like indigenous, cross-breed or exotic breeds.
There has also been exponential growth in the veterinary medical sciences over the years, and they now extend certain specialized treatments for animals, even in the field of neurology and oncology. This has increased the life expectancy of animals and in turn the costs of medical treatments. A report stated that a Bengaluru-based pet owner spent nearly Rs 30,000 on her dog for surgery to cure gastrointestinal blockage, which finally led her to buy Rs 60,000 worth of insurance coverage. Though as for India, the concept is still at a budding stage, the market of pet insurance seems to have widened and the aforementioned report is just one such instance.
Earlier only the rich and people belonging to the elite groups with fancy breeds were the ones who opted for pet insurance. However, today as more and more people get aware and acquainted with the various policies available in the market, the insurers predict a huge untapped potential in this sector. The total value of the Indian pet and cattle industry is estimated at over Rs 400 crore, and the pet and cattle insurance business is likely to boom in the coming times. Statistics show the recent increase in pet good sales, as India’s pet dog population is estimated to reach over 31 million by the end of the year 2023.
India, today has both private and public insurance services in the market. Oriental Insurance accounts for one of the premier Indian Insurance companies. United India Insurance Co, New India Assurance Co, National Insurance Co, Digit, and the newcomer Bajaj Allianz General Insurance which has recently launched its pet insurance policies are among the top key players in the market. However, due to the lack of a huge stable market, the Indian insurance policies cover replacement costs and not the routine regular care expenditure.
Features and benefits of pet insurance
- IRDA approved – These pet insurance policies and plans are approved by Insurance Regulatory and Development Authority (IRDA) like any other insurance scheme. They include a variety of pet insurance policies that are covered under this scheme, such as cattle insurance, dog insurance, horse insurance, cat insurance, etc.
- Sum assured – Generally, the norm followed in terms of sum assured for pet insurance products like dog insurance fall within the range of Rs. 15,000 to Rs. 50,000. This is contingent on the breed and other related factors. They usually have a co-payment clause which means the companies bear 80% of the insured sum, which is a certified market value as given by a veterinary doctor and the remaining 20% is to be borne by the respective pet parent.
- Add-On cover – Some insurance providers like Future Generali also offer extra benefits and covers for the base policy, for instance, the loss of show entry fee. This cover is offered for the forfeit of the entry fee for dog shows when the pet is unable to make it to the show due to a persisting injury or illness.
- Types of cover – There are three types of pet insurance cover, namely, lifetime cover, time-limited cover, and money-limit cover. Akin to other existing insurance plans, pets insurance plans abide by the age limit requirement. The usual age limit for cats and dogs is eight weeks to eight years. The cows have two to ten years and for sheep and goats, it is somewhere between one to seven years.
- Lifetime cover – This provides protection to the pets against any complicated/ long-term/critical condition of illness. Diseases such as eczema, arthritis, distemper, etc are excluded. The policyholder/pet parent who has insured their pet for a lifetime pet insurance policy receives each year a specific amount spent towards the treatment of the pet.
- Time-limited cover – This scheme as the name suggests provides financial aid and coverage to a pet only for a specified time period and covers only a particular illness or injury.
- The money-limit policy – It offers coverage benefits to pet owners in meeting the medical needs of their pets, but only up to a specified monetary range. The policyholders can avail the financial coverage under this scheme without any time constraint until the money limit is exhausted.
- Premium – Generally, according to Indian policy standards, the premium to be paid for the pet insurance policy in India is equal to 3% – 5% of the sum assured.
- Waiting period – These policies also generally come with a 30 day waiting period wherein the policy is ineffective to provide coverage in the immediate 30 days right after buying the policy.
Pet insurance exclusions
The pet insurance scheme also has certain general exclusions which are as follows:
- Where there is a willful or malicious injury to the pet,
- In the case where the injury or illness has arisen due to neglect or unskillful improper handling of the pet,
- Where the loss or injury caused is due to extreme situation of war, foreign hostility, revolution, rebellion, military upheaval, etc,
- In cases where the reason for death is rabies, distemper, Viral Hepatitis, Viral Enteritis, Leptospirosis, etc, and
- Where illness had already been contracted before buying the policy.
Other general instructions
It is the duty of pet owners to be diligent while choosing a plan which is best suited to their circumstances and pet requirements. It is for them to evaluate and make comparisons between the available options given by the provider. The process of buying a policy requires filling a proposal form and submitting a veterinary health certificate providing unique identification of the pet. All the terms and conditions must be thoroughly read and understood to avoid any last-minute casualty.
Opportunities for growth of the market
- India maintains a good rank in Livestock Wealth worldwide which provides it with an attractive opportunity to gather more cash influx and inflow of investments from the various players in the market both private and public.
- Animal husbandry is one of the major contributors as it constitutes 25.6% of total agricultural output as according to a report published by the Department of Animal Husbandry, Dairying, and Fisheries in 2016-2017.
- Further, according to the research of India’s international pet trade fair, the Indian pet and cattle industry is around 800 crore and expected to register strong double-digit retail value growth.
- As mentioned earlier, with advancements in technology and various medical alternatives, veterinary medication is going to be pricey.
- As of now India still remains among one of the lowest spending nations in terms of buying their own life insurance, therefore, expecting people to cater to the needs of cattle and pets still remains a grey area. Not to forget, the rising costs and expenditure that goes into their maintenance.
- Another reason is that it is still an unexplored area with very few competitive elements and hence due to its unorganized arrangements with low-profit yields and huge operational costs, it remains largely dominated by public enterprises.
- Unorganization has also led to low efforts of any advertisement and active promotion which has left people in general and most of the pet parents unaware of the various options of policies available in markets.
- The very few that opt for the insurance schemes are also not as satisfied as the investment, the services, and the returns of typical policies have not met their expectations. The reason behind this is having a very niche and small customer base, hence no efforts go into the new product development.
- Other reasons include the frequent Insurance frauds which remains a major concern in the insurance industry. Beyond our control, the natural environment’s irregularities and their negative impact on the profitability of insurance forms another factor. An increase in weather-related claims may put financial stress on various sectors of the insurance industry including pet and cattle insurance providers.
Thus, we understand that the market slowly but surely seems to be catching up in India. This could also be improved with the government’s involvement and initiatives to gear start the promotions and awareness campaigns. Welcoming a pet into our lives and households brings about its own set of challenges and it will be in the best interests of the pet parents to plan ahead and get their pets insured while they are young.
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