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Everyone knows that Americans love their pets. And we show our love by the money that we lavish on our dogs, cats, birds, and ferrets -- an estimated 15.25 billion dollars this year! Much of that money is spent on health care. And yet pet insurance is still in its infancy. (One of the first policies was written on Lassie in 1982).

But the industry is growing. And like many expanding industries, it is experiencing growth pains. Despite its obvious similarities to health insurance for humans, pet insurance is still treated as a form of property insurance. A number of purchasers of insurance for their pets have found the experience to be confusing, perhaps even misleading. Reacting to such complaints, the California Assembly has adopted new regulatory legislation governing pet insurance. The bill was approved unanimously by a vote of 78-0. If the bill is also passed by the Senate and signed by Governor Brown, California will be the first state in the union to regulate pet insurance as such.

The legislation will not control pricing in any way, but will impose certain disclosure, clarity and transparency standards. Policy providers will be required to disclose exemptions (pre-existing conditions, neutering, hereditary diseases, and flea and worm treatments are fairly common exemptions) and coverage limits up front. Purchasers will also have thirty days to opt out of the coverage. An additional improvement contained in the bill is adoption of industry-wide definitions for certain critical terms. For example, instead of each policy containing its own definition of "pre-existing condition," the bill contains a definition which will apply to all policies: a condition for which a vet has offered to consult or for which the pet has shown symptoms in the past.

With amazing new medical treatments and pharmaceuticals becoming available for our pets, costs are spiraling upward. A simple tooth extraction for a cat can cost $900, and more complicated procedures to treat cancer, orthopedic problems, or traumatic injury can cost thousand of dollars. If you are one of the many pet owners concerned about the cost of medical treatments for you pet, but are not yet convinced that pet insurance is a product you understand and can rely upon, keep your eye on this piece of California legislation. It won't cure your pet, but it will offer some transparency, policy standards and protections to consumers.

If you have any questions about pet insurance or your other insurance needs, contact Alex Pfeifer, Pfeifer Insurance Brokers, at 650-762-8070 or alex@pfeiferins.com.
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