Tuesday, 17 July 2007

Can you insure against your insurer going bust?

It's not just Poodles that are experiencing injustice.
We recently ran a two part article in the magazine on how to avoid total disaster with your pet insurance. But the email I received today was much more shocking than I'd ever imagined possible.
Michelle bought a pup, Copper, and got a very good deal on her pet insurance via Dogs Today's Insurance Doctor. It was with the second oldest pet insurance company who had a very good track record - well at least they did up to that point.
Michelle was pleased she had pet insurance as Copper needed an expensive MRI scan when Copper started having mild fits. Fortunately, no treatment was needed and with some diet changes things became much more manageable - even though Copper's pupils still dilated unevenly.
Unfortunately, the insurance company had obviously set its premiums far too low. It turns out that for seven years the company had been making a loss and in its last year of trading its losses were 151%!
It stopped doing pet insurance and its 'book' of clients was taken over by another company.
The premium went up to £24.99 a month, it was a bit of a shock.
However, when the premium rocketed to £62 a month it just got far too much to cope with! Michelle said in her email:
"I cannot afford to pay this and feel extremely upset and let down. I don't have any reserves of money or savings but thought it would be all right as I had Copper insured, now I face the prospect of having to sell the my car (the only thing I have of any monetary value) if she needs any expensive treatment relating to any existing conditions. I really thought that insurance was a good idea and never thought I would feel as let down as this."
The pet insurance market is getting ever more volatile with new players coming in with too-good-to-be-true prices to entice new business. But be warned, the insurer you start out with may not be the one you end up with. Big names are dropping out as quickly as they are jumping in.
Michelle, believe it or not, was actually quite lucky.
Previously when major insurers have gone bust (or just decided to stop selling pet insurance), some of those who have made heavy claims historically have simply been left without any insurance cover at all when their insurance came up for renewal. The new insurers only took over the more profitable customers and left the rest with no cover.
Getting new insurance elsewhere with a dog with a chunky medical history is almost impossible - at any price.
I have asked the new insurance company to review this as a special case and our insurance doctor is also doing his best to negotiate a better rate for Michelle and Copper.
Michelle is understandably upset that the Dogs Today Insurance Doctor recommended a firm that subsequently went out of the business, but it seems pet insurance is now the riskiest area of insurance and almost anyone can get burned. Those who insured with the same company direct didn't have anyone fighting their corner - at least Michelle has had a middle man to try and make things better.
Apart from employing a clairvoyant, who could have predicted the second oldest insurance company in the market might go to the wall?
Fingers crossed that the new insurer will review this case favourably. I'll let you know how it goes. Let's hope we can help get a good result for Michelle and Copper.
Our in-depth insurance feature was in the June and July editions should you wish to read it. It is written with the benefit of considerable hindsight.
Poor Michelle and Copper did all the right things and don't deserve to be left without cover. Let's hope there's a bit more justice for them than for the Two Poodle Martyrs.

No comments: