New York pet owners may soon see a change in their pet insurance policies. Legislators recently passed a law that establishes industry standards in the state and gives New York’s Department of Financial Services oversight of the industry.
The law requires pet insurers operating in New York to follow newly established disclosure obligations, prohibits waiting periods for accident coverage, and bans marketing wellness programs as part of pet insurance or as a requirement for buying pet insurance.
“This bill ensures that there are standards within the [pet insurance] industry that have already been adopted in other states,” Assemblywoman Pamela J. Hunter, who sponsored the bill, told Insurify. “For example, pet owners might be marketed a pet wellness product and not understand that there is no coverage for veterinary procedures. This legislation ensures a level of quality for pet insurance and provides for easily understood disclosures on what a policy covers.”
The bill passed both houses of the state legislature in the legislative session that ended in June and is waiting on Gov. Kathy Hochul’s signature.
New law’s provisions
The new law establishes uniform definitions for pet insurance terms and a number of disclosure requirements, including whether a policy excludes pre-existing conditions, hereditary disorders, congenital anomalies, or chronic conditions.
Additionally, the legislation:
Requires insurers to disclose waiting periods, deductibles, co-insurance amounts, annual or lifetime policy limits, and whether an insurer reduces coverage or raises premiums based on claim history, pet age, or a change in location.
Provides a 30-day refund period for new policies.
Bans waiting periods for accident coverage and limits waiting periods for illnesses and orthopedic conditions to 30 days. Insurers must also provide a waiting period waiver if the insured pet has a medical exam.
Prohibits requiring a medical exam for policy renewals.
Requires insurers to disclose their benefit schedules and how they calculate usual and customary fees if those are part of their reimbursement policy.
Bans insurers from marketing wellness programs as part of pet insurance. Insurers also can’t make participation in a wellness plan a condition for getting pet insurance.
New York is among the first states to begin regulating pet insurance, North American Pet Health Insurance Association (NAPHIA) spokesperson Samantha Bell told Insurify.
Impact on pet owners
Hunter, who currently serves as vice president of the National Conference of Insurance Legislators (NCOIL), said New York’s law follows model legislation from the NCOIL. “Uniform standards will be good for the pet insurance market and should improve policy availability, pricing, and quality,” she said.
NAPHIA believes “that effective regulation will provide standards leading to increased certainty for pet-owning consumers, policy-holders, and the pet insurance marketplace,” Bell said. “Regulation can help grow the marketplace for pet insurance because it fosters an environment that leads to increased competition and the development of more innovative pet insurance products to suit the needs of many different pet owners and their pets.”
At the end of 2023, New York had the second-largest number of insured pets in the U.S., representing 7.5% of all pets insured, NAPHIA data shows.)
What’s next
Gov. Hochul has until the end of 2024 to sign legislation passed during the 2024 legislative session, which ended in June. The act will go into effect 180 days after the governor signs it. The new regulations will apply to all new, renewed, and modified or amended pet insurance policies in New York.
“I encourage all cat and dog owners to get pet insurance,” Hunter said. “A bigger pool will help in assessing and mitigating risks. Most pet owners, like myself, see their pets as a member of their family. We would never want our children or other loved ones to go uninsured, and pet insurance is an easy way to have the same peace of mind when it comes to our pets.”
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