As a broker or an agent, it’s your responsibility to ensure that your clients and their families are protected. That includes life, home and auto insurance, as well as insurance for all the valuables your client treasures.
There may be one branch of the family tree, however, that you are neglecting — one that could prove to be an expensive omission: the family pet. Your client’s dog or cat or other pet is often an important part of the family, and if it gets sick or is in an accident, your client will want to do whatever is necessary to nurse the animal back to health.
Veterinary fees for dogs and cats can range from $14 for simple nail clipping to thousands of dollars if surgery and a lengthy stay in an animal hospital is involved.
“You never know when an accident will happen,” says Dr. Andrea Chapim, executive member of the Ontario Veterinary Medical Association, who operates her own small-animal practice in Ajax, Ont., east of Toronto. “Common injuries, such as getting hit by a car or ingesting a foreign object, require treatment. And those treatments may be expensive.”
The cost of treatment when a pet is hit by a vehicle depends on the severity of the injuries. But even relatively uncomplicated treatment that requires hospitalization and monitoring can start at $500. When surgery is required, the bill can amount to more than $2,000. Illnesses, such as cancer, are more expensive to treat because of the length and complexity of the treatment. “Pet insurance removes some of the decision-making when a pet is ill or injured. It allows people to provide the proper treatment without having to worry about the cost,” Chapim says.
Monthly payments
Insurance for pets works much the same way it does for pet owners. The client makes a monthly payment, either by way of a credit card or a pre-authorized cheque, to the insurance company. When a veterinarian’s services are needed, the client submits a claim to the insurance company. If the claim is covered, the client can expect a cheque in the mail.
Pet insurance varies according to the type of coverage. A basic plan for a cat, for example, can cost $13.95 a month and provide coverage of up to $2,000 per illness category, including car accidents and surgery. Other plans offer higher benefits at higher premiums.
The concept is relatively new in Canada but popular in Britain, where it is estimated that 20% of household pets are insured. In the U.S., about 2% of pets are insured.
“Right now, we’re still at less than 1% in Canada, but we have more than doubled in the past year,” says Darryl Rawling, president and CEO of Vancouver-based Vet Insurance, a national pet insurance company. “The average Canadian doesn’t have the kind of disposable income to pay for certain treatments. [If] we’re talking about a pet that’s part of the family, people will forgo mortgage payments and annual vacations in order to take care of their pet. Insurance offers a good alternative.”
Vet Insurance started when Rawling and a colleague built on their passion for taking care of animals and saw a niche in the insurance industry they believed needed filling. “The [pet insurance] competition is not fierce right now. Our biggest competitor for this type of product is awareness, and that’s growing dramatically. It’s a young industry in Canada that has a very strong growth curve,” he says. There now are two other national companies, Oakville, Ont.-based PetCare Insurance Brokers Ltd. and Winnipeg-based Pet Plan Insurance.
Ross Totten, president and CEO of South Western Group in London, Ont., the intermediary and program administrator of Vet Insurance, believes brokers will come to find the product attractive.
However, advisors shouldn’t expect to retire early by selling pet insurance, says Totten. Because the concept is new and companies need to keep costs down to attract customers, commissions for brokers are thin — but they do exist.
The best way to make money off pet insurance policies is through group insurance programs. Specific groups, such as company employees, can become a target
market.
With Vet Insurance, for instance, commissions are negotiable, and Totten is unable to nail down an exact structure because it’s dependent on so many things, such as group size and policy type.
“Some people will buy this product and see it as a value because they’d rather pay a small monthly premium than face large costs,” Totten says. “Others believe nothing is going to happen to their pet so they’re not going to believe in a concept like Vet Insurance. But if you’ve advised them that this service exists, you’ve done your job in taking care of the client. That’s what’s important.” IE