Pet Insurance Act’ Passes Senate, Cuts Through Increasing Costs and Transparency Concerns and Heads

TRENTON – The Senate passed legislation sponsored by Senators Vin Gopal and Joseph Cryan to enact the "Pet Insurance Act." The bill will bring a long-awaited regulatory framework for pet insurance in New Jersey that counters the increasing costs, now having a more significant impact on pet owners, while improving transparency and consumer protections. 

"Without proper regulation, pet owners are left vulnerable and uninformed," said Senator Gopal (D-Monmouth). "For too long, insurance companies have been able to operate without sufficient oversight, leading to unjustified rate hikes, deceptive advertising, and policies with convoluted terms that are nearly impossible for consumers to fully understand. This bill will establish necessary standardizations and hold insurers accountable, ensuring that pet owners are no longer left in the dark and that they can access clear, fair, and affordable coverage." 

Pet insurance has become more popular over the last few years as owners seek economic relief from rising veterinary bills. Like traditional health insurance, pet insurance reimburses owners for some of the cost of veterinary care for illness or injury under their policy and charges a monthly premium. However, premiums have risen dramatically recently and become a budget burden for most families." Pet owners shouldn't have to sacrifice their pet's health for their financial health," said Senator Cryan (D-Union). "Long enough, these companies have had the unregulated power to raise premiums at whim, restrict coverage at will, and bamboozle consumers with less transparent policies. This bill will make it transparent and protected so pet insurance can be fair and affordable, not a money-sucker." 

The bill addresses an urgent need for reform, as the lack of consistent regulation has allowed pet insurers to take advantage of consumers. According to a 2019 National Association of Insurance Commissioners (NAIC) report, the industry has been plagued by misleading advertising, varying definitions of pre-existing conditions, and different reimbursement models that complicate and increase the cost of claims. 

Under Bill S-2034, pet insurers have to reveal key facts about policies in advance, which are usually concealed in small print or misleadingly presented, such as:

• If a policy does not pay for certain conditions 

• Policy provisions that cut back coverage by way of waiting periods, deductibles, or annual or lifetime limits 

• How an insurer determines claim payments 

• If premiums may be increased or coverage cut back based on age or claims history 

• The length of waiting periods and qualifications for coverage    

  
  

The bill would also establish tight standards for excluding pre-existing conditions from coverage under the insurers, requiring them to prove that the pre-existing condition is relevant to the claim. 

S-2034 passed in a 37-0 vote.