Not All Pet Health Insurance Companies are Regulated

Dennis' Diary: Part 4

Unlike some of our competition, VPI and our underwriter, National Casualty Company, are “admitted” insurance companies. 

This means our products are fully vetted, or examined, by each of the 50 State Departments of Insurance (DOI) for the policyholders’ protection. 

Not All Companies are Regulated by the DOI

In comparing VPI to our competition we encourage pet owners to inquire if their insurance products are “admitted.”  If they are offered on a “non-admitted” basis it means they were not approved by State Insurance Departments.  Therefore, you are depending solely on that company’s opinion that its products are priced to ensure solvency and guarantee it will be there to pay claims. 

No Governmental Oversight

Non-admitted companies can write a policy most any way they want and they can generally charge whatever rates they want. No one from the DOI is checking.  If they become insolvent, no state guarantee fund will step in.  The reason a carrier might want to be non-admitted is because it is writing insurance to cover a high risk or specialty market. 

As a general rule, non-admitted carriers are supposed to offer insurance that is unavailable in the standard (admitted) market.  Keep in mind that if the insurance company cannot meet its financial obligations, admitted products, such as VPI’s, are guaranteed by the state.  Non-admitted products do not carry this same guarantee.

“Non-admitted companies can write a policy most any way they want and they can generally charge whatever rates they want. No one from the DOI is checking.”  

Is Regulation Important?

Some people may not think that regulation is very important. How often do insurance companies go out of business, anyway? In the case of pet insurance, the answer may surprise you. In the last 26 years, VPI has seen more than 50 competitors come and go. Unfortunately, some of these companies were not admitted and left pet owners with no coverage to show for months of premiums paid.

The worst part is that some of these pets could not then be insured by other, more reliable companies due to pre-existing conditions. So, as you can see, non-admitted products may be a gamble. 

At VPI, we always strive to do what is right for our policyholders regardless of any regulation.  However, customers can feel confident that all of VPI’s current and future consumer insurance products are approved by all 50 State Insurance Departments.

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