Scammers eye fast-growing pet insurance market: Internet Scambusters #1,116
Pet Insurance is growing fast in the US, and since only a small proportion of us actually already have coverage, it’s a mouthwatering target for scammers.
In this week’s issue, we’ll tell you about the most common scams and what you must do not only to avoid the fraudsters but also to get the right coverage for your pet’s needs.
We also have a new alert about fake Botox injections and unlicensed or inexperienced providers.
Let's get started…
How To Stay Safe When Buying Pet Insurance
Some people say buying pet insurance is a scam. We’re not here to argue about that, but what we can tell you is that if you do decide to insure the health and safety of your furry, feathered, or scaly friend, there are plenty of fraudsters out there ready to take your money for no benefit at all.
And, with an estimated 87 million pet-owning households in the US, the vast majority of whom don’t currently have insurance coverage, it’s a great opportunity for the crooks.
Furthermore, because pet ownership is often an emotional, trusting experience, it may be easier than usual to trick people when their emotions are high and their guard is down.
The 3 Types of Pet Insurance
It’s important to know that pet insurance is not a one-size-fits-all thing. There are basically three types – for health, for (end of) life, and for injury.
And then, within each classification, there are different levels of coverage. It’s a bit like human auto and health insurance – with considerations such as comprehensive, hospitalization, pre-existing conditions, waiting periods, bereavement counseling, and so on.
You need to know this when you decide to buy – what type of coverage do you need?
Most Common Pet Insurance Scams
Most pet insurance scams involve tricking owners into buying coverage that either doesn’t exist or has so many get-out, small print clauses that it’s virtually worthless.
As usual, you often see the fraudsters advertising on social media or pushing their names up to the top of online browser searches. They can target their ads too since so many of us love to post photos of our pets.
Here are the most common tricks to look out for:
- Fake Policies: Fake pet insurance policies usually look exactly like the real thing, often with emotive photos, promises of great coverage, and incredible testimonials praising the provider. They may also use stolen photos, celebrity endorsements, and official (or official-looking) logos of animal welfare and insurance organizations.
- Misleading coverage: As with fake policies, some so-called “pet insurers” make all sorts of wild promises about the scope of the protection they provide. They may also appear to offer extremely low premiums. But when you need to file a claim, you discover the coverage is strictly limited or that your claim falls within some vague exclusion clause. You may be offered the opportunity to “upgrade” your coverage for a significantly higher amount.
- Unlicensed Insurers: The licensing of pet insurers is a bit of a gray area. According to insurance education organization A.D. Banker, some states allow organizations to operate with very limited coverage, while others can offer a full range. But then, there are the scammers who skip the licensing process altogether and just set themselves up as insurers. Even if they do provide a level of coverage, usually at a lower price than elsewhere, you’ll have no recourse if things go wrong.
How to Protect Yourself From Pet Insurance Scams
As we’ve suggested above, the first step toward getting the right coverage for your pet insurance is to know exactly what level of protection you want. And then, as always, the key is to do your research based on those companies that appear to provide what you want.
That includes verifying the legitimacy of the insurer by checking for proper licensing and accreditation. You can do this via the North American Pet Health Insurance Association, the National Association of Insurance Commissioners, and consumer organizations like the Better Business Bureau. In particular, the NAIC has some great information about checking out insurance companies, not just those dealing with pets.
You must be prepared to spend a fair amount of time to look closely at the scope of coverage, the exclusions, the limits on claims and benefits, and the extent to which the policy aligns with your pet’s needs and medical history.
As always, beware of spectacular coverage promises and low premiums. You can get either of these from legitimate insurers but you won’t get both!
Finally, talk to neighbors, family, friends, and other pet owners, asking for their recommendations. Sadly, you can’t rely much these days on testimonials that appear in ads, even, sometimes from reputable companies who naturally choose only the better or best reviews to publish.
Because the pet insurance market is growing fast – it leapt more than 17% last year and is worth more than $5 billion a year – and because pet ownership is so close to our hearts, we look like sitting targets to scammers. So, when you decide to protect your pet, be sure also to protect yourself.
This Week’s Alert
Botox scare: Around 20 people from several states say they’ve suffered bad results after being injected with fake Botox by unlicensed providers, according to the US Centers for Disease Control and Prevention (CDC). Always check the license of any provider you’re planning to use, the experience and qualifications of staff, and the authenticity of the product.
That's it for today – we hope you enjoy your week!