Pet insurance companies are required to file a copy of the rates (premiums) and terms and conditions (what the policy covers and doesn't cover, what the pet owner is required or allowed to do and what the insurance company is required or allowed to do) with each state's Department of Insurance.
I've already published several in-depth articles and podcasts (links below) dealing with the problem of policyholders getting hit with significant and unexpected premium increases when their policy renews.
This article deals with changes in the terms and conditions when a policy renews. A company may make global changes to their policy's terms and conditions that affects all policyholders. Companies have periodically launched a brand new policy to replace their existing policy (usually improvements), and upon renewal, all policyholders are switched over to the new policy.
There may even be times when a company's underwriter will make changes or "tweak" a policy that negatively affect all policyholders such as removing or altering a coverage in the policy that was originally purchased. Unfortunately, there is nothing you can do about this and no way you can anticipate this when originally purchasing pet insurance. You just need to be aware it can happen.
Recently, I have noticed at least three pet insurance companies that have started unilaterally making changes to the policies of individual policyholders (usually decreasing or downgrading coverage) at renewal without authorization of the policyholder.
One company has even admitted that it is being done because policyholders have filed frequent and/or substantial claims. In my opinion, a company should never penalize a policyholder who has an unlucky pet.
Another potential reason a company might downgrade coverage unilaterally is to help mask significant premium increases (the speculation of a policyholder I read in a review). When the policyholder complained and requested her previous level of coverage be reinstated, she noticed the significant premium increase.
I have always maintained that people should purchase the highest annual maximum, the highest reimbursement and lowest deductible they can afford when they purchase pet insurance - for a couple of reasons.
First, premiums will generally go up over time and having the best coverage will give you the option to downgrade your policy (choose a higher deductible or a lower reimbursement, or as a last resort, a lower annual maximum). This will lower your premium and allow you to keep the insurance rather than canceling it because you can't afford it any longer.
Secondly, in many cases, when you upgrade a policy (raise your level of coverage) by increasing the annual maximum, raising the reimbursement or lowering your deductible, your old policy is canceled and a new policy is issued. The new policy has new waiting periods and all the conditions your pet had (even if they were covered under the old policy) will be considered pre-existing and not covered.
Usually, you are able to keep your original policy when downgrading. Your pet will just have a lower amount of coverage afterwards.
So, it's always better to have the option of downgrading a policy rather than needing to upgrade a policy when you realize the coverage level you signed up for isn't adequate.
Here's the point - downgrading your coverage should be your decision and not the pet insurance company's decision.
Look at a sample policy and/or call a company to ask about this before purchasing a policy. The Pet Insurance Toolkit has these questions included on the worksheets to help you remember and record each company's response.
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