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ombudsman news

issue 65

October/November 2007

disputes involving pet insurance

Pet insurance is generally designed to help pet owners cover veterinary bills and other related treatment. But it can also cover many other pet-related expenses which may arise - for things such as holiday cancellation, emergency repatriation or quarantine.

The following selection of cases shows how we have dealt with some recent complaints involving pet insurance.

issue 65 index of case studies

  • 65/1- pet insurance - incorrect date of diagnosis on claim form results in insurer refusing claim
  • 65/2 - pet insurer refuses claim on grounds that policyholder "failed to take reasonable care"
  • 65/3 - pet insurer refuses to meet hydrotherapy claim because treatment not carried out by a vet or registered member of a relevant association
  • 65/4 - pet insurance - claim rejected because it related to a pre-existing condition
  • 65/5 - pet insurance - claim rejected because policy limited cover for treatment of any one condition to a 12-month period
  • 65/6 - pet insurance - administrative error prevents policyholder renewing policy before it lapses

pet insurance - incorrect date of diagnosis on claim form results in insurer refusing claim

Mrs F had been worried about her dog, Herbie, for some time. In early July 2005, after a number of visits to the vet, Herbie was diagnosed with arthritis. Mrs F submitted her pet insurance claim immediately, and it was accepted under the terms of the insurer's "premium policy". This was the cover Mrs F held at the time, and it provided a maximum benefit of £4,000 (less any excess).

In July 2006 the vet gave Mrs F a continuation claim form to send to the insurer - for Herbie's long-term treatment. This said the condition had first been treated in November 2004.

The insurer refused to pay the claim. It said that in November 2004 Mrs F had only a basic insurance policy in place (with a maximum benefit of just £1,500). The insurer had already paid out more than this, so it said it could not make any further payments for Herbie's arthritis treatment - and that any future arthritis-related claims would be excluded from the policy.

Mrs F was unhappy with this. She said Herbie's condition had not been diagnosed until July 2005. By then, she was covered by the premium policy, so she thought the insurer should continue to cover Herbie's arthritis.

She backed up her complaint with a detailed letter from the vet, confirming that Herbie had not been diagnosed with arthritis until 22 July 2005.

The insurer still insisted the claim should be dealt with under its basic policy. It said it would not ask for the "over-payments" it had already made to be returned, but it refused to make any further payments or to meet any further claims for the cost of the arthritis treatment. Mrs F then brought her complaint to us.

complaint upheld
When we investigated the case, we found that the second claim form - sent to the insurer in July 2006 - had been completed by the head veterinary nurse, not by the vet who had actually treated Herbie and who had completed the earlier forms. Mrs F said the nurse had clearly made a mistake when giving the date of the diagnosis.

The evidence suggested that although Herbie was indeed first seen by the vet in November 2004, no diagnosis had been confirmed at that stage. It was not until the return visit in July 2005 that further investigation led to the diagnosis of arthritis.

Having considered all the evidence, including correspondence from the vet, we believed that Herbie had been diagnosed with arthritis in July 2005. We asked the insurer to review Mrs F's claim under the terms of its premium policy and to pay her any amount it owed her under the terms of that policy.

pet insurer refuses claim on grounds that policyholder "failed to take reasonable care"

Mrs D was a keen fund-raiser for a local charity, and often took her horse to various outdoor fund-raising events for children to ride. Unfortunately, on the morning of the town's summer fair, Mrs D's horse-box overturned after becoming detached from the vehicle towing it. The horse was seriously injured, and after it had been examined by two vets it had to be put down.

Mrs D later submitted a claim for the veterinary fees she had incurred - and for the value of her horse. Initially, the insurer made an offer which would only cover the veterinary fees. However, when it received its loss adjuster's report, the insurer discovered that the horse had injured his leg in a similar accident two years earlier.

The insurer then withdrew the offer (which had not yet been formally accepted). It said it doubted Ms D's trailer had been roadworthy and it believed she was in breach of the policy condition "to take reasonable precautions to prevent accidents, illness, loss or damage". It also stated that she should have disclosed the first accident at the time she renewed her policy.

Mrs D was unhappy that the insurer had withdrawn its offer. She thought it should meet her claim for both the veterinary fees and the value of her horse, so she brought her complaint to us.

complaint upheld
We had to consider whether Mrs D had breached the policy condition that required her to take "reasonable care". In order to reject the claim on these grounds, the insurer had to demonstrate that Mrs D had been "reckless". It had to show that she had realised there was a risk involved in transporting her horse but had either taken no steps to avert it, or taken steps she knew were inadequate.

We found no evidence that she had been aware of the problem - that the tow-bar was corroded. Showing the trailer to be unroadworthy would not be sufficient to demonstrate Mrs D's recklessness. The terms of the insurance policy did not require her to keep the vehicle in good condition. And in any event, she had borrowed the vehicle - it was not hers. We accepted that Mrs D had not appreciated the trailer was in a poor state of repair.

We noted that when Mrs D renewed the policy, the insurer had asked her to disclose "any material fact". Mrs D told us that the earlier injury to the horse had been so minor that it had never occurred to her to disclose it. In our view, her failure to disclose the injury had been inadvertent, rather than reckless.

We told the insurer it should meet Mrs D's claim for both the veterinary fees and the value of her horse.

pet insurer refuses to meet hydrotherapy claim because treatment not carried out by a vet or registered member of a relevant association

Mr and Mrs J's dog, Ruby, was very fit and active until November 2003, when she suffered a prolapsed disc. Her veterinary surgeon recommended a course of hydrotherapy. This would help Ruby to regain the use of her hind legs as well as assisting with her rehabilitation in general.

Mr J told us that he had checked the proposed treatment with the insurer and was told it would be covered. Ruby responded very well to the hydrotherapy. However, when Mr and Mrs J submitted the claim, the insurer refused to meet it.

It said that - unless the treatment was carried out by a vet or a member of the Canine Hydrotherapy Association (HCA) or other relevant association - the policy specifically excluded "the cost of hiring a swimming pool, hydrotherapy pool or any other pool or hydrotherapy equipment". The insurer said that although it had previously paid similar claims, it would not do so in this case as neither the hydrotherapist nor the veterinary nurse were members of the HCA.

complaint upheld
We understood why the insurer did not routinely approve all hydrotherapy claims. However, we noted that Ruby's treatment had been recommended by a qualified veterinary surgeon. The clinical evidence made it clear that the hydrotherapy had contributed to her recovery and that she had derived significant benefit from it. We also noted that the therapy had been administered by an experienced veterinary nurse - the only qualified hydrotherapist within some hours travelling time from Mr and Mrs J's home.

It was true that the veterinary nurse was not a member of the HCA. However, we were satisfied that she was sufficiently well qualified and experienced to provide an appropriate level of treatment.

We believed that the fair and reasonable outcome in this case was for the insurer to act as if the treatment had been carried out by a member of the HCA. So we instructed the insurer to meet Mr and Mrs J's claim.

pet insurance - claim rejected because it related to a pre-existing condition

After visiting a friend whose cat had recently had kittens, Mr and Mrs W became besotted with the runt of the litter. They were offered the kitten and - against the advice of their vet - decided to keep her. Mr and Mrs W named the kitten "Pepper" and insured her straight away.

Pepper had suffered from serious health problems since her birth and eventually had to be put down. When Mr and Mrs W later came to claim £2,000 for the cost of her treatment, their insurer refused to pay. It said that the policy they had taken out excluded any pre-existing conditions.

Mr and Mrs W argued that Pepper's initial problems had been fully dealt with while she still lived with their friend. They indicated that they had phoned the insurer before taking Pepper to an animal hospital after she had become seriously ill. And they suggested that the insurer had said it would meet all veterinary and hospital charges.

The couple said these were expenses which they would not otherwise have incurred, as they would have had the kitten put down immediately rather than getting her treated at the hospital.

The insurer did not accept that it had agreed to cover all the costs. However, it said that as there might have been some misunderstanding about this, it would pay 50% of the veterinary costs as a goodwill gesture.

complaint not upheld
The vet's notes showed clearly that Mr and Mrs W had been aware, when they were first offered the kitten, that she had serious unresolved health problems. There was no doubt that the exclusion for pre-existing medical conditions applied.

The evidence did not support Mr and Mrs W's claim that the insurer had said it would cover all the fees. They had made only a very brief call to the insurer before taking the kitten into hospital. This call was not long enough for them to have raised any significant issues. They had a more detailed conversation with the insurer four days after the kitten went into hospital - by which point most of the costs had already been incurred.

Mr and Mrs W were told by the insurer that the claim would be covered if it was an "ongoing problem which had previously been met". We thought it possible that the couple had simply misunderstood the position. In the circumstances, we considered the insurer's offer to pay 50% of the charges was both fair and reasonable, and we advised Mr and Mrs W to accept it.

pet insurance - claim rejected because policy limited cover for treatment of any one condition to a 12-month period

Mrs G's three-year old beagle, Jasper, was diagnosed with a condition where his rear kneecaps were constantly dislocating or slipping out of position. This was very painful and Jasper suffered to the extent that he had difficulty walking. Surgery was needed and Jasper's rear right leg was operated on in December 2001.

The vet recommended that Jasper's rear left leg should also be operated on, ideally in the first few weeks of February 2002. But Mrs G did not arrange any further treatment until September 2005. When she then submitted a claim for the cost of the final operation, the insurer rejected it. It pointed out that Jasper's treatment had begun in 2001 - when his condition was first identified. The policy terms clearly stated that any condition would only be covered for 12 months after the initial treatment began. Unhappy about the insurer's decision, Mrs G brought her complaint to us.

complaint upheld
The insurer told us that, at the time of the initial claim, it would have made it clear that there was a 12-month limitation on the treatment of any one condition. Unfortunately, the insurer was unable to produce any evidence to support this.

Mrs G insisted that the limitation had not been brought to her attention. She said if she had been told she needed to have all Jasper's treatment carried out within 12 months, she would have done this. The only reason she had waited so long was that Jasper was still very young and the leg did not appear to require immediate treatment.

We decided that the policy limitation was a significant term that the insurer should have brought to Mrs G's attention. However, we could not be sure that this had happened.

Mrs G's decision to postpone the treatment had not prejudiced the insurer. Mrs G had renewed her policy each year, and was not attempting to claim for more than she would have originally been entitled to. So we instructed the insurer to reimburse Mrs G for the cost of Jasper's surgery - although we did agree to it applying a limit to the claim, based on what the treatment would have cost in 2002.

pet insurance - administrative error prevents policyholder renewing policy before it lapses

Mr T's pet insurance policy gave comprehensive cover for his expensive pair of breeding cockatiels, Rosie and Jim. The insurer who arranged the policy did not itself offer this sort of specialist cover and instead acted as an intermediary for the actual underwriter.

Towards the end of 2005, the underwriter notified the intermediary of its intention to terminate the pet insurance scheme. The intermediary arranged, at short notice, to contact all policyholders and advise them of the situation.

Cover had already been arranged with a second underwriter, and the intermediary told existing customers that while most of them would be covered by the new policy, some would not be eligible. These customers would continue to be covered under the existing arrangements with the original underwriter.

At the time Mr T's policy was due for renewal - in December 2005 - one of his cockatiels, Jim, was undergoing long-term treatment for a skin condition. Because of that ongoing claim, Rosie and Jim were not eligible for cover under the new scheme and would continue to be covered by the original policy. Unfortunately, an administrative error meant that the renewal letter that contained this information was not sent to Mr T. By the time the error came to light, Mr T's renewal date had passed and the policy had lapsed.

Following negotiations with the underwriter, the original insurer offered to accept liability for the continuation of Jim's treatment. This would apply from the date Mr T's policy lapsed until the treatment was completed, or the policy limit for that claim was reached.

The insurer also offered Mr T £100 for the distress and inconvenience he had been caused. Mr T was unhappy with the situation. He wanted to receive indefinite cover for Jim's treatment on the same terms he had enjoyed previously.

complaint not upheld
When we considered the case, it was evident that even if Mr T's policy had not lapsed, he would only - at best - have been able to secure the continued benefit of cover for a further twelve months - and up to any applicable policy limit. We noted that Jim had been in the middle of treatment for his skin condition when the policy was nearing the end of its annual contract. This meant that if the policy had been renewed on the same terms, cover for his treatment would have continued either until its completion or until the relevant policy limit had been reached.

The original insurer would not have been obliged to continue to provide the same level of cover at the next policy renewal. Equally, no other pet insurer would have been under any obligation to offer the same terms as those held under the original policy. In the circumstances, we told Mr T that we were not able to require the intermediary - or either of the insurers - to provide indefinite cover for the treatment of Jim's skin condition.

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ombudsman news issue 65 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.