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How to avoid pet insurance claims going pear-shaped
Author :
Steve Dixon
Categories :
Business
Date :
October 1, 2009
Dealing with clients covered by insurance can throw up the odd problem. Here, the author
– managing partner of an FSA directly authorised practice – shares some of his advice on handling
claims and client queries.
OVER THE PAST 10 years, there have been huge changes in the pet insurance market. The influx
of retail chains and household insurance names into the market has massively increased exposure
to members of the public of the option of insuring their pets.
Veterinary fee inflation, largely driven by an increase in clinical standards, has been substantial.
Both these factors have resulted in a significant increase in the number of animals insured.
Currently, one in four pets in the UK is insured.
In the past, the predominance of Petplan and its close affiliation with veterinary practice made the
job of advising clients and administering their insurance claims easy. We all know this is no longer
the case. Now there are hundreds of policies underwritten by dozens of underwriters, with
affiliations that can chop and change almost monthly. All this is under the watchful eye of the
Financial Services Authority (FSA) and constrained by the Data Protection Act. At the time of
writing, Petplan still had the largest share of the market (40 per cent) followed by RBSI (26) and
Axa (12).
New FSA legislation was introduced at the start of 2005. It was aimed primarily at brokers and
lenders, but vets were somewhat unexpectedly caught in the net. From a legal point of view, three
options presented themselves to veterinary practices:
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•
Authorised or directly authorised.
These vets are allowed to advise clients which company to insure with and administer all aspects
of insurance claims. Currently, only a handful of practices in the UK have chosen this route.
•
Appointed representatives (ARs).
These vets are “tied in” to one insurer, the majority of them
with Petplan (which, in this instance, is the “authorised” party). They cannot recommend any other
company, although they can make generalised comments on policy types. They can administer all
aspects of insurance claims for the company they represent, but they are limited in what they can
do for the claims involving other insurers. Approximately 1,750 practices in the UK have chosen
this route.
•
Introducer appointed representatives (IARs).
The only difference between this group of vets
and unauthorised practices is that IARs can give out clientactivated free cover notes. In doing so, a
client’s details are recorded and passed on to the insurance company. Approximately 500
practices in the UK have chosen this route.
A fourth option in effect covers the remaining practices, the majority in the UK.
•
Unauthorised.
In this instance, practices can provide general advice regarding policy types and
have insurance leaflets in the waiting room for clients to take if they wish. They cannot recommend
specific products and are restricted in their contact with insurers to providing requested information.
The degree to which these guidelines and rules are adhered to inevitably varies. Some practices
and insurers may take a more relaxed view of the legislation. As yet, the author is unaware of any
legal action pursued against a vet for transgressions of FSA rules.
General advice
All veterinary practices, whatever their FSA status, should be able to give good general advice
about different types of policy and recommend a type, if not a company. The three types are:
• cover for life policy;
• maximum benefit policy; and
• twelve-month policy.
In the author’s practice, this general advice is given in the form of a handout (see
panel
) and it is
often useful to illustrate different policies using case examples. The opportunity is also taken to
mention some of the other idiosyncrasies of pet insurance (percentage excesses/inception
period/pre-existing conditions etc). Such a handout is also a useful aide for staff, helping them
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understand the differences between policy types. When this information is presented to clients by a
wellinformed practice member, the result is a much higher take up of good-quality insurance
policies.
If a practice is directly authorised, such information can be complemented with specific insurer
recommendations. Since the insurance companies with veterinary ARs have a wide portfolio of
products, those practices that have ARs may find that presenting this type of general advice
enhances their insurance recommendation.
For practices that are just introducers, at the very least clients will receive some much-needed help
in understanding the pet insurance market. Given that most clients’expectations of pet insurance
will be incorrectly based on home or motor insurance policies, problems are frequent if the
differences are not clearly spelled out from the outset.
The panel includes an extract from the author’s own practice insurance advice handout.
Identical approach
Of course, as you watch a puppy leave after a full health check and final vaccination, it is always
possible that your future meetings will be annual and brief. However, if a patient does have
problems and veterinary intervention results in the generation of a large bill, there are a few things
to remember.
Make sure that when admitting patients, your approach to insured and non-insured clients is
identical in terms of estimating fees. Never just write “insured” in your estimate box. The sensible
default position is to update all clients daily on charges for inpatients, and to annotate the clinical
record accordingly. Although an obvious protocol for fee-paying clients, this is also a must for
insured clients and can take the sting out of a complaint for a surprisingly large bill when there are
problems with an insurance claim.
Bear in mind many insured clients will want their practice to claim payment direct from the
insurance company, especially for big bills. The facility to do this is advertised and promoted by
insurance providers. It is prudent to have a policy regarding from which companies the practice will
and will not claim direct. Admission forms can be formatted to include insurance details (if insured)
and clients wishing to claim direct need to be made aware of your terms and conditions before a
procedure.
Below, is more wording from the author’s handout.
“Please be aware that we can’t guarantee you will be covered. Claims can be declined if there are
problems with premium payments, or if there is a pre-existing history of a similar illness at another
veterinary practice before your policy started. If you want to discuss whether you are covered, you
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will need to speak to one of our insurance advisors. ‘Claim Direct’is offered at our discretion and if
we feel there may be a problem with your claim, we will ask for payment on collection of your pet.”
Furthermore, you should insist on clients wishing to claim direct bringing current policy documents
into the practice and, if possible, presenting a signed claim form on collection of their pet.
This is made more difficult by the reluctance of certain insurers to supply blank claim forms to vets.
In addition, it is also a good idea to ask such clients to sign an “inhouse” form that essentially
covers a number of functions:
• Sets time limits for receipt of a claim form, settlement of the claim and payment of any
outstanding monies after the claims are settled (or declined).
• Reiterates that fees are the client’s responsibility and that you cannot guarantee any claim.
• Points out some of the potential reasons why a claim may be declined (pre-existing history,
expired cover etc).
• Restates your terms and conditions for handling a direct claim.
• Provides signed authority to insurers to disclose information to you, thereby meeting data
protection requirements.
This form complements the insurance claim form and should be kept on file (for a minimum of
seven years, if a practice is directly authorised). It is also useful to retain a copy of the claim form,
at least until the claim is settled.
All veterinary practices, whatever their FSA status, should be able to give good general
advice about different types of policy and recommend a type, if not a company.
Obviously, if you are not a directly authorised practice, there are still restrictions on administering
the claim. Although ambiguous in its interpretation, the act precludes a vet discussing a claim
directly with the insurer, unless directly authorised (can discuss a claim with any insurer) or an
appointed representative (can discuss a claim with affiliated insurer).
Whatever your FSA status, at the very least you will have a signed document acknowledging
responsibility for your fees.
When handling the claims, the author’s practice has found it useful to have one or two selected
senior and well-trained staff filling in the forms. They almost certainly will need to be vets or vet
nurses, as the ability to peruse a history, or to justify the finer points of a claim, is a must. It is
always a good idea to submit claims within days of finishing treatment, whether payable to the
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client or yourself. If we take eight weeks to submit a claim, we can hardly complain when the
insurer takes as long to settle.
The single biggest advantage of being directly authorised is that we can intercede on our client’s
behalf for unfairly rejected claims. Without our help, many clients would have poor claim
experience, and ultimately this will impact on the take up of insurance.
Common problems
Commonly encountered problems in the author’s practice, and some suggested solutions, are:
• Relatively new clients with undisclosed histories from other practices. Investigate thoroughly.
Many clients won’t realise the potential significance of comments made by a previous vet on their
pet’s history, especially if they have 12-month policies. Of course, some are only too aware, hence
the new client arriving at your practice clutching a claim form.
• Clients phoning an insurer to see if they are covered will more often than not come away with the
impression they are. That phrase “yes, you can submit a claim for that” is often misinterpreted.
Apart from pre-authorised claims, it is only when a form is submitted that the insurance company
earnestly considers the merit of the claim.
• Inception periods (usually 10 to 14 days). Remember a condition is deemed to have started when
the client or vet says, not when treatment started.
• Check policy documents for stated exclusions and to confirm that the name and address of the
policy holder matches your records.
• Dentals. Those “12-month checks” catch an awful lot of clients out. Once you recommend dental
work, it’s worth pointing out you are recording the fact and failure to act on it may invalidate a
claim. We all know some insurers will cover and some won’t.
• Copy and retain claim forms at least until the claim is settled. This is a must for those instances
when the payment is inadvertently sent to the client. In our experience, the majority of insurers will
honour the payee direction (especially if you have a copy to prove it). I do know of one company
that won’t, and there are instances of unscrupulous clients having major work done, then
redirecting veterinary fees to themselves.
• It is good practice to send particulars of a claim and relevant invoices to the client at the same
time the claim is submitted.
This will counter any accusations of fraudulent claiming and reminds clients you are doing this on
their behalf.
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• Record the date when claims are submitted. Set a time limit for chasing up non-payment (which
may vary depending on the insurer). Depending on your FSA status, you can phone the insurance
company direct or go through the client.
Finally, what do you do if it all goes pear-shaped and you find out that a client stopped paying the
policy premium three months ago? His or her insurer has declined the “claim direct” for veterinary
fees, and the client (whose mobile is never answered) owes you £1,500. Now, if anyone could
answer that question…
Acknowledgements
1. UK Pet Insurance 2008, Datamonitor.
2. King, R (2005). Insurance legislation: what does it mean to be authorised? In Practice
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:
380-383.
Sample text of a handout in an Appointed Representative practice.
Cover for life
policies are the best option, as these policies have an annual benefit that is renewed
each year and provides continuous cover for long-term or recurring conditions. For example, ******
pays out up to £7,000 each policy year; even if you spent the majority of these funds, as soon as
you reached your renewal date the full £7,000 benefit would be reinstated.
Maximum benefit
policies offer a different type of cover compared to the above. They provide a
fixed maximum benefit for each condition. For example, ****** pays out £6,500 for each illness over
your pet’s lifetime. The downside of these policies is that some conditions can be very costly and
affect your pet for many years (such as diabetes or skin disease). In these cases, if the maximum
benefit is reached, the ongoing costs fall to the owner to pay.
Twelve-month policies
only provide limited long-term cover. A condition is only covered for a
maximum of 12 months from the first symptom, not just from the first claim. Any fees occurring after
that 12-month period will be declined by the insurance company. It is possible, therefore, to be
excluded from claiming for a condition without ever submitting a claim or even having any
treatment.
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