Pet health, liability policy market finds insurers wagging their tails

Medical and liability insurance for pets is something most owners never consider, but the industry aims to change that.

Because of better pet food and other improved conditions, household pets have come to enjoy longer lives.

But they still can become ill as they age. And the cost to treat cancer and other diseases is rising due to the development of costly high-tech medical equipment.

According to the Pet Food Manufacturers Association, people in Japan owned roughly 24 million dogs and cats in 2004. But only 1 percent of them are covered by insurance, according to industry watchers.

Insurers see this as a wide-open market.

Tokyo-based Anicom, the nation’s largest pet insurance company, offers policies for dogs, cats, birds, rabbits and ferrets. About 150,000 animals are covered by its policies, Anicom officials said.

In legal terms, pet insurance differs from medical insurance for people. Pet insurance is defined as “mutual relief,” in which pet owners pool money at a company like Anicom to be used for their property.

But pet insurance has a system similar to human medical insurance. Providers issue health insurance certificates to owners who purchase pet coverage.

In the case of Anicom, when a pet owner presents the firm’s policy certificate at a veterinary clinic that is a member of its plan, the company shoulders 50 percent of the treatment cost. Anicom has contracts with more than 3,000 animal hospitals.

Anicom’s insurance covers nearly all diseases and injuries. It guarantees payment of up to 200,000 yen a year for regular checkups, hospitalization and operations.

The monthly premium varies by locality due to the different incidence of disease.

People can take out Anicom insurance for cats and dogs up to 8 years old, and birds, rabbits and ferrets up to 5 years old. The insurance is valid until the pets die.

Alp, another pet insurer based in Tokyo, is selling Club Alp policies for dogs and cats.

The insurance sets limits on payment of expenses in accordance with the type of treatment, including a blood transfusion, anesthesia and setting of broken bones.

“We decided to set limits on insurance payouts because not many veterinary hospitals announce their charges and because costs for treatment vary widely among hospitals,” an Alp representative said.