N.J. lawmakers ponder regulations for pet insurance

TRENTON, N.J. — New Jersey lawmakers are weighing reforms to pet insurance that would create some guardrails for coverage of preexisting conditions while allowing more insurers to offer pet coverage.

“So many of our seniors, our young adults, our children, they look at their pets as their best friends, so they need to be covered,” said Assemblywoman Carol Murphy (D-Burlington), the bill’s prime sponsor. “We need to make sure our people are not putting out thousands of dollars to get our pets well.”

The bill (A4942) would require insurers to disclose whether a policy would exclude coverage based on a pet’s preexisting condition, hereditary disorder, or other chronic ailment, and it would require insurers to prove a preexisting condition exclusion applies to a given claim before denying coverage.

It would allow pet insurers that exclude coverage based on preexisting conditions to impose waiting periods of up to 30 days on claims that may be based on an excluded condition.

But policyholders could forgo those waiting periods by having their pet examined by a veterinarian. Policyholders would be responsible for the cost of the examination unless their policy says otherwise.

Waiting periods would be barred for claims arising from accidents.

“God forbid I have a dog and I order health insurance, secure it, pay the down payment, and now we’re ready to go, but my dog gets hit by a car,” Murphy said. “I’m not going to wait seven days to go get my pet treated.”

The legislation, advanced Thursday by the Assembly’s insurance committee, would prohibit waiting periods for renewals of existing pet insurance policies and bar carriers from requiring a covered pet to undergo a medical examination to have their policy renewed.

The measure would also allow licensed insurers that provide life, health, property, and casualty insurance to carry pet coverage too.

Under existing law, pet coverage is largely limited to property and casualty license holders and those who apply for a separate limited license to sell pet insurance.

The change would make pet policies more available through employee benefit plans sold by life and health insurers at a time when demand for pet coverage is rising, said Gary La Spisa, vice president of the Insurance Council of New Jersey.

“We want to make sure they have some level of training,” he said.

Murphy said the law, which is based on model legislation drafted by the National Association of Insurance Commissioners, is meant only to apply to house pets and not to livestock.

It’s not clear when the bill will come before a committee in the upper chamber. The Senate Commerce Committee, to which the bill was referred, has no hearings scheduled, but the legislation will likely see at least some changes before then.

Murphy said she is in talks with the Insurance Council on provisions that would prevent pet owners from obtaining insurance to cover medical expenses for an injury sustained while a pet was uninsured.

The insurance industry has supported a seven-day delay between when a consumer buys a policy and when that policy goes into effect and premiums begin to be paid, but Murphy said she preferred a shorter window, perhaps one as small as 48 hours.

But neither expects the issue to hold up the bill, which Murphy said would likely be amended at a future committee hearing.

“She agrees we don’t want to incentivize people to buy the insurance after the accident but before they show up at the vet’s office for the same reason we don’t let people buy insurance after their house is on fire,” La Spisa said. “We’re working with her to fix that. I think we’ll be able to arrive at something that everyone can live with.”