Pet insurance

Pet insurance reimburses, at a percentage and up to an annual cap, veterinary costs incurred for a dog or cat: consultations, tests, surgery, hospitalization, sometimes prevention, vaccines and neutering. It should not be confused with liability for damage the animal causes to others, covered by personal liability insurance. The market is still underdeveloped in France compared with the United Kingdom or the Nordic countries, where a large share of dogs is insured, but it is growing fast, driven by rising veterinary costs, whose techniques now match those of human medicine. The product has all the classic difficulties of health insurance, in more acute form. Adverse selection is strong: owners of old animals or fragile breeds are the keenest buyers, hence age limits at inception, exclusions of hereditary or pre-existing conditions, and waiting periods. Moral hazard exists too, since the owner decides on treatment. And inflation in care, whose prices vets set freely, forces premium increases that trigger cancellations. For the analyst, it is a small laboratory of health pricing, where breed genetic information plays the role the law forbids elsewhere.