Call Kurtis Investigates: State Bill Aims to Simplify Pet Insurance Coverage

CERES (CBS13) -- A new state bill that would simplify terms for pet insurance policies is advancing through the state legislature, aiming to keep the $750-million industry on a shorter leash.

State Insurance Commissioner Dave Jones said the industry desperately needs stricter definitions of insurance policies, to ensure customers are clear about what is covered and what is not. He believes AB 2056 would do that.

Of the 32 pet insurance cases the Department of Insurance investigated last year, 29 ended up being overturned and paid by the insurance company -- a rate that has Jones concerned.

"Pet insurance doesn't have adequate transparency or disclosure," Jones told Call Kurtis.

Linda Sheldon of Ceres said her insurer refused to cover all of her dog's emergency medical costs, though she paid almost $500 per year for insurance she believed would cover her Chihuahua Bella.

Sheldon said Bella pulled on her leash too hard, injuring her throat. After several trips to the vet for a collapsed trachea, Bella took her last breath.

"She was just my little angel puppy," Linda said. "I really didn't think she was in such bad shape that she was going to die."

Sheldon's pet insurance company, Veterinary Pet Insurance (VPI) from Nationwide, only covered $600 of the roughly $1,300 in vet bills.

VPI said a collapsed trachea is not covered.

But Sheldon said when she signed up for the policy, she was told all emergency treatment would be covered.

"I take them at their word," she said. "They're a business. How could they lie?"

Jones doesn't think the pet insurance industry is treating customers fairly.

He sponsored a state bill that would simplify the terms in these policies, and give you 30 days to back out of a pet insurance plan.

"We want to make sure that the policies themselves give the consumers the information they need to make the decision," he said.

And the industry is largely in support of that plan.

The North American Pet Health Insurance Association, which represents the majority of pet insurers, told Call Kurtis the bill would help "maintain high standards for the marketplace."

"Look at the extent I've had to go to," Sheldon said.

We reached out to VPI, which supports the legislation, and the company said it sent Sheldon copies of her plan.

"Unfortunately, it appears she did not fully understand the details of her policy," a statement from the company said. "We work very hard to be transparent with potential and current policyholders on what's covered, and just as importantly, what's not covered."

Sheldon is now warning others to read the policies, before buying pet insurance.

"I think they should tell you upfront," she said.

In the meantime, Sheldon is now making payments on Bella's medical bills.