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Pet insurance bites

Many pet owners who have taken out a 'lifetime' premium for their dogs and cats have been told by Petguard that their policies are cancelled.

The customers, many of whom have been paying higher premiums for years in order to ensure they are covered for long-term illnesses such as diabetes, were given just three weeks' notice, following changes to the firm's underwriter.

Petguard's original underwriter, NIG, part of the Royal Bank of Scotland, decided to concentrated solely on commercial insurance, and has pulled out of the market, which left Petguard without a financial backer. So it found an alternative underwriter, the Amlin Syndicate. However, this new insurer would not offer cover to those who had already claimed on their policy.

A Petguard spokesperson said: 'Claims costs in pet insurance have seen dramatic increases in recent times and this has led to some insurers choosing to exit this market. Pet insurance contracts run for 12-month periods, and while described as a 'renewal' it is a new contract each year, even though it may be based on the existing terms.

'Lifetime cover in the original policy refers to the fact that the limits of indemnity were reset to their original values at renewal, but only if the insurer, NIG, was prepared to offer renewal; it does not guarantee cover for the life of any pet.'

But many customers feel this wasn't fully explained to them when they took out their policies, and are taking their case to the Ombudsman.

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