The Benefits of the Benefit Schedule

As you guys know, we’ve created the Hambone Nation Blog to highlight some of the more unusual claims we receive and provide tips for avoiding unexpected pet accidents. From time to time, we may deviate ever so slightly to address issues we think may benefit our readers and their pets. Today, we wanted to briefly discuss VPI’s benefit schedule.

People sometimes wonder why VPI uses a benefit schedule to reimburse claims, rather than reimbursing based on a percentage of the veterinary bill. There are a number of reasons we use a benefit schedule, but the most important reason is that it allows us to provide customers with the maximum amount of coverage for the most affordable premium. We also feel a benefit schedule is the fairest and most transparent way to reimburse claims.

VPI has been using a benefit schedule from its inception in 1982. Since then we have seen more than 50 pet insurance companies enter and leave the market. Many of those companies have tried to reimburse claims according to a percentage of the veterinary bill only to discover that a percentage reimbursement model is difficult to sustain when veterinary fees go up.

Several years ago, VPI’s President and CEO, Dennis Drent, explained the advantages of a benefit schedule, and the risks associated with reimbursing on a percentage basis:

Paying a set percentage of veterinary fees exposes the insurer to veterinary fee inflation. Therefore, policyholders may experience more frequent price increases from VPI’s competitors. These companies may be able to hold prices for a brief time, but eventually they will need to increase their prices to stay in business, or lower their reimbursement amounts.

It appears that Dennis knew what he was talking about, as this year alone we have seen five of our competitors raise their premiums without enhancing their policies. And while many of our competitors claim to reimburse an exact percentage of the veterinary bill—these payments are often limited to an amount referred to as “usual and customary fees,” “usual vet clinic fees,” or “standard vet clinic fees.” What this means is that the insurance company will only reimburse a percentage of what it deems to be “usual” or “standard” and their determination may be below average veterinary fees. This, in effect, is a “hidden” benefit schedule disguised as reimbursing based on a percentage.

In contrast, VPI’s benefit schedule is available on our website at www.petinsurance.com. We also send the benefit schedule to all policyholders upon enrollment. By failing to provide a benefit schedule, or a specific list of what is covered, we believe other companies are not being transparent with their policyholders.

We believe that our benefit schedule provides the stability that will continue to set us apart from the competition and ensure we will be there for you when you need us.