Human- and pet health insurance both originated in Europe towards the end of the 1800’s already. In South Africa, human health insurance became more prominent in the 1980’s with pet health insurance following in the late 1990s.
As human health insurance became more specialized, it led to the formation of Medical Aid Schemes and the Medical Schemes Act was created to regulate these Medical Aid Schemes. Although there has been significant growth in pet health insurance products, it did not follow the same route. Pet health insurance is therefore not regulated by the Medical Schemes Act, and that is good news for pet owners. Let us look at how medical aid schemes are different, and why pet health insurance is better.
· Medical aid schemes must follow strict rules that lead to higher premiums for members.
Medical aid schemes must charge all members the same fees and provide prescribed minimum benefits. They must also accept anyone who applies. This means they cannot limit risk and the cost of the higher risk must be carried by the members, leading to higher premiums. Pet health insurance products are not bound by these requirements. They are flexible and can be tailored to the clients’ needs. Certain high-risk patient can be excluded. This ultimately leads to lower risk and therefore more affordable premiums.
· Other insurance products cannot be added to Medical Aid Schemes
Since medical aid schemes fall under different legislation, they cannot offer other insurance products to their clients. With pet health insurance, it is possible to add related insurance products. An example is third-party liability insurance that gives cover to owners in case the insured pet injures someone else.
We will have to see how pet health insurance develop further, but hopefully it will always be to the advantage of caring pet owners.
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Dotsure Limited (Registration number 2006/000723/06) is a licensed non-life insurer and authorised financial services provider (FSP39925).