What is Accident & Illness Pet Insurance? (Plus: Why You Should Offer It)

Insurance 101 Pet Insurance

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Insurance 101 Pet Insurance

By The Boost Team on Jan 28, 2023

6 min read

A greyscale photo of a golden retriever dog on the examination table at a vet's office. A green and blue gradient overlay covers part of the background.

Pet accidents and illnesses are unfortunately common, which can cause considerable financial hardship for pet owners. The average emergency vet visit costs $800-$1500, and pet owners in America collectively spend over $34B annually on veterinary care.

If your business caters to pet owners, this presents a significant opportunity for you to offer your customers a service they need. In this blog, we’ll explain what accident and illness pet insurance is and how your business can use it to grow new recurring revenue and build deeper relationships with your customers.

What is Accident and Illness Insurance for Pets?

As its name indicates, accident and illness pet insurance is a kind of insurance policy that reimburses pet owners for necessary veterinary costs in the event of an accident or illness (up to a certain amount). Typically, a base pet insurance policy will cover emergency veterinary care, and examinations to diagnose, treat, or operate on a covered injury or illness. This can include things like:

Consultations, physical exams, health inspections, and office visits
Surgical procedures
Tests like X-rays, CT scans, ultrasounds, and blood tests
Medical supplies for treating the issue
Hospitalization
Pet ambulance fees

Without insurance, these services can cost hundreds or thousands of dollars. It’s not surprising that more and more Americans are considering pet health insurance to ensure they can afford care for their pets.

Accident vs. Illness in Pet Insurance: What's the Difference?

A standard policy will have rules about what qualifies as a “covered” issue for the purpose of reimbursement. So what exactly is considered an “accident” and what is an “illness?” The answers may seem obvious, but knowing the precise definitions can be important. If a pet owner needs a service that falls outside of those categories, they would need to add it as additional coverage in order to receive those benefits.

An accident is usually defined as something like “a sudden or unexpected event that causes injury to the pet." For example, if your cat is injured by another animal, or your dog eats a box of chocolate and needs emergency vet care. Events like these would be defined as “accidents” and be covered by most accident pet insurance policies. It should be noted, however, that if the owner causes intentional harm to their pet, that would fall under abuse and would generally not be covered.

An illness is usually defined as something like "any change to the normal healthy state of the pet, a sickness, disease, or medical condition that is not caused by an accident.” An example of an illness that would typically be covered by illness insurance would be something like heartworms, canine flu, skin rashes, diabetes, or arthritis. Due to cost and complexity, however, cancer treatment is often excluded from accident and illness policies.

The distinction between the accident and illness is important, because it can affect whether a pet’s care is covered. Many standard pet insurance policies cover both accident and illness, but there are policies that may only cover accidents. It’s important for potential policyholders to understand what they’re getting, and if it’s a good fit for their needs.

Will Pet Insurance Cover An Existing Condition?

Unfortunately, the short answer is “no.” As a general rule, if a pet has a pre-existing health condition, treatment for that condition will usually not be covered by the insurance policy. However, a pre-existing condition will not necessarily disqualify the pet from being covered entirely. For example, if a dog has pre-existing allergies, and his owner purchased a pet insurance policy for him, any treatments related to his allergy likely wouldn’t be covered. If the dog contracted heartworms after the policy was purchased, however, his treatment could be covered.

This is great motivation for pet owners to get insurance when their pets are young. When it comes to purchasing medical protection, “the earlier the better” very much applies, because as pets age, they are more likely to develop conditions. If a pet owner waits until their pet starts to show symptoms, it can be too late to get the financial protection they need.

Additional Pet Insurance Coverage

Insurance needs will vary for every pet, and sometimes those needs fall outside of standard policy coverage. Some pet breeds have a higher risk of conditions requiring long-term care – while for others, the biggest risk is playing too hard at the park. To accommodate for those differences, pet owners can choose to add endorsements to their policies, such as:

Preventative care: Many accident and illness policies only cover care if the pet is sick or injured, but don’t cover routine check-ups and other preventative care. An endorsement might extend coverage to include things like vaccines, parasite prevention, (flea medication, heartworm pills, etc), spaying or neutering, and other routine health maintenance costs
Cancer treatment: As previously mentioned, cancer treatment is an outlier among illnesses as most pet insurance policies do not cover it. Cancer treatment is usually expensive and treatment is typically complex or ongoing. A cancer treatment endorsement can cover things like chemotherapy, radiation therapy, or immunotherapy.
Dental care: Animal dentistry is a specialized field, some of which can be handled by a standard vet visit, but other treatments cannot. Coverages for treatment like tooth-related injuries, such as crowns, root canals, or tooth extractions would typically need to be added as an endorsement.
Prescription drugs: Pet medications are not usually included in a base policy, but it can often be added as an endorsement. This might include both short-term medicine for treating an illness (such as antibiotics), and regular medications to manage conditions like allergies.
Alternative therapies: Standard pet health policies usually do not cover treatments like acupuncture, hydrotherapy, or physical therapy for pets, but these can sometimes be added through endorsements.

Even more comprehensive policies might cover loss and theft, kennel/boarding services, or even advertising a missing pet and offering a reward for its return. Depending on the provider, pet owners can fully customize their policies and make them as robust or as simple as they need, which can save them thousands of dollars.

Why Your Business Should Offer Pet Insurance (And How to Do It)

Now that we’ve seen how valuable accident and illness pet insurance can be for pet owners to have, let’s briefly talk about the opportunity that this product offers for pet-related business owners.

Growing Demand for Pet Insurance

There is an increasing demand for pet insurance in the United States. Since 2017, the average annual growth rate of insured pets is 21.5%. At the end of 2021, close to 4.41 million pets were insured, a 28% increase since 2020. In 2022, the total premium revenue for pet insurance was nearly $2.6 billion. That is a huge market with a promising annual growth rate.

White-labeled, embedded insurance can be a big opportunity for pet businesses to tap into that market and build new streams of recurring revenue. If your clientele is primarily pet owners, you are perfectly positioned to offer this product. Accident and illness pet insurance would be a natural addition to your product lineup, and because your customers already trust and have a relationship with you, they would be more inclined to get the coverage they need from you instead of an insurance company.

Other Benefits of Entering the Insurance Market

1. Deepen your customer relationships

Insurance is a very “sticky” product. Due to the nature of insurance, it establishes an ongoing relationship with your customers through monthly premium payments. Not only would you have the benefit of that recurring revenue, but you also have the ongoing brand exposure that it provides. It gives you another touch point with your customers, which can only strengthen your long-term relationships with them.

2. A modern, digital experience

Modern customers expect modern experiences. Traditional insurance carriers and policies tend to be rigid with a mixture of slow offline processes and archaic online ones. By offering your customers a customizable, convenient, and entirely digital solution, you can meet your customers in the 21st century and stand out from the competition.

Embedded insurance, as its name implies, is insurance that is embedded into an existing purchasing experience–it allows your customers to buy digital pet insurance without requiring them to leave your website to complete the transaction. Another example of embedded insurance would be travel insurance for an online plane ticket or crypto wallet insurance offered on a crypto-related website.

A white-labeled insurance product is one that is completely integrated not only into your website, but also into your brand. If you were to offer white-labeled pet insurance, your customers would have no indication that the product was not created by your company.

Embedded pet insurance is a great opportunity for pet business owners to grow their revenue and deepen their customer relationships. If you are interested in embedded accident and illness pet insurance, Get the Guide to Growing Your Revenue with Embedded Pet Insurance, and learn everything you need to know to get started.

If you’d like to speak to one of our pet insurance experts, contact us to learn more.

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Ready for Liftoff: BHMS Backs Boost

Jul 31, 2024

Friends of Boost, Today Boost is thrilled to announce that we have secured a significant equity investment from BHMS Investments, setting the stage for an incredibly exciting next phase for this company and the amazing team that has built it brick-by-brick over the past seven years. With a rock-solid foundation firmly in place, this partnership is going to supercharge our growth, fuel more innovation, and cement Boost’s position as the go-to infrastructure platform in insurance. We are on a mission to empower MGAs, insurtechs, independent brokers and agents, wholesalers, embedded insurance providers, and really any company that just wants to build, transact, and operate more efficiently in this technology-enabled world of ours. While capital is great, today is about hard-earned validation for our team doing that the right way since Day 1. BHMS is the perfect capital partner for Boost in terms of their insurance expertise and unquestionable track record in the space, but more importantly, they are fantastic people that share both our views on the industry and our principles of company building. The market is dangerously fixed for early and growth stage companies right now (and I say “fixed” intentionally). It’s incredibly easy to get picked off in an environment like that, so it takes a rare mix of both intellect and character to do the right thing when you’re on the capital side of that equation - and even more to be truly value-add to your portfolio companies. BHMS has that mix in spades and appreciated Boost for what it is, what it has accomplished, and what remains an incredibly high ceiling for this company vs. playing short-term charades with the herd. That’s our kind of investor. This investment isn’t just about the money—it's a resounding endorsement of Boost’s strength, credibility, and potential to make a truly meaningful impact on the insurance industry at scale. With BHMS now on board, alongside an incredible group of long-time strategic backers like Markel, RenaissanceRe, and Canopius, we’re ready to take our game to the next level. Our mission has always been to disrupt the insurance space with cutting-edge tech and unparalleled service, and this backing proves that disrupting responsibly is the only approach that works in our industry. Anyone can grow fast if they don’t care about quality or long-term credibility. At Boost, we underwrite profitably, we respect compliance, and we always - always - take a collaborative approach with our stakeholders across the entire value chain. As someone with literally zero patience, I can personally attest to that being incredibly difficult to do at times - but it scales. Even with the market’s ups and downs, Boost has been a powerhouse of innovation in the insurtech landscape with equal commitment to disruption and reliability. Doing things the right way does not mean you cannot innovate - or even disrupt - and leveraging best-in-class technology is not a right reserved for #insurtechs. Our platform has always been a one-stop shop for insurtechs and embedded insurance providers and MGAs, independent agents and brokers, and wholesalers alike - offering everything from product development to underwriting and program management to claims administration and reinsurance capacity. With our proprietary tech and a dream team of industry pros, we’re delivering smarter, more efficient solutions than ever before. Since our first program launched in 2019, we’ve underwritten over $200 billion in coverage, which is a somewhat staggering figure in hindsight. Today we’re proud to support programs for giants like Amwins along with trailblazers like Cowbell, Newfront, and Wagmo, and we’re grateful for all of the companies that chose to build with Boost even when Boost itself was just getting started. Our steady, disciplined approach has kept our portfolio profitable and we like to think that has kept our partners in front of us very happy as well. All of Boost’s success is thanks to what is hands down the best team in the industry. Hard stop. Their grit, dedication, and willingness to tackle tough challenges head-on has been crucial. Boost’s commitment to quality starts with our team and is reflected in them every single day. We keep things lean at Boost because that quality always outperforms quantity. Even if that approach always requires more from each individual and makes the stakes a bit higher, working with the right people makes the returns on each long hour invested that much more gratifying. Few people exemplify those principles or have demonstrated such an unwavering commitment to Boost more than Jeremy Deitch, so I am also thrilled to announce that Jeremy has been promoted to President at Boost and will join me on our Board of Directors. Jeremy’s leadership has been critical since the day he started at Boost almost 6 years ago, following probably the most grueling interview process in our company’s history - one he is always happy to dramatize even more if you ever ask him. ;) I couldn’t be more grateful to have a partner like him as Boost soars to new heights. With this new investment, we’re geared up to boost (pun intended) our growth and expand our tech offerings. We’re planning to scale our MGA programs, roll out new products, and snap up some strategic acquisitions. Our goal? To make building a business in insurance easier, faster, and more efficient for everyone so they can better serve their customers. We’re more fired up than ever about our mission to empower insurance providers with the tech and infrastructure they need to thrive. This partnership with BHMS is just the beginning. The future is bright, and we’re ready to lead the charge. Thank you to everyone who has been part of our journey thus far. Let's all keep pushing boundaries together - because the best is yet to come. Special thanks to the team at Howden Capital Markets & Advisory for helping Boost always say what it’ll do and do what it says. You can find our full press release here and, more importantly, can start joining our platform here. All my best, Alex Maffeo CEO & Founder Boost Insurance

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What is a Cell Captive?

May 23, 2024

A captive is an insurance entity that a business creates, rents, or owns in order to self-insure risks. A cell captive, sometimes also called a protected cell captive or segregated cell captive, is a specific insurance captive structure that allows an entity to segment or separate business in one cell from that in another cell, so that a particular cell’s assets and liabilities are insulated from anything that happens in another cell (even if both cells are part of the same overall captive facility). Using captives to self-insure risk offers businesses a number of benefits: they can participate in some or all of their program’s underwriting profitability, maintain end-to-end control over risk (including pricing and claims handling), and avoid paying significant overhead fees to a “middleman” insurer. Companies have several options for structuring and utilizing an insurance captive. They might build a single-parent captive, pool risk in a group captive, or make use of a cell captive. In this blog, we’ll take a look at each. In a single-parent captive, a company will often partner with a fronting carrier to reinsure at least part of their own risk. These are most commonly used by very large companies with exposure to multiple lines of business, which they can insure through the same captive entity. Example: A national food-delivery business wants to provide insurance to its restaurant partners, to protect against the risk of lawsuits related to food safety for meals delivered through the service. It discusses partnerships with several major insurance carriers, but none are willing to provide the level of coverage that the business is looking for at a reasonable price. To get what it needs, the food-delivery business sets up a captive to reinsure a fronting carrier partner, enabling the business to insure its own risk and provide the coverage it needs to its restaurant partners. Setting up a single-parent captive is a considerable undertaking with high capital requirements and a complex setup, with significant ongoing operational requirements going forward. In order to make sense financially, it usually requires a high volume of premium. For that reason, this option is usually only viable for very large businesses. For businesses that can’t afford (either in time or in money) to set up their own captive, a second option is to partner with other businesses in a related industry to set up a group captive. In this scenario, a single captive maintains portfolio capacity that can be shared by a group of entities. The entities can then pool risk together in the single captive. Example: Several real estate companies form a partnership to share a group captive to pool their similar risks. Each company contributes a certain amount of capital to fund the captive, and the capacity is shared among the partners. The participating real estate firms are then able to leverage the captive’s capacity to exercise greater control over their risk, and avoid paying high fees to middlemen. This can allow the partner businesses to share risk (and benefits) between them, and works well for trade associations and other groups of companies in related industries, that share similar risks. However, since the fund is shared between partners as well, one partner’s negative returns can impact the other partners involved. In a cell captive, the business first sets up an entity called a core, which is a similar process to setting up a single-parent captive. Once the core entity is complete, however, the business can much more easily spin up additional cells within the captive structure. The financials for those individual cells are separate from each other, rather than the combined funding of a single-parent or group captive. For many companies, however, using a cell captive doesn’t mean building one themselves. While there are use cases for single-parent cell captives, most businesses that create them then rent out cells to other businesses. Using a cell in another company’s captive entity (also called captive-as-a-service) allows a business to reap the benefits of an insurance captive at a much lower cost. We’ll look at some examples in the next section. The first step in creating a cell captive is to create the “Core” entity. This process is similar to building a single-parent captive: Once the core captive entity has been created and adequately funded, the owner can spin up individual cells within the captive’s structure to support different lines of business, segments, or partners. The Department of Insurance will still need to approve all new cells, but the process is much more streamlined than in prior cases. New cells can often be set up in weeks instead of the months or years typically needed for entirely new captive entities. Captive cells’ assets and liabilities are then statutorily protected from each other (which is where the ‘protected cell captive’ name comes from). This means that if one cell has a difficult year and experiences significant underwriting loss, the assets of the neighboring cells can’t be used to fund that loss. There are multiple ways that cell captives are used, including offering captive-as-a-service (also called rent-a-captive) to other partners or businesses, and separating different parts of the parent company’s business for performance tracking. In a captive-as-a-service or rent-a-captive scenario, the company that owns the captive core would allow other businesses to use cells in its captive. For a fee, the owner can set up a new cell specifically for the partner business, and manage it on their behalf. This lets the partner business leverage the owner’s infrastructure to achieve many of the same benefits of a single-parent captive, without the cost and complexity of creating one. Example: An insurtech specializing in commercial insurance has built a very strong customer base, and wants to further grow its business by participating in some of its own risk. However, building a full captive is too resource-intensive for the insurtech to take on. Instead, the insurtech partners with a CaaS provider and rents a captive cell. The insurtech then uses the cell to self-insure some of its risks, enabling it to participate in the underwriting returns and further scale towards a full-stack insurance business. While the most common reason for building a cell captive is to rent out cells to other businesses, there are a few reasons a company might build one for its own use. Because the cells’ financials are statutorily separated from each other, a cell captive allows a large enterprise to delineate between different lines of business or geographic regions, and monitor their performance separately. Example: A nationwide property management company offers several insurance products to its customers to help protect their personal property and finances. For planning and budgeting purposes, each line is supported by an individual cell in the management company’s cell captive. Over the course of the fiscal year, several lines perform over their targets, while one line significantly underperforms. The other LOBs’ budgets are unaffected by the low-performing LOB’s losses, and the company has clear visibility into which of its products are doing well and which may need a course correction. Cell captives provide a number of benefits to both their owners and the end users: Cell captives are popular for a reason: they offer significant value to both the companies with the resources to build them, and the companies that would rather rent a cell than build a single-parent entity from scratch. To learn more about Captive-as-a-Service with Boost, contact us.

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Partnerships and Focus: Big Trends at Money20/20

Nov 3, 2021

It was a busy October for the team at Boost Insurance, wrapping up with one of our favorite industry events: Money20/20. The conference was a super interesting contrast to ITC which was laser-focused on insurance, while Money 20/20 was more about fintech in general and much, much bigger! With fintech about ten years ahead of insurtech in terms of maturity, it’s interesting to see the level of innovation and diversity of companies in our big brother industry. Here are some of the big trends we noticed. One of the really interesting trends that kept being repeated at Money20/20 was a shift in mindset among both fintechs and banks. In the past, they have tended to see each other as competition for consumers’ business and attention but now everyone is moving towards viewing each other as complementary vs. competitive. We saw multiple collaborative efforts between the upstarts and the established, working together to create a better customer experience. This works because they each have a specialization (fintechs excel at meeting modern consumer expectations and banks are experts in profitably navigating a very regulated, very complex business), and partnership lets them bring both those strengths to the table. This was extra interesting to us at Boost because it reflects what we see in insurance, with insurtechs and carriers working together and bringing their own strengths together to meet modern consumer needs and expectations. For example - Boost has built a modern tech platform making various insurance products available via API but partners with established reinsurance companies to facilitate risk transfer. There will still be winners and losers between the incumbents and the upstarts, but as collaboration and competition continue consumers will be the clear winners. A trend I’ve written about before, and one that we continue to see play out, is tech companies’ focus on affinity groups. Fintechs are springing up all over with explicit goals of serving a relatively narrow group of people and serving them well. Companies like Paceline for people focused on health and wellness, Daylight for the LGBTQ+ community, and First Boulevard for African-Americans are just some of the fintechs concentrating on being the best option for a specific set of consumers. This is pretty much the opposite of traditional one-size-fits-all programs - instead of creating something broad that can be good enough for the biggest slice of people, creating something very targeted that can be great for a specific niche. This trend is great news for consumers who traditionally have not been served well by financial services in general. At Boost we’re starting to work with more affinity-focused companies because our modular, customizable product structure allows partners to tailor insurance for their customer needs. It’s exciting to be part of making insurance more accessible to all groups of people! Finally, it was really exciting and validating to see so much interest in new approaches to traditional industries. Finance and insurance have historically had a reputation for being very slow to change, sometimes for good reason (highly regulated, handling people’s money is a big responsibility, etc). This year though there’s a ton of interest in potential innovations, look no further than the enormous presence of blockchain and crypto-focused companies at Money20/20! Boost met with a TON of different companies during the show, and we cannot talk about anything yet but be on the lookout for some very interesting things coming in the near future! Money2020 was a heck of a conference and while my conference year is wrapped, the Boost team will be out and about at shows the rest of the year. We are looking forward to more opportunities to meet people in 2022, so if you did not get a chance to connect with us at Money2020, just drop us a line.