In the Doghouse: Pet Owners Take Nationwide to Court

Nationwide discontinued its Whole Pet insurance plan last year, despite advertising it as offering lifelong coverage for pets. A group of Massachusetts pet owners is now suing the insurer, alleging its move left them with expensive vet bills for sick or older pets and potentially disqualified them from getting pet insurance elsewhere.

Nationwide ended Whole Pet policies and dropped over 100,000 pets. By canceling policies for pets after they developed conditions, the insurer essentially made those conditions uncoverable by other insurers that typically exclude pre-existing conditions from coverage, the lawsuit charges.

The class-action lawsuit filed in Massachusetts alleges the insurer used a “bait-and-switch” strategy to enroll pets into lifelong care, only to drop coverage after the pets aged or developed illnesses.

Nationwide is the nation’s largest pet insurer, covering more than a million pets.

“Consumers who purchased pet insurance through Nationwide expected their coverage would continue throughout their pet’s lifetime … Then, when their senior pets needed veterinary care, Nationwide decided it would no longer offer Whole Pet, thus canceling coverage for thousands of consumers,” the lawsuit alleges.

The lawsuit is seeking financial compensation for the pet owners who were left with expensive medical bills after Nationwide canceled their policies. It also aims to set a precedent for future pet insurance policies.

Lawsuit accuses Nationwide of fraud

The lawsuit, which attorneys filed earlier this month, focuses on four core charges and alleges that Nationwide:

1. Violated the Massachusetts Consumer Protection Act

2. Violated the Federal Trade Commission Act and various state-level consumer protection acts

3. Committed negligent misrepresentation

4. Committed fraud

The suit claims that pet owners paid premiums but didn’t receive claim payouts from Nationwide. It also alleges that Nationwide misled pet owners into a “whole life” policy when it wasn’t really for life and that Nationwide allegedly dropped sick, older pets when it promised not to.

Pre-existing conditions in pet insurance

The lawsuit has a particular focus on Nationwide canceling coverage for pets after they developed chronic conditions, making those conditions uncoverable by a new insurer or plan.

A pre-existing condition is anything that relates to a pet’s medical history before a policy starts, according to the North American Pet Health Insurance Association (NAPHIA). But if a condition develops after an owner enrolls their pet in a policy, it’s typically coverable. Many pet owners seek “whole life” policies to ensure their pet will continue to receive coverage as they get older and develop more health problems.

The lawsuit states, “Nationwide marketed the Whole Pet with Wellness Plan as a plan that included coverage for chronic conditions and did not expire at a certain age of the pet.”

As a result of Nationwide’s canceling the plan, the lawsuit states, the pet owners “suffered and continue to suffer actual, consequential, and pecuniary damages.”

Nationwide provided a written statement on the matter to Boston’s 25 Investigates, saying, “While we do not comment on pending litigation, it is important to note that we have been working to offer customers new products, which has reduced the number of impacted policies by more than 75%.”

What’s next? Adjusting to the growth of pet insurance

Pet insurance is a growing industry, doubling in size since 2020, according to NAPHIA, and states are struggling to regulate it. Massachusetts ranks eighth in states with the most insured pets and the highest grossing premiums, according to NAPHIA.

As more and more pet owners seek insurance options, experts recommend consulting their veterinarian regarding specific insurance plans and reviewing plans to fully understand possible exclusions.

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