A major pet insurer has cancelled lifetime policies for customers, giving some just three weeks notice. The issue is being taken to the Financial Ombudsman Service.
In the case of Petguard, the "lifetime" referred to the fact that annual limits for payouts for particular conditions would be reset each year if coverage was renewed. However, the small print stated that each year's policy was a standalone contract and thus the insurer was under no obligation to renew.
In this case the big problem was that Petguard's policies were underwritten by a third party firm, which has now pulled out of the pet insurance market. As a result Petguard won't be renewing policies for customers who have made a claim in the past. They'll now be left to find new coverage elsewhere, likely at considerably higher premiums.
The FOS has received complaints and says it will investigate whether both the policy contracts and the marketing material were clear enough. It notes that in most cases the insurer is obliged to provide cover for the duration of the existing contract even once it's decided to quit the market.