The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 149: Pet Insurance [Effective July 1, 2025]

• § 7151. Short title [Effective July 1, 2025]

  This chapter shall be known and may be cited as the “Pet Insurance Act.” (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7152. Scope and purpose [Effective July 1, 2025]

  (a) The purpose of this chapter is to promote the public welfare by creating a comprehensive legal framework within which pet insurance may be sold in Vermont.

  (b) The requirements of this chapter shall apply to pet insurance policies that are issued to any resident of this State and are sold, solicited, negotiated, or offered in this State and policies or certificates that are delivered or issued for delivery in this State.

  (c) All other applicable provisions of Vermont insurance law shall continue to apply to pet insurance except that the specific provisions of this chapter shall supersede any general provisions of law that would otherwise be applicable to pet insurance. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7153. Definitions [Effective July 1, 2025]

  (a) If a pet insurer uses any term defined in this section in a policy of pet insurance, the pet insurer shall use the definition of the term provided in this section and include the definition of the term in the policy. The pet insurer shall also make the definition available through a clear and conspicuous link on the main page of the website of either the pet insurer or the pet insurer’s program administrator.

  (b) Nothing in this chapter shall in any way prohibit or limit the types of exclusions pet insurers may use in their policies or require pet insurers to have any of the limitations or exclusions defined in this section.

  (c) As used in this chapter:

  (1) “Chronic condition” means a condition that can be treated or managed, but not cured.

  (2) “Congenital anomaly or disorder” means a condition that is present from birth, whether inherited or caused by the environment, which may cause or contribute to illness or disease.

  (3) “Hereditary disorder” means an abnormality that is genetically transmitted from parent to offspring and may cause illness or disease.

  (4) “Orthopedic” refers to conditions affecting the bones, skeletal muscle, cartilage, tendons, ligaments, and joints. It includes elbow dysplasia, hip dysplasia, intervertebral disc degeneration, patellar luxation, and ruptured cranial cruciate ligaments. It does not include cancers or metabolic, hemopoietic, or autoimmune diseases.

  (5) “Pet insurance” means a property insurance policy that provides coverage for accidents and illnesses of pets.

  (6)(A) “Preexisting condition” means any condition for which any of the following are true within 180 days prior to the effective date of a pet insurance policy or during any waiting period:

  (i) a veterinarian provided medical advice;

  (ii) the pet received previous treatment; or

  (iii) based on information from verifiable sources, the pet had signs or symptoms directly related to the condition for which a claim is being made.

  (B) A condition for which coverage is afforded on a policy cannot be considered a preexisting condition on any renewal of the policy.

  (7) “Renewal” means to issue and deliver at the end of an insurance policy period a policy that supersedes a policy previously issued and delivered by the same pet insurer or affiliated pet insurer and that provides types and limits of coverage substantially similar to those contained in the policy being superseded.

  (8) “Veterinarian” means an individual who holds a valid license to practice veterinary medicine from the appropriate licensing entity in the jurisdiction in which the veterinarian practices.

  (9) “Veterinary expenses” means the costs associated with medical advice, diagnosis, care, or treatment provided by a veterinarian, including the cost of drugs prescribed by a veterinarian.

  (10) “Waiting period” means the period of time specified in a pet insurance policy that is required to transpire before some or all of the coverage in the policy can begin. A waiting period may not be applied to a renewal of existing coverage.

  (11) “Wellness program” means a subscription or reimbursement-based program that is separate from an insurance policy that provides goods and services to promote the general health, safety, or well-being of the pet. If any wellness program meets the definition of insurance in section 3301a of this title and does not qualify for any exclusion, it is transacting in the business of insurance and is subject to the applicable insurance laws and rules. This definition is not intended to classify a contract directly between a service provider and a pet owner that only involves the two parties as being “the business of insurance,” unless other indications of insurance also exist. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7154. Disclosures [Effective July 1, 2025]

  (a) A pet insurer transacting pet insurance shall disclose the following to consumers:

  (1) If the policy excludes coverage due to any of the following:

  (A) a preexisting condition;

  (B) a hereditary disorder;

  (C) a congenital anomaly or disorder; or

  (D) a chronic condition.

  (2) If the policy includes any other exclusions, the following statement: “Other exclusions may apply. Please refer to the exclusions section of the policy for more information.”

  (3) Any policy provision that limits coverage through a waiting or affiliation period, a deductible, coinsurance, or an annual or lifetime policy limit.

  (4) Whether the pet insurer reduces coverage or increases premiums based on the insured’s claim history, the age of the covered pet, or a change in the geographic location of the insured.

  (5) If the underwriting company differs from the brand name used to market and sell the product.

  (b)(1) Unless the insured has filed a claim under the pet insurance policy, pet insurance applicants shall have the right to examine and return the policy, certificate, or rider to the company or an agent or insurance producer of the company within 30 days following its receipt and to have the premium refunded if, after examination of the policy, certificate, or rider, the applicant is not satisfied for any reason.

  (2) Pet insurance policies, certificates, and riders shall have a notice prominently printed on the first page or attached thereto including specific instructions to accomplish a return. The following free-look statement, or substantially similar language, shall be included:

  You have 30 days following the day you receive this policy, certificate, or rider to review it and return it to the company if you decide not to keep it. You do not have to tell the company why you are returning it. If you decide not to keep it, simply return it to the company at its administrative office or you may return it to the agent or insurance producer that you bought it from, provided you have not filed a claim. You must return it within 30 days following the day you first received it. The company will refund the full amount of any premium paid within 30 days following the day it receives the returned policy, certificate, or rider. The premium refund will be sent directly to the person who paid it. The policy, certificate, or rider will be void as if it had never been issued.

  (3) A pet insurer shall clearly disclose a summary description of the basis or formula on which the pet insurer determines claim payments under a pet insurance policy within the policy prior to policy issuance and through a clear and conspicuous link on the main page of the website of either the pet insurer or the pet insurer’s program administrator.

  (4) A pet insurer that uses a benefit schedule to determine claim payment under a pet insurance policy shall do the following:

  (A) clearly disclose the applicable benefit schedule in the policy; and

  (B) disclose all benefit schedules used by the pet insurer under its pet insurance policies through a clear and conspicuous link on the main page of the website of either the pet insurer or the pet insurer’s program administrator.

  (5) A pet insurer that determines claim payments under a pet insurance policy based on usual and customary fees, or any other reimbursement limitation based on prevailing veterinary service provider charges, shall do the following:

  (A) include a usual and customary fee limitation provision in the policy that clearly describes the pet insurer’s basis for determining usual and customary fees and how that basis is applied in calculating claim payments; and

  (B) disclose the pet insurer’s basis for determining usual and customary fees through a clear and conspicuous link on the main page of the website of either the pet insurer or the pet insurer’s program administrator.

  (6) If any medical examination by a licensed veterinarian is required to effectuate coverage, the pet insurer shall clearly and conspicuously disclose the required aspects of the examination prior to purchase and disclose that examination documentation may result in a preexisting condition exclusion.

  (7) Waiting periods and the requirements applicable to them must be clearly and prominently disclosed to consumers prior to the policy purchase.

  (8) The pet insurer shall include a summary of all policy provisions required in subdivisions (1)–(7) of this subsection in a separate document entitled “Insurer Disclosure of Important Policy Provisions.”

  (9) The pet insurer shall post the “Insurer Disclosure of Important Policy Provisions” document required in subdivision (8) of this subsection through a clear and conspicuous link on the main page of the website of either the pet insurer or the pet insurer’s program administrator.

  (10) In connection with the issuance of a new pet insurance policy, the pet insurer shall provide the consumer with a copy of the “Insurer Disclosure of Important Policy Provisions” document required pursuant to subdivision (8) of this subsection in at least 12-point type when it delivers the policy.

  (11) At the time a pet insurance policy is issued or delivered to a policyholder, the pet insurer shall include a written disclosure with the following information, printed in 12-point boldface type:

  (A) the Department of Financial Regulation’s mailing address, toll-free telephone number, and website address;

  (B) the address and customer service telephone number of the pet insurer or the agent or broker of record; and

  (C) if the policy was issued or delivered by an agent or broker, a statement advising the policyholder to contact the broker or agent for assistance.

  (12) The disclosures required in this section shall be in addition to any other disclosure requirements required by law or rule. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7155. Policy conditions [Effective July 1, 2025]

  (a) A pet insurer may issue policies that exclude coverage on the basis of one or more preexisting conditions with appropriate disclosure to the consumer. The pet insurer has the burden of proving that the preexisting condition exclusion applies to the condition for which a claim is being made.

  (b) A pet insurer may issue policies that impose waiting periods that do not exceed 30 days from the effective date of the policy for illnesses or orthopedic conditions not resulting from an accident. Waiting periods for accidents are prohibited. An insurer must issue coverage to be effective not later than 12:01 a.m. on the second calendar day after premium is paid.

  (1) A pet insurer using a waiting period permitted under this subsection shall include a provision in its contract that allows the waiting period to be waived upon completion of a medical examination. Pet insurers may require the examination to be conducted by a licensed veterinarian after the purchase of the policy.

  (A) A medical examination pursuant to this subdivision (1) shall be paid for by the policyholder, unless the policy specifies that the pet insurer will pay for the examination.

  (B) A pet insurer can specify elements to be included as part of the examination and require documentation thereof, provided the specifications do not unreasonably restrict a consumer’s ability to waive the waiting period under this subsection.

  (2) Waiting periods, and the requirements applicable to them, shall be clearly and prominently disclosed to consumers prior to the policy purchase.

  (3) If a policy does not include a waiting period, an insurer may set a policy effective date that is up to 15 calendar days after purchase, provided such policy effective date is clearly disclosed and no premium is earned before the policy becomes effective.

  (c) A pet insurer must not require a veterinary examination of the covered pet for the insured to have their policy renewed.

  (d) If a pet insurer includes any prescriptive, wellness, or noninsurance benefits in the policy form, then it is made part of the policy contract and shall follow all applicable insurance laws and rules.

  (e) An insured’s eligibility to purchase a pet insurance policy shall not be based on participation, or lack of participation, in a separate wellness program.

  (f) A condition for which coverage is afforded on a policy shall not be considered a preexisting condition on any renewal of the policy.

  (g) A policyholder shall be allowed to modify coverage amounts without having the policy cancelled and renewed.

  (h) Coverage for new or existing claims shall not be suspended due to nonpayment of premium. The policy is considered effective until renewal, cancellation, or nonrenewal.

  (i) Unpaid premiums shall not be deducted from claim payments for a covered loss. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7156. Sales practices for wellness programs [Effective July 1, 2025]

  (a) A pet insurer or producer shall not market a wellness program as pet insurance.

  (b) If a wellness program is sold by a pet insurer or producer it shall be subject to the following requirements:

  (1) The purchase of the wellness program shall not be a requirement to the purchase of pet insurance.

  (2) The costs of the wellness program shall be separate and identifiable from any pet insurance policy sold by a pet insurer or producer.

  (3) The terms and conditions for the wellness program shall be separate from any pet insurance policy sold by a pet insurer or producer.

  (4) The products or coverages available through the wellness program shall not duplicate products or coverages available through the pet insurance policy.

  (5) The advertising of the wellness program shall not be misleading and shall be in accordance with the requirements of this subsection.

  (6) A pet insurer or producer shall clearly disclose the following to consumers, printed in 12-point boldface type:

  (A) that wellness programs are not insurance;

  (B) the address and customer service telephone number of the pet insurer or producer or broker of record; and

  (C) the Department of Financial Regulation’s mailing address, toll-free telephone number, and website address.

  (7) Coverages included in the pet insurance policy contract described as “wellness” benefits are insurance. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7157. Insurance producer training [Effective July 1, 2025]

  (a) An insurance producer shall not sell, solicit, or negotiate a pet insurance product until after the producer is appropriately licensed and has completed the required training identified in subsection (c) of this section.

  (b) An insurer shall ensure that its producers are trained under subsection (c) of this section and that its producers have been appropriately trained on the coverages and conditions of its pet insurance products.

  (c) The training required under this section shall include information on the following topics:

  (1) preexisting conditions and waiting periods;

  (2) the differences between pet insurance and noninsurance wellness programs;

  (3) hereditary disorders, congenital anomalies or disorders, and chronic conditions and how pet insurance policies interact with those conditions or disorders; and

  (4) rating, underwriting, renewal, and other related administrative topics.

  (d) The satisfaction of the training requirements of another state that are substantially similar to the training requirements in subsection (c) of this section shall be deemed to satisfy the training requirements in Vermont. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7158. Rules [Effective July 1, 2025]

  The Commissioner may adopt rules to administer this chapter and to effectuate its policies and purposes. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)

• § 7159. Violations [Effective July 1, 2025]

  A violation of this chapter shall be subject to the penalties and enforcement provisions specified in section 3661 of this title. (Added 2023, No. 110 (Adj. Sess.), § 28, eff. July 1, 2025.)