Dog abuse for dollars: The 'dramatic' rise of pet insurance fraud

Pet insurance fraud quadrupled in the United Kingdom from 2009 to 2010, and in some cases, pet owners reportedly maimed or even killed their animals to collect insurance cash. Here, a brief guide to the "dramatic" rise of pet insurance fraud:

What's happening?

Dishonest and fraudulent claims on pet insurance policies skyrocketed last year, according to the Association of British Insurers. In 2010, £1,929,900 ($3,060,049) worth of pet insurance fraud was detected. In 2009, just £420,000 ($665,952) was. And the actual amount of fraud is probably "far higher" than what was detected.

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How is pet insurance fraud even committed?

Owners may take out insurance on their pet, then sell or even kill the animal to claim a payout for an early death. They might also stage the fake disappearance of a pet. In some instances, the insured animal might not have even existed. Another scam might include purposefully injuring a pet to mask pre-existing conditions that wouldn't be covered by insurance, or making claims for pricey treatments a pet didn't actually receive. "I am aware of cases where owners have maimed their animals in order to make claims on their policies," says Carys Clarke, an insurance fraud investigator.

How is this happening?

The pet insurance industry is apparently particularly fertile ground for fraud, given that health records for animals are difficult to trace. In some instances, it seems vets are complicit with the fraud. "There's no reason to think that the fraud will slow down any time soon unless the pet health care industry is massively reformed," says Doug Barry at Jezebel.

How many people have animal insurance?

In 2010, 2.3 million dogs and cats in the United Kingdom were insured. Other types of animals can also be covered. In the U.S., pet insurers collected $332 million in premiums in 2009. By 2012, that number is expected to reach $664 million.

Sources: Embrace Pet Insurance, Jezebel, Small Business Trends, Telegraph