Lloyds Banking Group (LBG) has caved in to huge public and media pressure by announcing it will offer new policies to its pet insurance customers whose animals have a medical condition, after the bank originally axed cover.

The group's U-turn comes after furious Halifax and Lloyds TSB pet insurance customers were left worrying about their animals' future after the pair, both part of LBG, stopped renewing all annual pet insurance policies from late last year (see the Lloyds fury MSE news story).

Key Points

  • 4,000 pet insurance customers to have cover reinstated
  • Bank hammered after axing cover, putting pets' lives at risk
  • U-turn follows huge media campaign

Customers whose pets had a medical condition covered under a Halifax or Lloyds TSB policy will be offered new insurance later this year.

To make the original decision worse, both banks described policies as 'lifetime' in marketing literature, leading many owners to believe they could get cover until their pet died.

We have campaigned heavily for customers to have cover reinstated (see the Proof Lloyds sold lifetime policies MSE news story) as has site founder Martin Lewis on ITV1's Daybreak.

The key problem with axing cover was any ailment developed since first buying insurance would not be insured on a new policy, as providers normally don't cover pre-existing conditions. Therefore, owners may have had to choose between feeding their family or paying for a vet.

A ruling by the independent arbitrator, the Financial Ombudsman Service, in March saw Halifax told to continue covering a pet with a pre-existing medical condition for three years, after a customer complained (see the Ombudsman pet ruling MSE news story).

It was judged to have "not handled fairly its decision to withdraw from the pet insurance market".

New policies

LBG is unable to give full details yet on what new policies it will offer.

It is aiming to let its 4,000 affected customers whose pets have a pre-existing condition know full details by the end of June, though they have been sent update letters this week explaining they will eventually be offered cover.

Anyone who needs to make a claim in the interim should contact either Lloyds TSB on 0845 601 3073 or Halifax on 0845 601 3122.

About 25,000 pet owners had cover with the two brands, but only those with a condition originally covered by the pair will be offered new insurance by LBG.

Martin Lewis says: "Lloyds has rightly received a kicking. Withdrawing its pet cover left many to consider whether keeping their pets is possible or face the consequences of having to have them put down.

"I'm delighted to see it's turned this around on the back of an Ombudsman ruling and persistent media and public pressure, yet it should never have put its customers through this in the first place. We await the details."

When was cover axed?

Lloyds TSB stopped selling new policies in October last year. Any existing annual policies will still run until expiry, but any that ended after 1 February this year, won't be renewed.

Halifax stopped selling new policies last August and stopped renewing cover in September.

An LBG spokeswoman says: "We are writing to all Halifax and Lloyds TSB pet insurance customers who have pets with pre-existing medical conditions to confirm we are aiming to offer them a completely new policy.

"This is a complex process that will take us time to work through, but we're doing everything we can to move this forward quickly."

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