Fury as Lloyds insurance cull puts pets' lives 'at risk'

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

Key Points

• Lloyds has stopped renewing pet insurance policies

• Pets with pre-existing conditions may now struggle to get cover

• MoneySavingExpert.com users livid about decision

Halifax, also part of Lloyds Banking Group, stopped selling new policies last August and stopped renewing cover in September.

It's a massive blow for consumers with an older pet, or an animal with a pre-existing medical condition. A new policy could be more expensive, while any ailment probably won't be covered, as most insurers won't cover pre-existing conditions.

Even though policies were renewed every year, Lloyds described some as 'lifetime' leading many owners to believe they could get cover until their pet died.

What's more, if treatment is still ongoing as part of an initial claim made while the cover was in force, once the policy has ended, Lloyds and Halifax customers will now have to pay for the remainder of the treatment themselves.

This could lead to some families choosing between staying debt-free or treating their pets.

Forum users up in arms

MoneySavingExpert.com forum users are livid about the decision. Many who paid for 'Plus' and 'Extra' policies with the banking giant believe this meant their animals were covered for life, which is why they didn't originally go for the firm's standard annual policies.

Helen Armitage, from Portsmouth, says: "My West Highland terrier has had a chronic skin condition since he was young and he also suffers from ear infections.

"Over the years he's had about £1,500 to £2,000 in claims per year. While I can get cover elsewhere, nobody will take on his pre-existing conditions. He needs ongoing care so I've got to foot the bill now.

"When I took the policy out with Halifax I was told it was a lifetime policy and that should he get anything that was a chronic condition it would be covered.

"I've made many phone calls and Halifax has admitted when I took my policy out I was sold it as a lifetime cover and they've apologised. But if it's so easy to pull out of the market, surely this means other insurers could pull out too."

'Shocking'

Deborah Moran-Sugden, from Selby, North Yorkshire, reports similar problems. She says: "I took out Halifax Extra pet insurance six years ago after much research into the different pet insurance products on the market at that time.

"I chose Halifax Extra based on the information provided on the Halifax website, which said that it offered a comprehensive, and I quote, 'life-long and continuous' pet insurance policy.

"By withdrawing its pet insurance, Halifax hasn't just cancelled my dog Billy-Bob's life cover, it's effectively removed all cover and left us in a no-win situation. No insurer I've spoken to will cover any future problems that may be related to his pre-existing condition."

Online forum Consumer Action Group has also been flooded with posts from worried customers. Co-founder Marc Gander says: "People paid extra for lifelong pet insurance in good faith in order to do their best for their beloved animals. 

"It is a shocking breach of that good faith for these insurers to terminate the schemes in this way. Some customers who have complained have received derisory 'gestures of goodwill' but have still been left in the cold as far as the care of their pets is concerned. 

"These insurers are treating their customers unfairly and some of our members will be starting court actions in the next week or so in order to bring the insurers to heel."

What can you do?

Lloyds says if customers are unhappy they should get in touch and it will speak to anyone about their concerns. While the bank hasn't confirmed it will offer compensation to unhappy customers, some forum users have reported receiving money back.

For now, search for the next best policy, and if you feel you have been misled or mis-sold, take up a complaint first with the bank and, if you get nowhere, then with the Financial Ombudsman Service.

MoneySavingExpert.com creator Martin Lewis says: "The way the bank is acting over something as cherished as pets is a disgrace.

"Many people have what they believe or were told was lifetime cover and now it doesn't work, and those whose pets have had conditions since taking it out are left high and dry.

"This isn't some struggling company, this is one of our major banks. It's doing it for its commercial reasons, but I think it has a moral obligation to keep covering existing customers."Let's be absolutely plain. If people are going to be forced to shell out for £100s or £1,000s a year in medical costs, they may need to chose between feeding their kids and keeping their animal alive.

"I hope these banks consider some customers will blame them for having their animals put down.

"To those affected, don't give up. Contact the bank and push hard for compensation. If that doesn't work, you've a right to go to the free Ombudsman. 

"It can adjudicate if you haven't been treated fairly, and if you were told you had lifetime cover and held up your end by paying the premiums, it's arguable, though no guarantee, that is mis-selling. Take 'em on."

What Lloyds says

A spokeswoman for Lloyds says: "What is known as a 'lifetime' policy is a general wording that has been used to describe certain policies. Halifax and Lloyds TSB policies were never referred to as 'lifetime' policies in the terms and conditions.

"The terms and conditions were always clear that cover for vets' fees was provided up to a certain amount for the period of insurance, subject to cover remaining in force and premiums paid up to date." 

The spokeswoman adds that as policies were renewed annually, terms and conditions were subject to change.

The bank says its decision to withdraw from pet insurance is so that it can focus on its "core" markets of home, motor and travel insurance.