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An Analysis of Pet Health Care Insurance

  • Keith Schewr
  • Nasser Daneshvary
  • Donald W. Hardigree

Although pet health insurance services have been available in the U.S. for the last ten years, to date no study of this market has been completed. Using data from a 1990 survey of pet owners and employing probit models, the authors examine the likelihood of insurance purchase and investigate the adverse selection problem noted in the human health insurance literature. The results suggest that over one half of the pet owners are willing to purchase insurance and that the adverse selection problem exists. The implication for insurers is that the potential market is sizeable, and that establishing varying premiums according to individual characteristics of pets is an appropriate policy.

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Article provided by Western Risk and Insurance Association in its journal Journal of Insurance Issues.

Volume (Year): 17 (1994)
Issue (Month): 1 ()
Pages: 21-34

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Handle: RePEc:wri:journl:v:17:y:1994:i:1:p:21-34
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