Progressive Corp. is providing collision coverage for customers' dogs or cats at no additional premium cost. It will pay up to $500 (EUR 340) if a customer's dog or cat is hurt or dies in a car accident.
"It's an unusual and interesting benefit," said Jean Salvatore, a senior vice president for the Insurance Information Institute. She was not aware of any other company offering a collision benefit for pets.
"Auto insurance is a very competitive market, and companies are always looking for ways to differentiate themselves. If this becomes popular, I'm sure others may look into it as well," Salvatore said.
There are more than 150 million pets in the U.S., and Americans spend more than $40 billion ( EUR 27 billion) on their pets annually, according to a recent Insurance Information Institute study.
The Progressive benefit has been in place since Sept. 6, and it is still too soon to determine if the company's undetermined cost of offering it will be offset by better sales, Progressive spokeswoman Leah Knapp said.
The new Progressive benefit is not pet insurance, which some people obtain to help them pay veterinarian costs.
A Progressive strategist said the company saw a pets benefit as an auto insurance market opportunity.
"We found no coverage that was even similar to it," said Geoff Souser, Progressive product manager for auto insurance. "We have pets, too, and we know how important they are to our families. We are always looking for new and different ways of delivering value to our customers, and this seemed like a logical extension."
Progressive is the third-biggest auto insurer in the U.S., ranking behind State Farm and Allstate.
State Farm and Allstate confirmed a pets benefit is not in the collision part of their policies.