A PetSure policyholder who filed a complaint that the insurer “unreasonably increased” his premiums by more than 266% over a four-year period has lost his case.

The Australian Financial Complaints Authority (AFCA) ruled the increase “has been the result of the correct application” of the insurer’s underwriting guidelines.

AFCA’s rules allow it to take up disputes over concerns with incorrect applications of premium. Insurers have the right to assess and set premiums, but they must also demonstrate the process has been conducted in a fair and consistent manner to justify the rates charged.

AFCA says the evidence produced by the Hollard-owned business showed the premiums it charged the complainant “are in line with the factors considered by the insurer”.

The complainant had asserted the increases from 2014 to last year were unreasonable. An additional quote he obtained from PetSure using his dog’s history and details came up with a lower premium than his existing policy.

But PetSure says the quote was for a cover that differed from what he had bought for his dog.

According to the case document, PetSure explained the premiums were set based on the age and medical history of the complainant’s dog. Other factors such as the level of cover chosen and rising vet expenses were also taken into consideration.

Additionally, the insurer had paid out about $8976 in benefit payments for the dog’s medical treatment.

Pet insurers pay more than 85% of the 500,000 claims made against them annually, data from the Insurance Council of Australia (ICA) shows.

The products were targeted by Choice in October when the consumer group gave pet policies a “Shonky” award, claiming they are “riddled with exclusions and technicalities” and offer poor value to consumers.

But ICA rejects the Choice accusations as overly simplistic and not matching the facts.