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Pet owners across the nation are getting a costly surprise a year into their pet insurance plans. The affordable coverage they initially bought gives way to soaring premiums at renewal.
The increases can be eye-popping, with some social media users reporting their pet insurance premiums jumped from
Pet insurers and insurance professionals say rising veterinary costs, pet age, breed, location, and the claims experience of broader groups of animals can all affect premiums.
And there’s another wrinkle for consumers facing a big increase: Shopping around for coverage may not be as simple as it is with other insurance types.
The allure of low introductory prices for pet insurance
Some companies price aggressively to attract new business, Rami Sneineh, vice president and licensed insurance producer at Insurance Navy Brokers, told Insurify.
“To win new business, some insurance companies price policies low in the first year,” he said. “The actual cost of covering that pet is rarely reflected in that first-year premium.”
Insurers wary of pre-existing conditions
For owners of pets with pre-existing conditions, securing new coverage can be difficult, bordering on impossible. Many insurers won’t cover a chronic or recurring condition the pet developed before the policy took effect.
Owners face an unpleasant choice — pay the higher renewal premium their current insurer offers or switch companies, potentially losing coverage for an expensive medical condition.
This difficult decision comes at a time when pet insurance premiums have climbed substantially in recent years, particularly for dogs.
The average annual
Cat insurance rates have increased more slowly. The average accident-and-illness premium for cats rose from
Insurify initial-quote data also shows that otherwise similar older pets can cost substantially more to insure than younger animals. A 10-year-old dog, for example, may cost three times as much to insure as a 1-year-old canine, per Insurify data listed below.
Pet insurance premiums are growing and so is the business
More than one-third of
As the number of pet owners climbs, the number of insured animals does as well.
About 7.6 million pets were insured in
Altogether, the pet insurance industry collected about
Rising vet bills are showing up in insurance premiums
One major factor behind pet insurance pricing is the rising cost of veterinary care. Veterinary services inflation continues to substantially outpace the baseline national consumer price index (CPI), according to data from the
“The cost of veterinary care has increased significantly, and this is reflected in renewal costs,” said Sneineh.
“Better diagnostics, more specialty care, and the same kind of rising medical costs you’ve seen in human healthcare are all pushing vet bills up,”
“Pet insurance is a regulated product, so premiums aren’t changed arbitrarily,”
Rates are filed with state regulators and can change at renewal because of “rising veterinary costs, a pet’s age, and the growing use of advanced treatments as families increasingly pursue more sophisticated care for their pets,” Galante said.
Pet age affects premiums, but not always in the same way
Pet insurance premiums can depend on numerous factors, including species, breed, age, location, coverage level, and deductible.
But not all insurers treat age the same way.
“Insurance companies weigh that risk the same way they’d weigh a driver’s age in an auto policy, and older pets tend to generate more claims,” Sneineh said.
Fetch includes a pet’s age among the factors that can affect renewal premiums, Galante said.
Shopping around can help, but switching carries risks
Pet owners facing higher premiums don’t necessarily have to accept the renewal price without question. But consumers should investigate what they’ll lose as well as what they’ll save before changing insurers.
To save on pet insurance, experts recommend pet owners:
Buy coverage while a pet is young and healthy. Younger animals often cost less to insure, and enrolling before medical problems arise can reduce the number of conditions that are excluded as pre-existing.Compare more than the initial premium. Ask insurers how age affects future pricing and whether an individual pet’s claims can affect renewal premiums.Ask how the insurer determines renewal rates. Different insurers use different rating approaches. Ask specifically about age, location, veterinary inflation, individual claims, and the claims experience of broader groups of pets.Ask whether new-customer pricing differs from renewal pricing. A low initial quote is less useful if the insurer’s pricing structure changes substantially after enrollment.Consider changing coverage before changing insurers. Ask whether increasing the deductible or changing reimbursement and coverage levels could reduce the premium while preserving existing coverage.Check pre-existing-condition rules before switching. Don’t cancel an existing policy until you know how the new insurer will treat conditions already in the pet’s medical record.
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The post Pet Insurance Rates Can Soar at Renewal, but Switching Insurers May Be Difficult | Insurify appeared first on Insurance News | InsuranceNewsNet.
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