In this article:
- Why Can Pet Insurance Rates Go Up?
- Is It Time to Switch Pet Insurance Providers?
- How to Find the Best Rate on Pet Insurance
If the premium on your pet insurance policy has gone up, you're not alone. The cost of veterinarian services increased by 8.4% between August 2022 and August 2023, according to the Bureau of Labor Statistics Consumer Price Index. At least two pet insurance companies have been approved for increases of more than 20% in 2023, Money reports. Other factors that may raise your premium include your pet's age and their medical history.
Is it time for a switch? Rate hikes don't necessarily mean it's time to change insurers (or forgo insurance altogether), but they are a good reason to weigh your options. Here's how to decide whether your current pet insurance is the best value when your premium costs increase.
Why Can Pet Insurance Rates Go Up?
Your pet insurance premium is based on a long list of factors, some of which can change from year to year. If your pet insurance premium has increased, one of these factors may be in play.
- Age: As your pet gets older, they're more likely to have an expensive-to-cover illness or age-related injury. As a result, insurance premiums may increase. Online quotes from one pet insurance provider priced an accident and illness policy with a $250 deductible and 80% reimbursem*nt for a medium mixed-breed dog in Los Angeles at $53 a month for a 2-year-old dog versus $135 at age 10.
- Injury or illness: If your pet has a chronic illness or had a major injury requiring ongoing treatment, your insurance rate may go up to reflect anticipated expense.
- Cost of care: Vet costs have gone up over the past few years. Pet insurance may adjust their premiums to help cover the added cost.
- New city: Pet insurance rates are partially based on costs of care where you live. If you recently moved, your premium may reflect higher costs in your new area.
- Changes in coverage: If you've opted to lower your deductible or increase your coverage, you may be in for a higher premium. Differences in coverage can cost you big, with a plan encompassing accident, injury and wellness coverage costing up to six times as much as an accident-only plan, according to data from the North American Pet Health Insurance Association (NAPHIA).
Is It Time to Switch Pet Insurance Providers?
Premiums can vary widely between pet insurance providers, so it's possible a better rate is out there. But, before you make a switch, answer these four key questions.
1. Does Your Premium Seem Unusually High?
Even with an increase, you may still be paying close to the market rate for coverage. Many factors go into calculating your pet insurance premium: Your pet's age and breed, your location, the policy's deductible and annual or lifetime limits, and the scope of your coverage. Costs also vary from provider to provider.
Start by gathering up your insurance documents and get ready to shop online for similar policies.
2. Do You Like Your Current Insurance?
Costs aside, do you like your policy and provider? Has your current provider paid claims in a timely manner? Are they easy to work with? Or, are there issues beyond cost that make you want to rethink your choices?
3. Does Your Pet Have Medical Issues?
Here's an important consideration: Most insurance companies don't cover pre-existing conditions. If your pet has a recent, ongoing or recurring medical issue, treatment for that issue may not be covered under a new policy. Though providers may make exceptions for "curable" issues—for example, a respiratory infection that cleared up and has not recurred in over a year—the waters may be murkier when, say, skin problems in puppyhood recur later in life. If your pet has a chronic condition such as diabetes, you may lose coverage for it if you switch providers.
A new policy may also have a waiting period, during which certain issues are not covered. You may be able to get around this coverage gap by keeping your old policy in place until the waiting period expires, but maintaining two policies will reduce your potential savings.
4. Should You Still Have Pet Insurance?
Pet insurance can provide peace of mind, but only when a cost-benefit analysis makes sense. Do you need pet insurance? If your pet insurance premium has gone up dramatically, you may want to think about whether you'd be better off putting that money into a high-yield savings or money market account. More on doing this math in a moment.
How to Find the Best Rate on Pet Insurance
Take a moment to think through your options. You can continue your current policy or cancel it and go without pet insurance. You may also want to look for alternatives that allow you to continue coverage at a reduced cost.
Shop Around
Start by checking online for comparable policies. A comparable policy covers the same items (accidents, injuries, wellness and breed-specific conditions, for example) with the same deductible, reimbursem*nt level and annual or lifetime limit.
You might also want to consider adjusting a few parameters to see whether you can get a more affordable price. A few ideas to try include:
- Raise your deductible
- Lower your reimbursem*nt rate (70% vs. 90%, for example)
- Choose less comprehensive coverage (accident only vs. accident and illness)
- Add a lifetime or annual cap
- Ask about a multi-policy discount if you have other pets or other types of insurance, like home or auto, with the same company
Check With Your Current Provider
Once you have a little intelligence on pricing, contact your current provider to see whether there's anything you can do to lower your premium. They may suggest some of the factors listed above, such as raising your deductible, or they may have suggestions based on your individual situation.
Do the Math
Running numbers on insurance is tricky because it involves the unknown. Will your pet live out their remaining years in picture-perfect health? Or, even as you are reading this, are they in the backyard eating something they shouldn't? Unpredictability is the reason you get insurance in the first place. Calculating the costs for every potential scenario simply isn't possible.
But you can ask yourself a few questions to get to the math of things:
- Can you afford a major vet expense without insurance coverage?
- How little coverage are you comfortable with?
- Does your pet have ongoing health issues, a family history of medical problems or are they accident-prone?
- Do exclusions and limitations make switching pet insurance providers impractical?
The Bottom Line
In the past few years, the price of everything seems to have escalated. Reckoning with these increased costs—and, in some cases, re-examining their worth—is part of adjusting to the current financial reality.
If your pet insurance premium has increased, look again at the value you derive from having this coverage. It may be that a few extra dollars each month are well worth the stretch to keep your plan for covering vet expenses in place. You may also find that adjusting coverage or changing providers makes pet insurance more affordable, though it's critical to make sure you aren't sacrificing needed coverage for pre-existing conditions.
Finally, if re-evaluating pet insurance costs is part of an overall financial tune-up, you may also want to consider your overall monthly budget and access to credit. You can review your credit score and credit report from Experian at any time to help ensure your financial options are as wide open as possible.
