Pet Insurance Costs Soar as Insurers Seek Rate Increases
Pet insurance costs have surpassed the cost of veterinarian care, with insurers requesting double-digit rate increases, according to state filings. Federal data from the Bureau of Labor Statistics has shown that national veterinarian costs increased by 8.5% as of August.
However, three pet insurance companies in New Jersey, namely Trupanion, Healthy Paws Pets, and Metropolitan General Insurance Company (MetGen), are seeking much higher rate increases. Trupanion is requesting a 33% increase, Healthy Paws Pets is asking for a 44% increase, and MetGen is seeking a staggering 56% increase.
The companies, unfortunately, could not be reached for immediate comment. Meanwhile, Representative Josh Gottheimer, from New Jersey’s 5th District, has voiced concerns over the proposed increases. In a press conference, he called on the New Jersey Department of Banking and Insurance (NJDOBI) to deny the requests. He also urged the U.S Treasury Department to investigate pet insurance fees nationwide.
Gottheimer stated in a letter to NJDOBI acting commissioner Justin Zimmerman that consumers would be hit with “sticker shock” if these increases were approved. He added that a 10% increase in veterinarian costs should not justify rate hikes ranging from 33% to 56% in just one year.
Regarding the matter, NJDOBI spokesperson Dawn Thomas assured the public that the department takes its review of rate requests seriously. It will carefully examine each request to determine if the proposed changes comply with state law.
While NJDOBI did not provide an immediate list of insurers seeking rate increases, the North American Pet Health Insurance Association reported that the average annual premium for dogs was $640.04 and for cats was $387.01 in 2022. This represents a significant rise from 2018, when premiums stood at $560.06 for dogs and $359.56 for cats.
Brian Hackett, the director of government affairs at the Associated Humane Society, an animal shelter based in Newark, attributed the rising insurance costs to factors such as inflation in pet goods and food, veterinarian retirements during the pandemic, and a shortage of veterinary students. Hackett pointed out that these escalating premiums have led to an increase in animal surrenders as pet owners struggle to afford veterinary care.
The situation has drawn attention to the need for a balance between reasonable and unreasonable rate increases. The call for greater oversight and scrutiny in the pet insurance industry has become crucial to protect both pet owners and their beloved animals.
In an effort to safeguard consumers, Rep. Gottheimer’s push for denial of these rate increase requests is an essential step forward. The review process will determine whether these proposed hikes are justified or if they would place an undue burden on pet owners. Ultimately, the goal is to find a solution that ensures affordable pet insurance coverage while still meeting the needs of insurance companies and veterinary care providers.
As pet insurance costs continue to rise, it is crucial for individuals to stay informed and explore all available options when it comes to insuring their furry family members. Careful consideration should be given to the terms, coverage, and premiums offered by different pet insurance providers. By doing so, pet owners can make informed decisions that best protect the health and well-being of their beloved pets.