Is Pet Insurance Still a Good Investment?
When a beloved pet falls ill or suffers an injury, most owners are willing to do whatever it takes to provide the best care. However, emergency veterinary visits can quickly accumulate thousands of dollars in costs. It’s no surprise, then, that pet insurance has become increasingly popular in recent years. Correspondingly, the price of this insurance has also experienced a significant surge.
One concerned pet owner, Carrie LaRose, who is a WBZ-TV viewer, asked us a compelling question: Why have pet insurance prices suddenly skyrocketed?
Currently, 5.6 million pets are insured in the United States. One such pet is LaRose’s six-year-old golden retriever, Fenway. LaRose has maintained pet insurance for Fenway since he was a puppy. She expressed relief at having the coverage two years ago when Fenway unexpectedly suffered a seizure. “He stopped breathing. He was writhing. He was foaming,” she recounted to WBZ-TV.
The Cost of Coverage
LaRose asserted that, thanks to her pet insurance policy, she easily saved $5,000 on medical tests and necessary medications. Initially, her monthly payments were quite affordable. In 2018, she paid $39.93 per month, a rate that remained consistent for two years. However, the price increased to $44.44 in 2020, $57.90 in 2021, and $71.62 in 2022. By 2023, the premium reached $95.08. This year, the cost jumped to a considerable $129.28 per month.
“It’s more than tough. It doesn’t fit it into the budget at all,” LaRose told WBZ.
My own experience mirrored this trend. Pet insurance for my four-year-old golden retriever, Ringo, escalated from $78 per month to $118 per month this year.
Unclear Explanations
The rationale behind these price hikes remains somewhat elusive. Although LaRose’s insurance provider, Trupanion, guarantees on its website that it will not raise the annual premium due to claims or the pet’s age, the company was contacted by WBZ for an explanation for Fenway’s considerable price increase but did not respond.
Regarding the more than 50% increase in my bill, the insurance company suggested that the price adjustments were “based on the pet’s geographic region … the rising cost of veterinary care in the United States and inflation due to equipment improvements, medication and other factors.” They then added: “It’s just like home and auto insurance.”
Pet insurance companies are regulated by the Division of Insurance in Massachusetts. The agency indicated that companies have blamed rate increases on “evolving technology and increases in the costs of supplies.”
Harrison Stenson, the pet insurance coordinator at Angell Animal Medical Center in Jamaica Plain, believes in the importance of insurance and assists pet owners at the hospital with any policy-related issues or questions. It’s important to note that he neither sells insurance nor partners with any insurance companies; his primary focus is to help customers prepare for potential medical expenses.
“Every day, I see people who probably couldn’t get their pet’s cancer treatment if they didn’t have insurance,” Stenson observed.
However, he recognizes significant problems with the industry, particularly its lack of transparency. “It is definitely tricky for me to understand what’s happening with the prices. There’s not a lot of transparency,” he stated. “One of the biggest issues I have when recommending a policy for people is just not knowing what that insurance company is going to do with their prices. In the next year. In the next five years. I just don’t know, and I really wish I did.”
Insurance companies can even terminate coverage. For example, Nationwide Insurance recently announced it was canceling coverage for approximately 100,000 pet owners because of financial difficulties.
LaRose is unable to switch insurance companies for her dog due to a pre-existing condition.
Is it Worth the Investment?
So, considering all these factors, is pet insurance a valuable investment? If you’re spending $1,000 annually on pet insurance, the cost over ten years would be $10,000. This money could be allocated to an emergency savings account. However, this approach requires considerable financial discipline, and many appreciate the peace of mind that comes with knowing they are protected from major medical problems.
At the end of the day, our pets are invaluable. Insurance is costly, and the price appears to only be going up.
