Taking care of pets is becoming increasingly expensive for many Americans. Nationwide Pet, the leading pet insurance provider in the U.S., announced it will drop about 100,000 policies between now and the summer of next year. This decision stems from the rising costs of veterinary care, coupled with other inflationary pressures.
“Inflation in the cost of veterinary care and other factors have led to recent underwriting changes and the withdrawal of some products in some states — difficult actions that are necessary to ensure a financially sustainable future for our pet insurance line of business,” Nationwide stated in a recent announcement. Affected policyholders will receive written notification regarding this change. The company emphasized these steps are essential for the long-term viability of its business.
“We certainly empathize with the disappointment many of our pet families feel and will fully stand by the protections for which they have paid through the end of their current term,” Nationwide added.
Rising costs pose a significant challenge for pet owners, particularly those facing financial strain due to persistent inflation. This situation also raises concerns about the potential for increased instances of “economic euthanasia,” in which pets are humanely euthanized due to their owners’ financial difficulties.
The pet insurance situation mirrors challenges in other areas of insurance. Vehicle insurance costs rose 20.3% in the year ending in May, a trend driven by factors, including rising repair costs and more frequent and severe accidents. The home insurance market is also experiencing difficulties. Climate change is contributing to more frequent and severe extreme weather events such as hurricanes, storms, and wildfires. Insurers, especially in areas most impacted by extreme weather, are either increasing premiums or withdrawing coverage altogether, which is impacting the affordability and availability of home and fire insurance.
Mark Friedlander, spokesperson for the Insurance Information Institute, a nonprofit industry association, previously told CNN that homeowners insurance costs in the United States increased by approximately 10% to 12% last year. Insurers are passing higher costs, stemming from increased replacement expenses and the rising cost of re-insurance — insurance for insurers to limit their risks— onto consumers. Consequently, some insurers in states like California and Florida have temporarily halted issuing policies altogether.
