This conversation explains how to control rising pet insurance premiums by understanding what drives costs and how policies actually work. It clarifies that wellness plans are really prepaid care, not true insurance, and that the biggest price factors are age-based increases and rising veterinary costs. Owners are urged to ask insurers how premiums are calculated, avoid switching providers unless their pet is very young with no conditions, and adjust deductibles or reimbursement levels to slow premium growth. A self-insurance savings fund is essential for emergencies, and it’s critical to know whether claims are paid using fixed fee schedules or regional “usual and customary” rates. The overall message: use insurance only for major, unpredictable events and manage the rest proactively to avoid premium creep.
Insurance companies offer three main coverage types: accident-only, accident + illness, and wellness add-ons (preventive care like vaccines and annual exams). Wellness coverage isn’t considered true insurance and is treated differently in disclosures and regulations.
Pet insurance plans typically include:
- Deductible: The amount you pay before insurance starts reimbursing you.
- Reimbursement percentage or coinsurance: The percentage the insurance company pays after your deductible.
- Annual or lifetime limits: The maximum insurance will pay for medical expenses.
- Waiting periods: The time to make a claim.
- Pre-existing condition exclusions: Conditions not covered by insurance.
1) Age-based risk pricing (“birthday pricing”):
Many insurance companies use “birthday pricing,” where pet insurance rates increase with age due to rising veterinary costs. For example, Trupanion openly states this is common.
2) Vet-cost inflation (even without age):
Even if your plan doesn’t state age-based premium increases, veterinary costs can rise over time. The Bureau of Labor Statistics reports rising veterinary service costs, as shown in their annual Consumer Price Index (CPI) tables. This can lead to increased pet insurance costs.
Other factors affecting premiums: Regulators note “typical rating variables” include geography, deductible, copay, limit, species, pet age, and breed.
Some insurance companies adjust pet premiums based on claims history or location. The National Association of Insurance Commissioners (NAIC) requires insurance companies to disclose changes in premiums or coverage related to claims history, pet age, or location.
A. Enroll early to avoid pre-existing conditions and higher premiums.
B. Ask specific questions about coverage before enrolling:
- Do you use age-step or birthday pricing?
- What factors affect my premium during renewal?
In some states, insurers must clearly disclose whether premiums or coverage can change based on pet age, claims history, or address changes. For example, California’s SB 1217 mandates clearer disclosures.
3) Use the plan’s “dials” to ensure affordable premiums.
- Opt for a higher deductible.
- Choose a lower reimbursement percentage (e.g., 70% instead of 90%).
- Select a lower annual limit or one that aligns with your risk tolerance.
These dials can significantly impact premium growth, even if they reduce day-to-day affordability.
4) Avoid overbuying wellness add-ons unless they provide value.
Wellness add-ons often resemble prepaid plans, not insurance. If premium creep is a concern, pay routine care out of pocket and reserve insurance for accidents or illnesses.
Avoid panic-switching when your pet ages. Premium increases may lead you to switch insurers, but the new insurer may label ongoing issues as “pre-existing,” resulting in coverage loss.
Switching insurers is safer when:
- Your pet is young.
- There are no ongoing conditions likely to be excluded.
- The new policy offers better coverage in important areas (coverage wording, limits, reimbursement basis).
Establish a “self-insurance buffer” alongside your policy. Even with insurance, you’ll encounter deductibles, coinsurance, and noncovered items. A dedicated pet medical savings fund can reduce your reliance on maximizing coverage benefits and mitigate premium increases.
