As pet insurance becomes more popular, owners are complaining about rising prices and rejecting claims


When Jeff Fosse welcomed Lucy, a Boston terrier, into his family in 2014, protecting her health was a major concern. His vet recommended pet health insurance from a company called Trupanion, and Foose purchased it. He estimated that the company’s policy promised that it would never raise his premiums by more than 20% per annum.

This pledge did not last long. Tropanion has raised Lucy’s premiums more than that in some years, his documents show, and Tropanion just told him he and other pet owners in New Jersey could see their premiums rise 33.6% this year. To make matters worse, Voss says he can’t change insurance companies because Lucy has a skin condition that the new insurance company likely won’t cover.

Seattle-based Trupanion, Inc. The leader in pet insuranceHe says he should raise the premiums because vet costs are going up. Voss is not happy. “I get mad when someone sells me something and they make an implied promise they don’t deliver,” he told NBC News.

There were about 5.4 million pet insurance policies in effect across the United States in 2022, up more than 21% from the previous year, according to the Pet Health Insurance Association of North America. Trupanion has insured 1.5 million pets as of December 2022, according to the state of its financial filings, nearly triple the number it made in 2018.

Since 2018, the number of pets insured in the United States has increased nearly 23% annually, on average. Approximately 80% of insured pets are dogsAnd cats make up the rest. As pet insurance has grown in popularity, so has consumer criticism. Vets say they fall into three main categories — long waits for claims to be paid, denial of claims for pre-existing conditions and premium increases.

Jeffrey Foss Boston Terrier, Lucy. (courtesy of Jeffrey Foss)

The costs of goods and services are high everywhere and pet care is no exception. Government data shows the costs of veterinary services It rose 10.6% in Julyon an annual basis.

Trupanion’s recent increases are significantly below that rate, regulatory documents and customers show. Victoria Boyd, for example, shares her Las Vegas home with two Cockapoos, a Shih Tzu and a Labrador retriever, and said the cost of covering veterinary care with Tropanion has become a financial burden — approaching $400 a month. Like Foose, Boyd says she’ll have a hard time getting coverage on one of her dogs from a new insurance company because of a pre-existing condition.

Boyd’s documents showed that in just two years, the cost of insuring one Cockapoo increased by 57%, from $77.94 to $122.11. In June, her monthly premium covering her lab, Chance, was up 38% from 2022. Boyd said she never filed an insurance claim on Chance.

Victoria Boyd with her two Cockapoos, Zuko and Sandy.  (Courtesy of Victoria Boyd)

Victoria Boyd with her two Cockapoos, Zuko and Sandy. (Courtesy of Victoria Boyd)

Boyd, who has been a customer of Trupanion since 2017, said she was a fan of the insurance company at first. “Their rates were great before, and the pros of Trupanion are direct payment to vets and no payment caps for condition or disease,” Boyd told NBC News. But now, she said, “I feel like a bait and switch — you got me in at these great prices and I’m almost boxed in.”

Margie Toth, president of Tropanion, said she was disappointed by Boyd’s view. “I think we’re working hard to make sure we explain our value proposition,” she said. Toth said the company’s higher prices are the result of cost inflation for vets, and higher costs of care in a particular area for a client.

Toth did not say why Trupanion had raised Foose’s premiums above the maximum stipulated in his policy. She has said, “If there are any changes to a client’s policy, coverage, benefits, pricing, everything is always detailed in an annual summary and will provide information regarding changes to our coverage.”

Companies that offer pet insurance are supervised by government regulators, and some of Trupanion’s recent demanded price increases are well above the overall inflation rate. In June, the company asked the Florida Insurance Regulatory Authority for a 48.9% rate increase on top of the 14% increase that the regulator approved in February. Earlier this year in California, Trupanion asked for a 28% increase; The regulator approved an increase of only 12%.

Victoria Boyd's Labrador Retriever, Chance, and Shih Tzu, Deacon.  (Courtesy of Victoria Boyd)

Victoria Boyd’s Labrador Retriever, Chance, and Shih Tzu, Deacon. (Courtesy of Victoria Boyd)

In filings with the Securities and Exchange Commission, Tropanion says that if government regulators delay its price increases, the company’s financial condition could be adversely affected. Bradley Savallo, an analyst covering Trupanion Inc PAA ResearchHe said he believes Trupanion will continue to face regulatory opposition to increasing its price and that he is betting that its share price will fall. Savallo noted that California policyholders account for roughly 20% of the company’s revenue.

NBC News compared the rates of five major pet insurance providers — Embrace, Figo, MetLife, Pets Best, and Trupanion. The same breed, age, and size of the dog was used for each quote, with a goal of 90% coverage and a discount as low as $200 to $500. Trupanion’s rate came out at three to four times the costs of the other four providers on a 3-year-old and 6-year-old Jack Russell terrier mix.

When asked about the reason for the price differences, Laura Bainbridge, Trupanion’s head of corporate communications, said, “Products cannot be compared across pet insurance. Trupanion will generally offer the fewest number of exclusions—covering conditions a pet may be predisposed to.”

Toth said the company’s product is a good value because it doesn’t have coverage limits or caps like other offerings do and pays the vet directly. “You have a lifetime coverage that covers the unexpected,” Toth said. Designed for your pet’s life.

Still, Kevin Brasler, Executive Editor of Consumer checkbook“Pet insurance is a really expensive product. It seems inexpensive at first when you’re only paying $40 a month. But there’s a lot that has to go wrong,” she said, an independent organization that helps consumers shop for the best prices on goods and services. with your pet to make pet insurance a good deal.”

Trupanion has made losses since its inception and last December reported an accumulated deficit of $172 million. It financed its operations by issuing shares and borrowing.

The company’s stock has been volatile; It rose to $122 in 2021, and has recently been trading around $30.

New customers come to Trupanion from its website and referrals, but much of its business comes from vets who recommend its products to their clients, as did the vet at Foose.

Jeffrey Foss's family with their Boston terrier, Lucy.  (courtesy of Jeffrey Foss)

Jeffrey Foss’s family with their Boston terrier, Lucy. (courtesy of Jeffrey Foss)

Frances Wilkerson is a veteran vet which reviews pet insurance offerings on its Pet Insurance University website. Unlike other review sites, Wilkerson is an independent valuer that says it receives no commissions or other remuneration for its research. She said more regulation is needed, particularly in terms of pricing, to protect pet insurance buyers.

“I’d really like consumers to have some clarity about how much their premiums can increase each year,” she said.

Darrell Rawlings, founder and CEO of Trupanion, said his company does not anticipate how much premiums will rise because it is unknown. “We’re not trying to predict what’s going to happen in veterinary medicine 5 to 10 years down the road,” he said. “What we’re trying to do is understand the cost and show it over the next 12 to 18 months so we can price our members appropriately.”

Until recently, industry regulations were sparse. Last year, the National Association of Insurance Commissioners, a group of state auditors, Drafted a “model pet insurance law” To “promote the public welfare by establishing a comprehensive legal framework” covering product sales. Now, some states are implementing new rules.

One is Maine, whose Department of Insurance recently advised pet insurance companies that they can no longer postpone the effective date of a new policy for days or weeks. These delays are designed to prevent customers from filing a claim for an accident that has already occurred, for example. In July, Trupanion sued an insurance supervisor in Maine seeking a so-called declaratory ruling that would allow the company to continue to push back the effective dates of the new policies.

said Emily Brill, founder and publisher of The Canine Review, an independent news service covering the pet industry Other states are likely to follow Maine’s example So-called waiting times, a big source of consumer complaints. “As more states want to get rid of waiting periods for accidents and put huge limits on all kinds of waiting times, it’s sending insurance companies into a panic,” Brill said. She added that Trupanion is more at risk than other insurance companies, because the company’s premise is to provide coverage that has no limits or exclusions. “If they start to not cover everything, that’s a problem because it goes against their formula.”

Trupanion pricing is audited in California. Last year, the state’s insurance regulator alleged that Trupanion’s insurance unit, American Pet Insurance, had violated state laws by charging customers different premiums based on the sales method the customer used to purchase the policy. The notice said the company had violated a California law that requires an insurance company to charge its “lowest qualifying premium”. Tropanion settled without admitting any wrongdoing.

Regarding Trupanion’s price hike, Brasler, of Consumers’ Checkbook, said, “It’s hard to tell if they’re doing it because it’s a money grab or if their risk has gone up. The feedback is at least they’re pushing claims — it’s not like they’re turning down a lot of claims.” That said, I wouldn’t buy pet insurance.”

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