Eagle eyed pet parents may have noticed annual increases in their pet insurance premium. The first couple of times, you may have shrugged it off. Eventually the alarm bells start to sound. Exactly how high do pet insurance costs climb? Ah, now that’s a smart question to ask!
Pet insurance companies usually don’t know exactly how much they will be charging you, but it’s safe to assume you will experience (very) significant rate increases over your pet’s lifetime. Here we will discuss some specific reasons your rate can increase, and some clever tricks to ballpark the premium you may be paying for pet insurance in your pet’s golden years.
Why do pet insurance premiums increase?
Predictable factors cause your pet insurance premium to increase over time:
Age
Some companies have stated that they do not increase premiums “just” because your pet got older. The reality is, pets tend to need more medical care as they age. It’s safe to assume you will pay higher pet insurance rates as your pet gets older.
Location
Moving to an area where the cost of living is higher can trigger a pet insurance rate increase. This makes sense, because veterinary care costs will be higher in your new home. The good news is that the opposite can also be true: moving to an area with lower costs of living can trigger a rate decrease, which is always satisfying to see.
Heavy Use
Some pet insurance companies will raise your rates when you use pet insurance a lot. This happens when your pet is either really sick, or has a long term health problem. This can feel especially unfair, since protection from big medical expenses is exactly why you got pet insurance in the first place.
Types of Rate Increases
To understand the pet insurance industry’s secrets for rate increases, you need to know the two major factors behind rate increases:
1. Risk: The Predictable Increase
Insurance companies do their best to statistically predict exactly how much risk is involved in insuring your pet. This means crunching data on your pet’s species, breed, age, physical location, and possibly any other variables they can gather about you and your family.
These facts come together to paint a picture of how much the pet insurance company needs to charge you each year. Of course, overhead and profits are added, and there you have it: your premium is set for the year.
Pet insurance will regularly re-evaluate the risks involved, and adjust your pet insurance premium appropriately. Since your pet never changes much, your pet’s risk profile usually won’t change much either.
Your risk profile is the part of rate increases pet insurance companies could provide a ballpark estimate on, because they already have a plan penciled in, at the very least. It can be hard to get an understandable answer when you ask how much your pet insurance company plans to increase your rates based on your risk profile. But hey, it’s worth a try to ask!
2. Inflation: The Unpredictable Increase
Inflation is a universal fact, which is not influenced by the details of your pet. You aren’t “charged” more or less inflation than the next person. The cost of everything just increases over time.
The problem is, no one gets a lot of advance notice on how much inflation will cost. When pet insurance companies tell you they “don’t know” exactly how much your pet insurance premiums will increase, they are usually talking about the unpredictable nature of inflation.
Get A Sneak Peek
So, you want to get to the bottom of how much pet insurance plans to increase your premiums? Here’s a simple trick:
Step # 1
Run a quote for your pet at their current age.
Step # 2
Run an identical quote for your pet at the oldest age the pet insurance company will provide a quote for.
The outcome may shock you.
Pet insurance companies may offer seemingly low rates of $50 a month for your 1 year old pet, only to hike that up to $600 a month when your pet is elderly. You may need to fidget with the quote to find the highest age pet they provide a quote for. As long as your pet insurance company allows older pets to sign up for insurance, you can peek at their ultimate premium increase game plan.
Some insurers only allow younger pets to sign up. That leaves you in the dark on what kind of rates you may face in your pet’s old age. At that point, you have to decide whether it’s worth the risk. If you are in this situation, remember that once your pet develops an illness, that illness probably won’t be covered if you later need to switch pet insurance companies. So please choose your pet insurance carefully the first time!
Your Sneak Peek Is No Guarantee
Ok, so you now know how much a pet insurance company charges for your 1 year old pet as of today, and for your 10 year old pet as of today. Cool, that’s a major improvement.
Even in the best case scenario, inflation will likely increase the amount you actually pay for your pet’s insurance over the years. But, at least you got a preview of your pet’s possible premium increases.
How We Can Help
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Check out your Pet Membership options to join our community today. And yes, we show you all the current membership fees we charge, without hunting around. We want you to know what you are getting into.
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