Nationwide says it’s dropping thousands of pet insurance policies due to inflation
By Ramishah Maruf, CNN
New York (CNN) — Taking care of Fido is getting out of reach for more Americans.
Nationwide Pet, the country’s largest provider of pet insurance, says it is dropping about 100,000 policies between now and next summer to keep up with spiraling costs in vet care.
The move comes as other types of insurance, from homeowners to vehicles, are increasingly becoming harder to obtain for many Americans.
“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 said in an announcement last week.
Impacted policyholders will be notified in writing, the company said.
Nationwide said it’s taking steps like this to continue its business in the future.
“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 said.
Rising costs
Price increases are a double whammy for pet owners whose household finances have been weakened by persistently high inflation and for those who fear for rising instances of “economic euthanasia,” when animals are humanely put to death for financial reasons.
It’s been an expensive year to keep up with insurance, adding to the influx of high prices hurting American families’ wallets.
Vehicle insurance rose 20.3% for the 12 months ending in May, according to the latest Consumer Price Index data. Many factors are behind that trend, including rising car repair costs and more severe and frequent car accidents.
The home insurance market is also falling apart. Climate change is increasing the frequency and severity of extreme weather such as hurricanes, storms and wildfires. Insurers, especially in areas most impacted by extreme weather, are raising their premiums, or pulling out altogether, impacting the affordability and availability of home and fire insurance.
There was roughly a 10% to 12% increase in homeowners’ insurance costs last year in the United States, Mark Friedlander, spokesperson for the Insurance Information Institute, a nonprofit industry association, previously told CNN.
The higher costs insurers face from higher replacement costs and re-insurance, the type of insurance used by insurers to limit their own risks, is getting passed down to consumers. Insurers in states like California and Florida have paused issuing policies altogether.
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CNN’s Elisabeth Buchwald, Nathaniel Meyersohn, Alicia Wallace and Anna Bahney contributed to this report.
