More than 57,000 pet owners will see their pet insurance premiums rise sharply following the California Department of Insurance’s approval of substantial rate increases for Lemonade pet insurance policies. The CDI green-lighted an overall increase of 14%.
Currently, Californians with Lemonade pet insurance pay an average of $710 annually for their coverage. With the approved rate increase, the average premium will jump to $827 per year.
The rate increase will take effect on Nov. 24, 2024, and will affect all new policies and 57,471 existing policies.
Why the increase?
Inflation and the rising cost of veterinary care are driving pet insurance rate increases across the country. “Pet insurance firms have been increasing premiums to offset the rising cost of claims,” Srimukh Oddiraju, licensed insurance agent and CEO of Fletch, a technology provider to several leading insurance firms, told Insurify in May.
But in its state filings requesting the increase, Lemonade pointed out that its situation is more complex.
Lemonade — which also sells renters, homeowners, auto, and term life insurance — cited rising claims costs due to older pets. “As pets age, they are more likely to require veterinary care, and therefore have a higher premium,” the insurer said in its filing. “This is also evident in our higher loss trend when compared to competitors, as it anticipates more frequent and potentially more costly veterinary visits.”
What’s next: Preparing for higher insurance costs
Earlier this year, the CDI approved rate increases of 56% for MetLife and Embrace and 23% to 46% for American Modern Home. And Nationwide, one of the largest pet insurers in the country, has said it won’t renew 100,000 policies across the country.
Lemonade’s higher pet insurance rates take effect on Nov. 24, 2024, so policyholders have some time to comparison shop for cheaper pet insurance. But be sure to understand the terms, conditions, and limitations of any policy you consider buying, Oddiraju warned.
Most pet insurance doesn’t cover pre-existing conditions. So pet owners who decide to switch insurers and whose pets have pre-existing health conditions should comparison shop with caution. “Switching from one pet insurance firm to another ‘cheaper’ firm can be risky if certain existing conditions don’t get covered,” Oddiraju said.
Methodology
Insurify data scientists analyzed more than 250,000 pet insurance quotes from our proprietary database — sourced by Fletch Insurance Services LLC (“Fletch”) — to determine the premium prices displayed on this page. These quotes come directly from Insurify’s 10+ partner insurance companies across all 50 states and Washington, D.C., reflecting monthly pet insurance costs for both dogs and cats.
Unless otherwise specified, premium prices represent one-year rolling medians to account for market volatility driven by factors such as rising veterinary care costs and increased pet ownership.
Breed-level prices incorporate both mixed and purebred pets. To ensure reliability, a minimum of eight quotes is required for dogs and four quotes for cats. Breeds with significant price deviations from the average are noted explicitly; other breeds are estimated based on average costs for all purebred pets.
Pets are grouped into three age brackets:
- Young: under 12 months
- Adult: 12 months to 7 years
- Senior: over 7 years
Coverage Limits
Dog premium averages reflect policies with annual coverage limits of $2,500, $5,000, $10,000, or unlimited.
Cat premium averages reflect policies with annual coverage limits of $2,500, $5,000, $7,000, $10,000, or unlimited.
For both dogs and cats, monthly premiums are segmented by:
- Deductible options: $250, $500, $1,000
- Reimbursement options: 70%, 80%, 90%
)
)
)
)
)
)
)
)
)
)
)