For years, Christy Keith has paid $600 a month in pet insurance for her dogs, but recently increased that amount to more than $700 to add coverage for her 4-year-old Silkan windhound, Pip.
But her plans to protect her pets fell apart a few weeks ago when Nationwide Insurance announced it was canceling insurance for about 100,000 pets nationwide, citing rising veterinary costs and other factors that are squeezing profits in the pet insurance business, the company said in a June 14 statement.
The move puts tens of thousands of pet owners in a bind, as many of the policies are aimed at older pets with pre-existing conditions that might not be covered elsewhere, even though Nationwide says it doesn’t take age or past claims history into account.
For Keith, a 65-year-old freelance writer who lives in Davisburg, Michigan, the dilemma is especially troubling because both of her elderly dogs have recently needed medical attention: Ross, a 10-year-old Silken Windhound, has been hospitalized twice and continues to suffer from a mysterious illness, while Harper, an 8-year-old Scottish Deerhound, is being treated for a back injury.
She began paying premiums to Nationwide for Harper in November 2017 and Ross in April 2021. Keith insured Pip, a four-year-old Silken Windhound, in December 2023. Nationwide told Keith that her dog’s insurance would expire when it came up for renewal and that she could not get cheaper insurance for her dog.
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“I was willing to pay a lot of money to get this insurance because I love my dog. He’s my family. He’s not like a car or a house or anything that can be replaced or rebuilt. He’s important to me,” Keith told USA Today. “No other insurance company will take on an older dog with pre-existing conditions, and even if they did, they would exclude all pre-existing conditions. … I don’t know what to do.”
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What is Pet Insurance?
According to NerdWallet, about 24% of Americans who own cats or dogs have pet insurance, which, depending on the policy, can cover accidents and illnesses as well as routine medical care like heartworm treatments and teeth cleanings.
Some plans will pay for behavioral issues like aggression and offer health coverage for services like grooming. They may also cover medically necessary euthanasia. “If you want to be sure this is included, check before you buy the policy. Some plans offer burial or cremation as an option,” Kimberly Palmer, a personal finance expert at NerdWallet, told USA TODAY.
Many insureds purchase pet insurance because they may not be able to fully cover costly emergency medical expenses for their pets, and more than half (57%) of pet owners surveyed for the NerdWallet report said they purchase pet insurance for “peace of mind.”
“Pet insurance, if available, can provide pet owners with much-needed peace of mind in terms of protecting their finances from unexpected medical expenses related to their pets,” Palmer said.
According to NerdWallet, the average cost of pet insurance is about $53 per month for dogs and $32 per month for cats, with costs increasing as your pet gets older.
Pet insurance, like human insurance, usually has deductibles and coverage limits. If your annual deductible is $500, you’ll have to pay the first $500 of the year before any benefits will be paid out. And some plans might only pay a portion of the amount, NerdWallet notes.
Why is Nationwide Insurance cancelling some pet insurance policies?
Nationwide claims to be the first and largest pet insurance company in the U.S., with more than 1.2 million dogs, cats, birds and exotic pets insured for medical, accident and injury coverage. But the company said in a statement on June 14 that it must take action to “preserve its long-term viability and profitability.”
“Rising veterinary care costs and other factors have led to recent changes to underwriting terms and the withdrawal of products in certain states – difficult steps necessary to ensure the future of our pet insurance business is financially sustainable,” Nationwide said, adding that it has paid “billions of dollars” in claims over the past four decades.
Insurance premiums are rising. Prices have risen so much that some homeowners are choosing not to buy insurance. Similarly, auto insurance rates have risen by 26% for 2024.
“We empathize with the disappointment felt by many pet families and fully stand by the coverage they have paid for through the end of their current contract term,” Nationwide’s statement said. “Our rates will continue to be priced fairly and appropriately for each plan, pet and breed.”
What accounts may be affected?
The company said its decision not to renew a contract was “unrelated to the pet’s age, breed or past claims history.”
Nationwide did not respond to USA Today’s request for additional information about the features of the pet insurance policies that are not being renewed.
Where pet owners live may also be a factor, according to a letter Nationwide sent to Robin Tobias of Aventura, Florida, in April, saying her insurance for her dog, Ginger, would not be renewed.
“After careful review of our products, we have decided to discontinue certain plans, including Whole Pet. These plans will no longer be offered in your state,” Tobias wrote in the letter, which was shared with the Columbus Dispatch, part of the USA Today Network. “Economic pressures from inflation, rising and escalating interest rates have caused unprecedented losses for the U.S. insurance industry, but are also impacting the pet industry, leading to this difficult decision.”
Pet owners and policyholders, many of whom have older pets with chronic illnesses, have joined a Facebook group called “Nationwide Pet Insurance Whole Wellness Revoked My Policy,” and the group, which has more than 300 members, is considering what legal action they can take against Nationwide.
“Pet owners don’t have insurance and are considering euthanizing their sick pets, but all we can say to them is we want to make more money. It’s a shame,” Tobias said.
NerdWallet’s Palmer said most pet insurance policies don’t cover pre-existing conditions.
“So if your pet has pre-existing conditions, you may want to consider other options, such as saving up in advance for medical expenses that may be needed in the future,” she says. “You could also put the money you would have paid for insurance into a high-yield savings account for your pet’s medical expenses. Finding a veterinarian who will work with you on a payment plan is another option.”
When will Nationwide phase out its pet insurance policies?
Affected policyholders have been notified in writing of Nationwide’s plans: the company began sending letters to policyholders this spring and plans to continue through the summer of 2025.
As was the case for Keith and her three dogs, the majority of policyholders commenting online about the situation say their coverage will end when their current policy ends.
Tobias’s insurance for her 7-year-old dog, Ginger, who has a heart murmur, expires on July 23. She pays about $160 a month in premiums. She bought the dog when it was a puppy.
While she found another insurance company that appears to be willing to cover Ginger, she worries that others may not be so lucky. Tobias is especially worried that older pets with health problems may be abandoned because their owners can’t afford to care for them or get coverage from another insurer.
“That’s why I have insurance,” she said. “I’m not going to need it in the future. It’s really scary.”
“To us, our dogs are our children. Everything we do is to protect them.”
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