Nationwide cites inflation as reason for sudden pet insurance cancellations

Nationwide will cancel insurance coverage for approximately 100,000 pets across the country.

The nation's largest pet insurance provider cited rising veterinary care costs and other factors that were eating into its profits as the reason for its decision. The company said it was part of its efforts to “remain viable and profitable over the long term.”

“Inflation in the cost of veterinary care and other factors have recently led to policy changes and withdrawals of some products in some states – difficult actions necessary to ensure a financially viable future for our pet insurance business,” the company said.

The cancellations would not be based on the pet's age, breed or previous claims, the company said in a statement. However, many of the canceled policies involve older pets with pre-existing conditions that may not be insurable elsewhere. USA Today reported.

“Nobody else will take in old dogs with pre-existing conditions, and even if they did, they would rule out all pre-existing conditions. … I don't know what to do,” said 65-year-old freelance writer Christie Kieth USA Today.

Keith, who lives in Davisburg, Michigan, has two senior dogs who both recently needed medical attention. Ros, a 10-year-old Silken Windhound, has been hospitalized twice and continues to suffer from an undiagnosed illness, while Harper, an 8-year-old Scottish Deerhound, was treated for a back injury.

The 65-year-old has been paying at least $600 a month for her dogs' insurance since November 2017. But now she fears that she will no longer be able to afford the dogs' veterinary bills when she gets older.

“I was willing to pay that high amount for this insurance coverage because I love my dogs. They are my family. They are not like a car or a house or something that can be replaced or remodeled. They are important to me,” Keith said.

According to NerdWallet, about 24 percent of Americans who own a cat or dog have pet insurance, and the popularity of such policies is growing.

Pet insurance policies can cover everything from heartworm treatment and dental cleaning to behavioral issues and grooming. They can also cover treatment for accidents and illnesses, as well as medically necessary euthanasia.

More than half of pet owners surveyed for the NerdWallet report said they purchase pet insurance for “peace of mind.”

“When pet insurance is available, it can provide pet owners with much-needed peace of mind when it comes to protecting their finances from unexpected pet-related medical expenses,” said Kimberly Palmer, financial expert at NerdWallet.

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But insurance costs are rising. Nationwide's announcement comes as many Americans are struggling to obtain various types of insurance, including for home and auto. According to the latest government data, auto insurance premiums rose 20.3 percent in the 12 months through May.

“We obviously understand the disappointment felt by many of our pet families and will fully support the coverage they have paid for through the end of the current term,” Nationwide said in the statement. “Our rates will continue to be fair and appropriate for the plan, pet and breed.”

The cancellation of thousands of insurance policies is now taking effect. The affected policyholders will be informed in writing by the company. The cancellations will last until summer 2025.