Why has my pet insurance gone up?

It can be a shock to open your pet insurance renewal notice and discover the price has increased, especially when you haven’t made any claims. We understand that this can feel confusing and unfair, leaving you wondering why your loyalty doesn’t translate to a lower, or at least stable, premium.

At Petcover Australia, we understand this frustration. It’s natural to wonder if the price hike is due to profit margins or a penalty for staying loyal. But the reality behind insurance pricing is far more complex. Premium increases are rarely about profits – they reflect changes in veterinary care costs and economic conditions. This guide will explain why premiums change, why the cost of pet care is rising across Australia, and what steps you can take to manage your insurance costs.

Jump to:

• Do claims affect my renewal price?
• The age factor
• Pooling risk
• Why does pet insurance increase every year?
• Why has pet insurance increased so much?
• Is pet insurance still worth it?
• Tips to manage your premiums
• Peace of mind with pet insurance

Do claims affect my renewal price?

Potentially, yes.

If you made a claim during your earlier policy year, your insurer may reassess the risk of future claims. This is especially true if:

• The claim was high value
• Your pet now has an ongoing or chronic condition
• The condition is likely to need future treatment

With lifetime policies, conditions claimed for remain covered year after year, which offers valuable peace of mind, but can also contribute to a higher renewal price.

“I didn’t make a claim – why did my price go up?”

This is one of the most common questions we hear. It seems logical that if you haven’t used the insurance, your premium shouldn’t increase. But insurance doesn’t work like a savings account or a car policy with a no-claims bonus. When your policy renews, the price is recalculated based on a mix of personal factors and industry trends. Even if you haven’t made a claim, your pet’s risk profile changes simply because they’ve aged.

The age factor

Speaking of aging… the older your pet gets, the more likely they are to need medical treatment.

Think of it like human health – we need more medical care as we age. Pets enter their “senior” years much sooner than humans. For instance, dogs are often considered senior by age seven or eight, depending on the breed. Older pets are at greater risk of developing chronic conditions like arthritis, diabetes, or heart disease, which insurers must account for when setting premiums. As an example, the proportion of dogs with reported skin conditions rises significantly as they age.

Rest assured, the increase doesn’t mean cover is being reduced. It simply reflects the higher likelihood of needing veterinary care as your pet gets older.

Pooling risk

Insurance works by sharing risk among everyone who has a policy. All the premiums paid by policyholders go into a central fund, which is used to pay out claims when needed. If the overall cost of claims goes up – because of things like a rise in vet fees or a viral outbreak – insurance companies might have to raise premiums to make sure there’s enough money in the fund to cover future claims.

Why does pet insurance increase every year?

Aside from your pet’s age, other factors can also cause your insurance policy’s price to go up each year. And while it might seem like insurance companies are just trying to make more money, the main reason is actually that vet care is becoming more expensive overall.

Advances in veterinary medicine

Modern veterinary medicine has made remarkable progress, offering treatments that were unimaginable just a decade ago.

• Advanced diagnostics: With tools like MRI and CT scans now standard in veterinary care, vets can diagnose complex conditions more accurately and quickly, replacing the reliance on basic X-rays and educated guesswork.
• Specialist surgeries: Life-changing procedures such as hip replacements, spinal surgeries, and cataract treatments are now more accessible, improving mobility and quality of life for pets across the board.
• Cancer treatment: Breakthroughs in treatments like chemotherapy and radiation therapy are extending and saving the lives of pets, offering hope to owners dealing with a once-terminal diagnosis.

While these advancements are great news for pet health, they come with higher costs. Sophisticated equipment and specialist training are expensive, and this affects the cost of care – and in turn, insurance.

Inflation

Rising costs affect every industry, and veterinary practices are no exception. Many face higher expenses for energy, rent, supplies, and wages for skilled staff. When vets increase their fees to offset these costs, insurance premiums must rise to keep up.

Why has pet insurance increased so much?

You may have noticed that over the past few years, price increases have felt larger than usual. That’s because several factors have combined to create a sharp rise.

Increased demand for pet care

Pet ownership across Australia surged in the wake of the pandemic. While 61% of households owned a pet in the years prior, that figure climbed to 69% by 2021. This upward trend has persisted, with pets now found in 73% of Australian homes.^{1 2}

More pets mean higher demand for veterinary services, but with a shortage of qualified vets, costs have risen due to supply-and-demand pressures.

Economic Instability

The cost of veterinary care is also influenced by broader economic factors. Unstable exchange rates can make imported medicines and specialised equipment more expensive for vets to buy.

Additionally, rising energy costs directly affect a clinic’s operational expenses, from heating and lighting to running advanced diagnostic tools. These increased overheads are often passed on to consumers in the form of higher vet bills. As the cost of treatments rises, pet insurance providers may adjust their premiums to cover the greater expense of claims.

Is pet insurance still worth it?

Faced with higher premiums, it might be tempting to cancel your policy and take your chances. However, this can be a risky move.

If you cancel your policy, you lose cover for any pre-existing conditions your pet has developed – even if you haven’t claimed for them. Most insurers won’t cover these conditions if you try to switch policies later.

For example, if your dog develops arthritis, you’ll handle the full cost of treatment, which could total thousands of dollars.

Pet insurance is still the best safety net against costly, unexpected vet bills. A single surgery for a complex fracture can easily exceed $5,000, making insurance a worthwhile investment for most pet owners.³

Tips to manage your premiums

While rising costs are unavoidable, there are ways to keep your premium more manageable.

1. Adjust your excess

Choosing a higher excess – the amount you pay toward a claim – can lower your monthly premium. For example, increasing your excess from $100 to $200 or $300 can make a noticeable difference.

2. Review your cover

Make sure your policy aligns with your needs. If you have a healthy, indoor cat, you might not need a high annual vet fee limit. Adjusting your cover can help reduce costs while still protecting your pet.

3. Insure early and stay covered

Insuring your pet at a young age locks in cover for life, including any conditions that may develop. Switching policies later can be more expensive because pre-existing conditions won’t be covered.

4. Preventative care

Keeping your pet healthy can reduce the likelihood of claims. Regular vaccinations, keeping a healthy weight, and dental care can prevent chronic issues that lead to higher vet bills. Plus, keeping up with these routine health measures is typically a condition of most pet insurance policies.

Peace of mind with pet insurance

We know price increases can be frustrating. But as the cost of quality vet care goes up, so do premiums. Our main goal at Petcover is to make sure your pet can get the best treatment possible, without you having to worry about the cost.

Understanding what’s behind your renewal premium – like new medical tech or just general inflation – can help show the real value of your insurance. It’s about protecting you and your furry family members when it matters most. With a few tweaks, you can keep your policy affordable and maintain that all-important peace of mind for whatever lies ahead.

* This article provides general information only and does not consider your personal objectives, financial situation or needs. It is not financial product advice. Always read the insurer’s PDS and TMD to ensure the cover is right for you.

¹ Australian Veterinary Association
² Animal Medicines Australia
³ Melbourne Veterinary Orthopaedics