In a recent announcement, Nationwide Insurance revealed that it will not be renewing roughly 100,000 pet insurance policies, affecting approximately 100,000 pet owners. The decision, according to the insurance provider, is a result of "inflationary pressures and other factors" and is in compliance with their contractual obligations and the law.

Nationwide Insurance, claiming to be the first and largest provider of pet health insurance in the country, stated that the affected policies would be discontinued by the summer of 2025. The company cited the rising costs of veterinary care and other factors as the reasons behind the underwriting changes and the withdrawal of certain insurance products in certain states. The move is seen as necessary to ensure the long-term viability and profitability of the pet insurance line of business.

While the factors used to determine the non-renewed policies were not explicitly mentioned, Nationwide Insurance assured that the action was not based on factors such as the pet's age, breed, or prior claims history. The company also mentioned that impacted policyholders would receive advanced written notification regarding the non-renewals.

This announcement comes at a time when surveys and data indicate that pet owners in America have been experiencing significant increases in costs for veterinary care, supplies, and pet insurance premiums. According to an exclusive survey conducted by Redfield & Wilton Strategies on behalf of Newsweek, 72 percent of Americans reported a rise in pet care costs over the past year, with veterinary care being the primary factor behind the price hike.

Dr. Rena Carlson, president of the American Veterinary Medical Association, explained that veterinarians have been increasing their prices due to their own rising costs. This includes the increasing expenses of pharmaceutical products used for both acute and chronic conditions, as well as general operating expenses such as rent, electricity, and telecommunications services.

On a positive note for the industry, the North American Pet Health Insurance Association (NAPHIA) reported a 22 percent year-over-year increase in revenue for the pet insurance industry in April. NAPHIA Executive Director Kristen Lynch attributed this rise to pet owners seeking financial protection against the escalating costs of veterinary care. Currently, around 5.6 million pets in the U.S. are covered by insurance policies, with the majority of policies belonging to dog owners. The average annual premium cost for dogs in 2024 was $675.61, while for cats it was $383.30.

Nationwide Insurance's decision to drop a substantial number of pet insurance policies has sparked concerns among pet owners who rely on these policies for financial security in case of unforeseen veterinary expenses. It remains to be seen how this development will impact the market and whether affected pet owners will seek alternative insurance options to safeguard their pets' health.