The pet insurance trap: why you can't switch insurers, and why loyal customers pay more

While your pet’s vet record is clean, you choose the insurer. After the first entry, the insurer chooses for you. Any new insurer will exclude everything already in the record. So a customer with a sick dog stays with their insurer whatever the increase: +20%, +30% a year. And some insurers also charge long-time customers a tenure surcharge. In any other business loyalty earns a discount. Here you pay extra for it.

A symptom is enough; no diagnosis needed

Every insurer whose terms we have read excludes pre-existing conditions. An exclusion does not need a diagnosis. One symptom in the record is enough. Florida law expressly allows excluding a condition whose “signs or symptoms” are known from verifiable sources. No diagnosis, no tests, no treatment, and a note that the dog “is itching” still shuts off allergy coverage.

The insurer looks not at the claims you filed but at the whole vet record. It requests medical records from every clinic the dog has ever visited, for its whole life. That includes visits you never claimed for: a routine vaccination where the vet noticed a red ear, a visit to your previous vet before you moved. Never having filed a claim does not mean the record is clean.

How it works in practice:

1. Your dog scratched once, and the vet wrote down “itching”.
2. You decide to switch insurers.
3. At your first large claim, the new insurer requests records from every clinic the dog has visited and finds that entry.
4. From then on, allergies and skin conditions are excluded. The insurer may treat every later itch as the same condition.

Some insurers cover curable conditions again: after 180 days without symptoms or treatment at IAIC (Pumpkin, Spot), after 12 months at Embrace, Figo and Lemonade. Allergies and chronic, hereditary and orthopedic conditions and knee ligaments stay excluded for good. Trupanion’s FAQ gives a direct example: an allergy found in a puppy is never covered, even after years without symptoms. Details are in the guide to pre-existing conditions.

Not just Florida: every state works this way

We read the pet insurance laws of all 17 states that have one (New Jersey’s takes effect on 1 January 2027). In all seventeen a symptom is enough for an exclusion; no diagnosis is needed.

• 16 states copy the NAIC model law’s wording: “signs or symptoms directly related to the condition”, known “based on information from verifiable sources”.
• California’s wording is the broadest: it is enough that the pet “displayed signs or symptoms consistent with the stated condition” (Cal. Ins. Code §12880(f)). There is no “verifiable sources” and no “directly related”.
• Only Vermont limits how far back the insurer can look: 180 days before the policy starts (8 V.S.A. §7153(c)(6)(A)). Everywhere else the insurer can look at the pet’s whole life.
• The rules on curable conditions (180 days, 12 months) are the insurers’ own, written into their policies. No law requires a cured condition to be covered again. On the contrary, every law says it does not limit the types of exclusions an insurer may use.
• The other 33 states and DC, including New York, Texas and Illinois, have no pet insurance law. There the insurer writes the definition into its policy, and writes nearly the same thing. Trupanion, Pets Best, Pumpkin, Fetch, Figo, Embrace and Nationwide use the same symptom-based formula. Fetch adds that the owner can also be a verifiable source when describing how the signs began.

The only way out is down

The law protects you only with your own insurer. In Florida, a condition your policy already covered cannot become pre-existing when you renew with the same insurer or an affiliated company. With a different insurer that protection does not apply.

That leaves two options, both bad:

• stay and pay whatever you are charged;
• leave and lose coverage for everything in the record. The older the dog, the more is in it.

For people in the US this rule is gone. Since 2014 the Affordable Care Act has barred health insurers from refusing to cover pre-existing conditions. There is no such rule for pets. The NAIC model law that states base their pet insurance laws on allows the exclusions. We checked all 17 laws: none gives a right to carry coverage over to another insurer. Renewal protection works only with the same insurer or an affiliated company, and in New Hampshire only if there was no break in coverage.

Bills that would ban these exclusions exist, but none has passed. In New York, A724 and A3052 would ban pre-existing exclusions; both sit in committee. In Oregon, HB 2744 (2025) would have banned exclusions and limited the look-back to six months, but it died.

You can’t even change your plan without losing something

The trap holds you not only with an insurer but on your plan. You can lower your coverage at any time. Raising it again counts as new coverage, and anything diagnosed in the meantime is left out of it.

• Embrace. Its policy form (PET00 (02/24), from California filing 26-812, section 8 “Increasing Coverage”) says so directly. If you lower your deductible, raise the annual maximum or reimbursement percentage, or add exam or medication coverage, “the Illness Waiting Period and the determination of Pre-existing Conditions reset as of the date of the Coverage change”. “There is no reset for a decrease in Coverage.”
• Pumpkin. Its Florida sample policy (March 2026, “Policy Changes”): any change is subject to underwriting and the insurer’s approval. “Certain changes may result in a new enrollment”, which ends the existing policy and is not continuous coverage; new waiting periods start, and “conditions that occur prior to this new enrollment will be considered pre-existing”. The policy does not say which changes. Spot and ASPCA in Florida use the same wording.
• Pets Best. Its Florida sample policy (IAIC-PB10001-ILL): you can raise the reimbursement percentage or lower the deductible only on your renewal date. Raising the annual limit or adding a benefit requires cancelling the policy and issuing a new one, and then “if your Pet is showing signs or symptoms of a Condition at the time you request the change or during the Waiting Period, those Conditions will be considered Pre-existing to the new policy and any related claims will be denied.”
• Figo. Coverage can be changed only at renewal. On an increase the waiting period starts again, and a new policy form is issued with its own pre-existing check.
• MetLife. Increases only at renewal; decreases at any time.
• Healthy Paws. You can lower your deductible or your share of the bill only if you have never filed a claim.

The law does not help here. Renewal protection applies to coverage “substantially similar” to the old policy, and the ban on waiting periods covers only “existing coverage”. No law speaks directly to raising coverage. Vermont is the only state whose law lets you change coverage amounts without cancelling and reissuing the policy (8 V.S.A. §7155(g)), and even it does not say whether the added part can carry a new waiting period.

In practice, after a rate increase you cannot raise your deductible for a while to ride it out and then go back to your old plan. The insurer may treat the way back as a fresh start for everything that appeared in the record in between.

No collusion needed: the rule is the same everywhere

Insurers do not need to agree on anything. The law allows pre-existing exclusions, and every insurer gains from them. The result is the same as collusion: nobody competes for a sick pet.

Insurers compete only for new customers with puppies and clean records. Trupanion told the California regulator plainly that lower-risk pets are “a priority for the business to enroll due to lower likelihood of preexisting conditions which in turn increases the member retention” (filing 25-2461, response 8). Trupanion keeps 98.3% of its customers each month.

One raised rates 31%, another 12%, and you can’t move

Approved increases in 2026:

Pumpkin and Spot are insured by the same company, Independence American (IAIC), with the same formula. Pumpkin customers got +31%, Spot customers +12.5% (filing 26-024273). A Pumpkin customer whose dog has a diagnosis cannot simply move to Spot: a new policy is a new policy, and everything in the record becomes pre-existing. Whether a move inside IAIC counts as a renewal is something the insurer has to confirm in writing. We do not have an answer yet.

Nor is this the last increase. By IAIC’s own calculation, Pumpkin’s rate needed +50% and Pets Best’s +60.5%. The insurer will take the rest in later filings (see why prices rise).

The tenure surcharge: paying for not being able to leave

From 1 October 2026, IAIC in Florida multiplies the price of Pumpkin, Spot and ASPCA by a tenure factor: the longer the policy has been in force, the more it costs. This comes on top of age and rate increases (filing 26-024273, rate manual FL_20260724, Table 2.8):

About +3% for every year. After 14 years a dog pays 53% more than an identical dog of the same age that was just enrolled.

One dog as an example: a French Bulldog in Florida at age 7. Enrolled in Pumpkin as a puppy, it pays $338.86 a month. Enrolled now, it pays $274.32. The difference, 24%, is the price of having been a customer for seven years (case: enrolling at seven).

This is half of what the insurer wanted. IAIC’s statistical model indicated about +6% per year of tenure: 1.062 after one year, 1.348 after five, 2.309 after fourteen. IAIC told the regulator it “selected half the indication as a transitionary step to introduce this new variable” (26-024273, response of 6 July 2026). The company itself calls +3% a transitional step.

Long-time customers cost more because they cannot leave. IAIC told the regulator that tenure is statistically significant: long-time customers cost more (same filing). It could hardly be otherwise. While the record is clean, a customer is free: find a lower price and leave. After the first diagnosis, leaving is no longer possible. Year by year, more of the long-time customers have sick dogs: the healthy ones left for cheaper policies, the sick ones stayed. The insurer created this mix of customers with the pre-existing condition rule, and now it charges a surcharge for it. It calls this risk. The customer pays because the trap has closed.

Without pre-existing exclusions the market would work differently. This is our conclusion, not a number from a filing. If coverage for known conditions moved with you to a new insurer, as it does for people since the ACA, an owner with a sick dog could leave a 31% increase for an insurer that raised rates 12%. Insurers would have to compete for long-time customers on price and cut their costs instead of passing them on in the rate. A tenure surcharge would make no sense, because long-time customers would no longer be captive.

The discount goes to those who don’t use the insurance. IAIC also has a “healthy pet” discount: 10% at renewal if it paid no claims in the previous 12 months. For the first three years it partly offsets the tenure surcharge, but only for customers who did not claim.

IAIC is not the only one:

• Embrace (California). One factor depends on both age at enrollment and tenure: long-time customers pay more than new ones of the same age (filings 24-1315 and the pending 26-812). The pending filing adds a claims history factor on top.
• Fetch. The surcharge is hidden in the discount for age at enrollment: if a pet was enrolled at one year or older, the discount shrinks at every renewal and is gone by the sixth year. That is another 3–5% a year for five years.

Pets Best and Lemonade in Florida, Trupanion in California and IAIC in California have no tenure surcharge. Their prices rise with age and with general rate revisions, but not for staying.

What to do

• If the record already shows an illness, consider an accident-only policy. It does not cover illness, so illness entries in the record do not matter to it: only injuries from before the policy are excluded. It covers swallowed objects, wounds, fractures and poisoning, and costs $15–25 a month. What different plans include is in what is in a policy.
• Ask about tenure before you buy. “Does your formula have a tenure factor, or a discount that shrinks with each renewal?” Check the answer in the rate filing: how to read one.
• Compare the cost over the dog’s whole life, not the first year. A policy with a tenure factor is cheaper at the start and the most expensive by age 10–14. The 15-year totals are on the state page and in how to choose.
• Switch insurers only while the record is clean, and without a gap: start the new policy and let its waiting period pass, then cancel the old one.
• Within one company, ask about renewal. If you move from Pumpkin to Spot, for example, ask in writing for confirmation that it is a renewal that keeps coverage for known conditions and your tenure.
• Before any change to your plan, ask in writing whether it counts as a new enrollment and whether waiting periods and the pre-existing check start again. Lowering coverage is easy; getting it back is not always possible.
• Complain to the regulator. In Florida that is the Department of Financial Services; in California, the Department of Insurance. The state regulator approves increases, and it sees customer complaints.

Sources

• Florida Statutes §627.71545, the Pet Insurance Act: the definition of a pre-existing condition and renewal protection.
• NAIC Pet Insurance Model Act.
• Florida OIR, IRFS: IAIC 26-024273 (Exhibit 13a “Tenure Factors: Dogs”, rate manual FL_20260724 Table 2.8, responses to the regulator of 6 July 2026), IAIC 26-026451, Lemonade 26-034247.
• California Department of Insurance: APIC (Trupanion) 25-2461, response 8 and Exhibit F “Mortality and Retention by Risk”; American Modern Home (Embrace) 24-1315 and 26-812 (policy form PET00 (02/24), section 8 “Increasing Coverage”).
• Pumpkin: Florida sample policy, March 2026, “Policy Changes”.
• State pet insurance laws: Cal. Ins. Code §§12880–12880.8; 18 Del. C. ch. 88; HRS §§431:33-101–109; La. R.S. 22:1371–1375; 24-A M.R.S. §§3151–3161; Md. Code, Ins. §§19-1101–1107; Miss. Code §§83-87-1–9; MCA §§33-24-401–409; Neb. Rev. Stat. §§44-6501–6510; RSA 402-P; N.J.S.A. 17:46D-3–11; ORC ch. 3970; 40 Pa.C.S. §§4701–4711; R.I. Gen. Laws §§27-83-1–7; 8 V.S.A. §§7151–7159; RCW 48.205. Bills: New York A724, A3052; Oregon HB 2744 (2025).
• Sample policies: Pets Best (Florida, IAIC-PB10001-ILL), Spot and ASPCA (Florida, PET-P-20000-FL-1024), Figo (IAIC FPI POL AI IN 1025), Fetch (Florida, GPTM 050 FL 1125 A), MetLife (2021 sample), Healthy Paws (Florida, PI-39283), Nationwide (VS-G-15), Trupanion (TRU (D) 00001.1).
• Trupanion: FAQ on pre-existing conditions; shareholder letter.