Lemonade Set to Hike Pet Insurance Rates in California

Insurer cites aging pets and higher claims as factors in increases.

Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
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Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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Chris Schafer
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Chris Schafer
Chris SchaferSenior Editor
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Published September 26, 2024 at 6:24 AM PDT | Reading time: 1 minutes

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More than 57,000 pet owners will see their pet insurance premiums rise sharply following the California Department of Insurance’s approval of substantial rate increases for Lemonade pet insurance policies. The CDI green-lighted an overall increase of 14%.

Currently, Californians with Lemonade pet insurance pay an average of $710 annually for their coverage. With the approved rate increase, the average premium will jump to $827 per year.

The rate increase will take effect on Nov. 24, 2024, and will affect all new policies and 57,471 existing policies.

Why the increase?

Inflation and the rising cost of veterinary care are driving pet insurance rate increases across the country. “Pet insurance firms have been increasing premiums to offset the rising cost of claims,” Srimukh Oddiraju, licensed insurance agent and CEO of Fletch, a technology provider to several leading insurance firms, told Insurify in May.

But in its state filings requesting the increase, Lemonade pointed out that its situation is more complex.

Lemonade — which also sells renters, homeowners, auto, and term life insurance — cited rising claims costs due to older pets. “As pets age, they are more likely to require veterinary care, and therefore have a higher premium,” the insurer said in its filing. “This is also evident in our higher loss trend when compared to competitors, as it anticipates more frequent and potentially more costly veterinary visits.”

What’s next: Preparing for higher insurance costs

Earlier this year, the CDI approved rate increases of 56% for MetLife and Embrace and 23% to 46% for American Modern Home. And Nationwide, one of the largest pet insurers in the country, has said it won’t renew 100,000 policies across the country.

Lemonade’s higher pet insurance rates take effect on Nov. 24, 2024, so policyholders have some time to comparison shop for cheaper pet insurance. But be sure to understand the terms, conditions, and limitations of any policy you consider buying, Oddiraju warned.

Most pet insurance doesn’t cover pre-existing conditions. So pet owners who decide to switch insurers and whose pets have pre-existing health conditions should comparison shop with caution. “Switching from one pet insurance firm to another ‘cheaper’ firm can be risky if certain existing conditions don’t get covered,” Oddiraju said.

Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content

Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.

Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.

Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.

Evelyn is passionate about creating personal finance content that distills complex topics into relatable, easy-to-understand stories. She believes great content helps empower readers with the information they need to make important personal finance decisions.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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John Leach
Reviewed byJohn LeachSenior Insurance Copy Editor
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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