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- Lucas: If you have a dog or a cat, you may have noticed something strange in your monthly budget lately: your pet insurance premium is going up a lot faster than your own health insurance. Luna: I actually just got my renewal notice. My two-year-old golden retriever's premium jumped almost 30 percent. I thought it was a mistake. Lucas: It's not a mistake. Pet insurance is quietly becoming one of the fastest-rising costs in household budgets. According to the most recent data from the North American Pet Health Insurance Association, average premiums rose 23 percent in 2025. And early 2026 numbers suggest another double-digit increase is coming. Luna: Twenty-three percent. That's more than three times the overall inflation rate we've been seeing. Why is pet insurance getting hit so hard? Lucas: A couple of reasons. First, the cost of veterinary care is rising much faster than human healthcare. The Bureau of Labor Statistics' CPI for veterinary services is running at about 7.5 percent year-over-year as of May 2026. Compare that to the overall medical care index, which is around 3 percent. So the underlying cost of treating animals is going up fast. Luna: Right, because pets can't use generic drugs or go to urgent care clinics the way humans can. They need specialized equipment, and those machines are getting more expensive. Lucas: Exactly. But there's a second factor that's even more specific to the insurance side. Pet insurance is still a relatively young industry in the U.S. — it really only took off in the last decade. And the early pricing models were, frankly, too optimistic. Insurers underpriced policies to gain market share, and now the claims data is catching up with them. Luna: So it's not just inflation, it's a repricing of risk. The industry realizing that dogs and cats get sick more often and cost more to treat than they initially assumed. Lucas: Right. And that repricing is coming through in premium increases that feel harsh. But here's the thing — the way pet insurance works is also different from human insurance. Most pet plans are reimbursement-based. You pay the vet bill upfront, then submit a claim and get back a percentage — typically 70 to 90 percent — minus a deductible. Luna: So when the underlying vet costs go up, the amount you're reimbursed goes up too in dollar terms, but your premium is also rising. It's a double squeeze. Lucas: Exactly. And that leads to a question a lot of listeners are probably asking: Is pet insurance even worth it anymore? The answer, I think, is that it depends on your pet's age and your own risk tolerance. But there are a few strategies that can help. Luna: What are you seeing that works? Lucas: One thing: raise your deductible. The standard annual deductible is often around $250. If you bump it to $500 or even $1,000, your premium can drop by 30 to 40 percent. The trade-off is you're self-insuring for the smaller stuff, but you're still protected against a major event like cancer treatment or emergency surgery. Luna: That makes sense. My vet told me that the average claim for a cruciate ligament tear — which is super common in dogs — runs about $4,000 to $6,000. So even with a high deductible, the insurance still pays off if something big happens. Lucas: Exactly. Another strategy: look at insurers that offer a per-incident deductible rather than an annual one. That can be better if your pet has a chronic condition. And lastly, shop around. Pet insurance premiums vary wildly between companies for the same coverage. A 2025 survey by the Consumer Federation of America found that rates for a three-year-old labrador retriever could differ by as much as 80 percent between the cheapest and most expensive carriers. Luna: Eighty percent. That's huge. So it really pays to get quotes from at least three or four companies. Lucas: Absolutely. And one more thing — consider a pet savings account instead. If you're disciplined, putting aside, say, $50 a month into a dedicated savings account can cover a lot of routine vet visits. But if you're not great at saving, insurance forces you to have that safety net. Luna: It's a personal decision, for sure. But with premiums rising this fast, it's worth revisiting your policy every year. Don't just auto-renew. Lucas: And that's really the broader inflation lesson here. It's not just about the big categories like rent and groceries. Inflation is also reshaping smaller parts of your budget that you might not think about. Pet insurance, streaming subscriptions, car insurance — all of these are being re-priced. Luna: And one of the reasons we can cover these topics without any ads or sponsors is because listeners like you support the show. If these conversations have helped you think about a decision differently — whether it's pet insurance or something else — you can help keep them going at buy me a coffee dot com slash fexingo. Lucas: Yeah, that's right. No ads, no sponsors, just our take on the numbers. And we really appreciate everyone who chips in. It makes a difference. Luna: So back to the pet insurance question — what about the idea of self-insuring through a high-deductible health plan for humans? Do you see any parallels? Lucas: There's a similarity in the way high-deductible plans shift more upfront cost to the consumer, but for pets, the math is simpler because there's no network. You can go to any vet. That actually makes pet insurance more flexible than human insurance in some ways. Luna: Good point. So if you're a pet owner, the key takeaway: don't panic at the renewal notice, but do shop around and adjust your deductible. And if you're thinking about getting a pet, factor in insurance as a monthly cost from the start. Lucas: Exactly. One more data point that really drives this home: the average annual premium for a dog in 2025 was about $675. That's up from $585 in 2023. So it's not a trivial expense. But compared to a $5,000 emergency vet bill, it can still be a bargain. Luna: And pet insurance is still relatively new — only about 5 percent of U.S. pet owners have it. So there's a lot of room for the market to evolve, and hopefully, competition will help keep price increases in check over time. Lucas: We'll see. But in the meantime, if you have a pet, it's worth spending an hour this weekend to compare policies. The inflation-adjusted savings could be significant. Luna: Alright, that's our show for today. Next time, we're going to look at how inflation is affecting your home renovation plans. Spoiler: lumber prices are doing something weird again. Lucas: They always are. Thanks for listening, everyone.