Pet Owner Files Class Action Against Healthy Paws Pet Insurance Over ‘Impermissible’ Premium Increases

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A proposed class action out of Washington claims Healthy Paws Pet Insurance LLC has taken advantage of an industry “rife with abuse” in order to rake in millions at the expense of policyholders.

According to the case, Healthy Paws has unlawfully increased the monthly premiums for pet insurance policyholders based on impermissible factors, such as pets’ ages and local claims rates. The suit alleges the defendant, which is not an insurer itself but rather administers pet insurance policies, has engaged in this conduct despite stating in the policies’ terms that increases would be tied only with rising veterinary care costs.

“While some pet insurance policies may explicitly allow monthly premiums to increase based on a pet’s age—thus warning consumers from the outset of the potential for a spike down the road—Healthy Paws’ policies do not,” the complaint reads.

The 25-page complaint begins by explaining that the plaintiff purchased a Healthy Paws pet insurance policy for his dog in 2012 for a monthly premium amount of $33.85. According to the case, the policy’s terms stated that the monthly premium “may change for all policyholders to reflect changes in the costs of veterinary medicine.” The lawsuit stresses that the policy allowed for no other factors to be considered in determining monthly premium changes, meaning Healthy Paws was “contractually bound” to increase premiums “only to the extent that such increases are tied to the increase in the costs of veterinary medicine.”

The case alleges that despite the “unambiguous policy language,” the plaintiff’s monthly premiums have “skyrocket[ed]” over 300 percent between 2013 and 2020 based on “impermissible factors.” For context, the complaint, citing the Nationwide Purdue Veterinary Price Index, 2019, states that the costs of veterinary medicine have increased only 21.1 percent between 2014 and 2018, while the plaintiff’s premiums shot up “a whopping 65.4 %” during the same time, only to inflate another 87 percent over the next two years.

According to the case, the plaintiff cannot switch insurers given his dog is now 13 years old and has aged out of most pet insurance policy offerings.

The lawsuit argues that Healthy Paws has unlawfully increased policyholders’ premiums based on factors that were unauthorized under the policies’ terms, namely pets’ ages and claims rates in their local area. According to the case, the defendant has admitted to such in interviews and in response to online complaints. Moreover, the suit notes that Healthy Paws and its underwriters were fined in January 2020 by Washington State’s Office of Insurance Commissioner for several violations, including for unlawfully increasing premiums based on pets’ ages despite contractually agreeing not to do so.

The suit seeks to certify both a nationwide and California-only subclass of consumers whose monthly premiums increased for a Healthy Paws pet insurance policy “within the applicable statute of limitations.”