A closed block: no new customers, and the price catches up with the limit

An insurer can stop selling an old version of a policy and keep renewing it for the people already in it. Then no young, healthy pets join. The ones who stay grow older and sicker, and their price rises faster than new customers’. In Pets Best’s rate manual for its older New Jersey policies, an 11-year-old dog costs almost as much as the insurer can pay out in a year.

How it works

Insurers now and then launch a new version of a policy and close the old one to sales. The old version is called a “closed block”. Its rates are set separately, from its own claims.

In an ordinary book, young pets that rarely get sick help pay for older pets’ claims. A closed block has no young pets. Every year every pet gets a year older, claim costs rise, and all of it falls on the same owners.

Moving to the new version with the same insurer usually means a new policy: new waiting periods and a new review of the history (see plan changes). Moving to another insurer is a new policy too, and everything already in the record becomes pre-existing (the pet insurance trap). An owner of a pet with a chronic illness stays in the closed block and pays.

Insurers do not have to tell customers that their policy is in a closed block. We learned it from a rate filing.

Examples

Pets Best (Independence American), New Jersey

The actuarial memorandum for filing IAIC-134940376 says it plainly: “This is a closed block of business with no new policies being issued.” It holds 363 policies.

• Claim costs rose 17.7% a year historically; the forecast is 16.9% a year.
• Increases: +10.7% was approved in 2025 (the calculation called for +13.8%). For 2026 the company asks for +16% on every policy alike; the filing was under review on 20 October 2026.
• An example from the new rate manual (requested rates, not approved): a Wheaten Terrier, age 11, $5,000 annual limit, $100 deductible, multi-pet discount: “Final Premium Rate $4,926.58” a year. Without the discount it is $5,185.87, more than the annual limit.
• Age pushes the price further. The dog age factor is 3.613 at 10, 4.370 at 11, 6.388 at 13 and 7.018 from 14. From 10 to 13 the price rises 77% from age alone, with rate increases on top.

The company’s advice to such customers is “a more ‘catastrophic’ plan with higher deductibles”. For conditions a pet already has, that means paying more out of pocket.

Source: SERFF Filing Access, New Jersey, filing IAIC-134940376:

• “Actuarial Memorandum”, p. 1;
• “New Jersey - Exhibit - Experience - 20260225”, pp. 1, 9, 10;
• “New Jersey - Rate Sheets - Marked - 20260225”, pp. 1, 31;
• “Filing Narrative”, p. 2.

Healthy Paws (Westchester Fire), New Jersey: a shrinking book

Healthy Paws still sells to new customers, so this is not a closed block. But the company describes a similar process. The number of insured pets in New Jersey fell 5.8% in 2025 and another 2% by February 2026. The rise in claim frequency, it says, “can reflect adverse selection of retaining pets that have higher utilization than prior ones”. By the company’s own calculation the rate should rise 52.3%. It asks for +25%.

Source: SERFF Filing Access, New Jersey, filing ACEH-134879738, “ACEH-134879738 Objection Response”, pp. 1–3.

What to do

• Ask the insurer whether your version of the policy is still sold to new customers. If not, your policy is in a closed block.
• Compare your price with the new version’s price for a pet of the same age. The difference is what the closed block costs you.
• Before switching to the new version with the same insurer, get a written answer on whether conditions your pet already has stay covered.
• If the price is approaching the annual limit, work out whether saving the money yourself or an accident-only policy would serve you better.

Sources

Filings in SERFF Filing Access, New Jersey (serff-sfa.naic.org/serff/sfa/home/NJ), read on 19 and 20 October 2026:

• IAIC-134940376 (older Pets Best policies);
• ACEH-134879738 (Healthy Paws).