A 25% cap does not cancel an increase. It spreads it out

From Pet Insurance Wiki · last updated 20 Oct 2026
A dangerous trap. Every example below comes from an insurer or regulator document, linked next to the quote. All traps

A 25% annual cap sounds like protection. But it limits how fast the price rises, not how far. The insurer collects the rest at later renewals until the price reaches the full level. And the insurers’ own calculations show that the “full” price will rise further.

How it works

No New Jersey law limits rate increases. But when it reviews filings, DOBI (the Department of Banking and Insurance, the state regulator) writes the same rule to insurers: “Individual policyholder premium increases resulting from company rate filings are limited to 25% on an annual basis for pet insurance in New Jersey.” DOBI’s letters do not name the basis for it.

When an insurer asks for more than 25%, or for an increase that is above 25% for some customers, it writes a rule into its rate manual: no more than 25% this year, the rest later.

  • Pumpkin, Spot, ASPCA: the full price by the fifth renewal.
  • Trupanion: 25% at renewal, the rest later.
  • Pets Best 2.0: asks for +49.1% and sets the same 25% cap.

So it is not one increase but a series: +25% this year, then more, until the price catches up with the calculated one.

There is a second catch. Independence American’s rule (Pumpkin, Spot, ASPCA) does not cap changes in “risk characteristics”. The documents do not say whether the rise with the pet’s age or the new tenure surcharge count toward the cap. If they do not, a 25% rate increase can stack with the age increase in the same year. That is our reading; it needs to be confirmed with DOBI.

You usually cannot escape the series. A new insurer will exclude everything already in the vet record (see the pet insurance trap). The regulator offers its own protection: if an increase above 10% is approved, the insurer must send a notice on how to save. But it has one piece of advice: raise the deductible or your share of the bill, that is, pay less for worse cover.

Examples

Pumpkin, Spot and ASPCA (Independence American), New Jersey

Filing IAIC-134909117 asks for +18.6% on average, from −52.8% to +25% for individual policies. Without the cap, 14,971 of 43,329 policies would get +25% or more, a few of them over 100%. The rule in the rate manual:

“Rates for the base product are subject to a maximum premium increase of 25% at policy renewal. Premiums are released to the ultimate level at the fifth policy renewal following the rate increase. Changes in risk characteristics, exposures, or policyholder-selected design elements are not capped.”

Status: under review on 20 October 2026.

Source: SERFF Filing Access, New Jersey, filing IAIC-134909117, “NJ Rates 20260317”, p. 12; “NJ Rate Exhibits”, Exhibit 17, p. 36.

Trupanion (American Pet Insurance Company), New Jersey

Trupanion asked for +41%. The final version of the calculation is +24.4% on average, and the actuary’s indication is +52.8%. The filing was approved on 5 October 2026, effective 31 October. The rate manual says: “Premiums will be capped at 25% on renewal.” The letter to customers gives increases of 15% to 26% and says “only a portion of the increase may be applied at this year’s renewal”.

Source: SERFF Filing Access, New Jersey, filing APII-134748612, “Underwriting_and_Rating_Manual_NJ_20261031”, p. 4; “Important Notice Regarding Premium”, p. 1.

Pets Best 2.0 (Independence American), New Jersey

Filing IAIC-135059727: “Overall Rate Impact - Medical: 49.1%” and “we are proposing a cap on renewal rate changes of +25%”. So almost half the increase moves to the next year. Status: under review.

Source: SERFF Filing Access, New Jersey, filing IAIC-135059727, “Actuarial_Memo_PB_NJ”, p. 1.

Healthy Paws (Westchester Fire), New Jersey

Healthy Paws hits the cap every year. In its 2023 filing the company says it is asking for “the maximum amount allowed (24.9% overall with a 25.0% max per pet)”. In 2026: “our proposed rate increase is 25%”. Its own calculation says it needs +52.3%. When an increase is above 10%, DOBI requires a notice to customers on how to save. The company answers that it will recommend that policyholders “adjust coinsurance and deductible options”.

Sources: SERFF Filing Access, New Jersey, filing ACEH-133767184, “Objection Response to ACEH-133767184”, p. 1; filing ACEH-134879738, “ACEH-134879738 Objection Response”, pp. 1–2.

What to do

  • When a letter about an increase arrives, look for the words “cap”, “portion of the increase” and “ultimate level”. They mean the increase will continue next year.
  • Ask the insurer what the price will be once the increase is fully applied, and after how many renewals.
  • If the vet record is still clean, compare prices while you can still leave. If an illness is already on record, consider an accident-only policy with another insurer rather than cutting cover with your current one (see the pet insurance trap).
  • More on New Jersey on the state page.

Sources

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

  • IAIC-134909117 (Independence American: Pumpkin, Spot, ASPCA);
  • IAIC-135059727 (Pets Best 2.0);
  • APII-134748612 (Trupanion);
  • ACEH-133767184 and ACEH-134879738 (Healthy Paws).

History

  1. First published