Dogs can make insurers growl
As much as you love your dog, your homeowners insurance company may not, depending on the breed. Your choice of a four-legged "best friend" might make it more difficult for you to find affordable coverage, if you can get coverage at all.
During a prescreening interview for a home insurance policy, Michael Richbourg of Atlanta was asked if he owned any dogs. He answered that he had two mixed breeds. He wasn't sure about one of them, but he said the other appeared to be mostly schipperke (pronounced like "SKIPPER-key"), which are small and foxlike.
Hearing the breed, the agent quietly replied that he could not process Richbourg's application further. It seemed that the insurance company had blacklisted the schipperke as too risky.
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Most insurers will extend policies to homeowners with dogs, according to the Insurance Information Institute. But the New York-based trade group also says dog bites cost insurers nearly half a billion dollars a year, so the industry is trying to be proactive.
Richbourg and other dog owners complain that, in the process, they're being bitten -- by the insurance companies. Here are five ways.
Hard to know which dogs are frowned upon
The American Kennel Club describes a schipperke as "mischievous," "enthusiastic" and "extremely active." The page about the breed on the AKC's website says the dogs can be barkers, but it doesn't mention aggression or biting. So why did Richbourg's dog apparently raise red flags?
"Insurance companies go by the average number of bites reported for a certain breed," explains Ashley Hunter, owner and president of HM Risk Group, an insurance and risk management brokerage in Austin, Texas.
The Humane Society of the United States reports that the bite list changes from year to year and from one area of the country to another. Just a few years ago, the Doberman was the breed to fear. Today, it may be pit bulls and rottweilers. The Presa Canario -- a breed few people had heard of in 2001 -- is now said to be sought by people wanting a "killer dog."
According to Einhorn Insurance, a San Diego agency specializing in dog liability insurance, the dogs considered dangerous or blacklisted by most insurance companies include pit bulls, Staffordshire terriers, Doberman pinschers, rottweilers, Great Danes and seven other types. But the schipperke is not on Einhorn's list.
Coverage denied too easily?
"The real problem is that there is so much conflicting information (about aggressive breeds) that you don't know what to believe," says Donna Popow, an attorney and insurance claims consultant in the Philadelphia area. "Any dog will bite, given the right set of circumstances."
But that doesn't necessarily mean homeowners with dogs should be denied insurance. "This is a knee-jerk reaction caused by public hysteria," says Ledy Van Kavage, senior legislative attorney for Best Friends Animal Society, a pet sanctuary and adoption network in Kanab, Utah.
However, the insurance industry says dog bites are a problem. They accounted for more than one-third of all homeowners insurance liability claims paid out in 2012, totaling about $490 million, according to the Insurance Information Institute and State Farm. The average claim cost close to $30,000.
The Centers for Disease Control and Prevention says dogs bite nearly 4.5 million Americans every year, resulting in an estimated 885,000 injuries that require medical attention. Half of those who are bitten are children. And, letter carriers are a frequent target; the U.S. Postal Service says nearly 5,900 were attacked in 2012.
Dog documentation may not matter much
Popow recommends that you consider the holistic risks of bringing a dog into your home. It's much like being the parent of a teenager who is now able to drive.
You need to explore ways to manage the risk of your teen's exposure to driving. You will give instructions, ride along with them for a while and make sure the teen gets in lots of driving practice.
"That same process applies to bringing a new dog into the home," says Popow. "You need to prepare ahead of time."
Research the best type of dog for your family and home environment by talking to breeders, veterinarians and dog trainers, she says. If you're interested in rescuing a dog, get that same kind of information from a breed rescue organization or your local humane society.
Understand that some dogs aren't good with small children, some aren't good with cats and some don't do well with other dogs.
Document your research for insurance purposes.
However, your insurance company may or may not use your documentation when underwriting you. Even if it doesn't, you'll know you've done everything you could to choose the best dog for your family and your insurance company.
Keeping quiet about a dog can be costly
If you own one of the dogs that might be deemed aggressive by your homeowners insurance company, should you let the insurer know? Yes, says Hunter of HM Risk Group.
"If you don't reveal that you have one of the 'questionable' dogs and you file a claim, they may not pay anything," Hunter says.
Before telling your insurance company that you have a dog the insurer may consider to be risky, Van Kavage of the Best Friends Animal Society suggests you have some coverage lined up with another company. Insurance carriers differ on the breeds they deem aggressive, and some go by the breeds in your state which have bitten the most.
Van Kavage also cautions that when you own a mixed breed, don't offer your insurance company a guess on what the predominant breed in the mix is. "It's impossible to guess correctly what the breed is unless you have a DNA test done," she says.
Small carriers: The wrong tree to bark up
"Millions of positive interactions happen between people and dogs every day without bite injuries," says Karl Newman, president of the NW Insurance Council, a trade group based in Seattle. "Fortunately most dog bites can be prevented through education and responsible dog ownership."
You usually can find a homeowners insurance company that doesn't discriminate by dog breed and will insure you, says Hunter.
Carriers that are skittish about certain types of dogs often will provide policies when owners put their animals through behavior training or agree to keep their dogs restrained, such as with a muzzle, according to the Insurance Information Institute.
The insurers that do refuse to extend coverage to homeowners with certain breeds tend to be smaller companies that are nervous about the liability and the bad press that comes from a dog-bite case, Hunter says.
"Think outside the box when it comes to insurance carriers and look for an independent agent that is more dog-friendly and doesn't tend to discriminate," she concludes.
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