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http://www.pojonews.com/apps/pbcs.dll/article?AID=/20060330/BUSINESS/603300326
Dog could cost you your insurance
Some companies won't cover owners of certain breeds
By Rebecca Imperati
For the Poughkeepsie Journal
March 30, 2006
Some homeowners may be surprised to learn they have to choose between their house and their dog.
More and more homeowners are shocked when they discover their insurance carriers aren't renewing their policies simply because of the type of dog they own.
Clintondale resident Ronn Sprague owned his house and one of his dogs for more than 10 years. So he was surprised when in late February he learned that his homeowners insurance policy wouldn't be renewed because of the type of dog he had. He had 30 days to find new coverage.
The discovery came after an insurance agent visited his home. Sprague had decided to boost his liability coverage because the value of his home had grown, prompting the visit.
"When the guy came out, I was here and the dogs happened to be out — a shepherd and a husky," Sprague said. "He didn't say anything at the time."
But months later, Sprague received a letter stating his policy was not being renewed because of the two dogs.
Some insurance companies have decided to not underwrite policies for homeowners who have certain breeds, which they say are more prone to biting.
And some dog owners say this is discriminatory toward responsible owners and they support pending state legislation that would make it illegal for insurance companies to do this type of profiling.
"What it does is stereotype," said Mahlon Goer, regional legislative coordinator for the American Dog Owners Association and Steering Committee member of Dog Federation of New York, which is based in Beacon. "... the tragedy is people loose the dog. When they have no option they have to relinquish the dogs."
The association launched a campaign this year to combat the procedure.
According to the Centers for Disease Control, there are 4.7 million dog bites a year. Of those, 800,000 require medical attention. About 12 people die each year from dog bites, a number that has held steady, said Julie Gilchrist, a medical epidemiologist for the center.
For insurance companies, the bottom line is owners are legally responsible for their dogs. Home and renters' insurance coverage does include liability coverage.
"If your dog accidentally injures somebody or damages their property, you are covered under your insurance policy," said Jeanne Salvatore, spokeswoman for the Insurance Information Institute, a nonprofit trade organization representing insurance companies.
Claims cost millions
According to the institute, in 2003 dog bites accounted for about one quarter of all homeowner's insurance liability claims, costing roughly $321.6 million.
In 2002, liability claims accounted for 6 percent of homeowners' claim costs, costing $345.5 million. The average dog bite claim in 2002, the latest data available, cost insurers $16,600.
"For these reasons, insurance companies will look at the breed of dog when deciding in terms of underwriting," Salvatore said. "There is no industry-wide policy. Each company is going to treat dogs differently."
Examples of breeds typically considered high-risk are American bulldogs, American Staffordshire terriers (also sometimes known as pit bulls), chows, Doberman pinschers and German shepherds.
Salvatore said homeowners should know if they have an aggressive dog, which insurance companies will determine based on their own dog-bite claim experience, it could affect their homeowners policy. "The way insurance works, they are going to look at what is their experience and what is the projected experience," Salvatore said. "The underwriting, how an individual insurance company prices its products is very important. That is how they compete. Some companies just believe the risk is too great for them to financially handle."
A year ago, Pine Plains resident Tonya Pulver was shocked to learn her Siberian husky was on her insurance company's banned list.
"I was extremely surprised," Pulver said.
Quincy Mutual Fire Insurance Company did not renew her policy.
"Even if you go to the AKC (American Kennel Club) Web site it says they are not to be used as a guard dog. ... I was very shocked. I thought there has to be a misunderstanding," Pulver said.
Not a new issue
Kevin Meskell, executive vice president at Quincy, said the Massachusetts company does have a list of prohibited breeds, which includes Siberian huskies. But dogs affecting insurance coverage is nothing new.
"When I first started in the insurance business in 1973, it was a topic back them and it was a topic that predated my entry into the insurance business," he said, adding the restricted list is reviewed periodically.
Meskell was not sure how many of their policies are not renewed because of dog breeds but said it often happens simply because the company is not aware the dog is in the insured's home until a dog bite claim is filed.
Because Sprague had his dogs for so many years, he was surprised to find out there was a suddenly a problem. He had never put in any claims for the dogs to his insurance company, Mid-Hudson Co-Operative.
The company does have a dog breed policy.
"We have a restricted dog list," said Beverly Martin, manager with the Orange County-based company. "If a person has a dog on that list, they will not be able to get coverage."
Both Siberian husky and German shepherd are on the list, she said.
While State Farm Insurance believes dog bites are a serious issue, they do not have any dog prohibited list, spokesman Jeff McCollum said.
"We think there are good dogs and bad dogs, good owners and bad owners," McCollum said.
And dog bites do cost State Farm money. In 2002, in upstate New York, which includes all areas outside New York City, the company received 102 dog bite claims, paying out $2 million in claims, McCollum said.
New law may help
Pending state legislation — Bill S2289 in the Senate and A04897 in the Assembly — both would prohibit companies from refusing to issue or renew an insurance policy, from canceling a policy and from charging higher premiums, based on ownership of a particular breed of dog.
Assemblywoman Deborah Glick, who introduced the bill, said they are not looking to expose insurance companies to unreasonable risk; however, she does not believe companies should be allowed to deny coverage based on breed.
"It is in the training of an animal, not in its genetics, that an animal may or may not be an appropriate pet and people should not have their ability to insure their home unreasonably denied based purely on the breed of a dog," Glick said.
Glick added insurance companies also benefit from homes with large breed dogs. These homes are less likely to be broken into.
The bills are in their respective insurance committees, according to Sen. Vincent Leibell, R-Patterson, who supports the bill.
Leibell said before being approached by Goer and the Dog Federation of New York, he was unaware of the problem and sees that as a potential hurdle.
"I think the only one stumbling block is most of the Legislature is not aware of it," he said.
Tom Sipos, vice president of Sipos Insurance in Poughkeepsie, said homeowners often underestimate the seriousness of the issue because they don't realize that while their family pet is usually well behaved, other circumstances such as the dog aging, or outside factors such as a child startling the dog, can cause the dog to react differently.
Sipos said all insurance customers may feel the repercussions if the bill passes.
"If they legislate that companies must cover this, you will see that A) rates will skyrocket for everyone or B) You will see several companies stop writing policies. If they can't price it accurately, they will stop."
The Dog Federation is also concerned as more homeowners face losing their homeowners insurance, which is often required by mortgage lenders, they may be forced to put their dogs up for adoption.
Dutchess County SPCA Executive Director Joyce Garrity said they have not seen any pet owners relinquish their dogs because of insurance so far. Garrity also added that banning breeds will not solved the dog bite problem, because people will simply start purchasing another breed.
The way to prevent dog bites is through education.
"Education and promoting responsible dog ownership is the key," she said. "You won't solve the problem by punishing the animal. In order to have a good dog at home, the owner has to put something in it."
Sprague did find a company that will cover his home and his dogs. He is paying a slightly higher rate, but has more coverage.
Had he known a dog's breed could affect his insurance coverage, he may have chosen a different breed, he said.
"It could be an influence in the future," he said. "We will talk to our insurance company to see if that dog is unacceptable. ... you may have to consider that in the future."
Pulver, who now has four Siberian huskies and found coverage through Erie Niagara, said choosing a different breed was never an option.
"I would never give up my dogs," Pulver said, adding she would live without homeowner's coverage first.
"Luckily, I'm not in that position."
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