Dirty Little Secrets: Pet Owners Need to Read the Fine Print on Their Homeowners Insurance Policies

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Are you planning to buy a home at some point in your life? Perhaps you already own a home and you’re curious about what your homeowners policy covers. Maybe you’re looking to switch policies or just got dumped by your carrier. In any case –– whether you’re a committed renter or a serial homeowner –– I hope I’ve piqued your curiosity with the title of this little piece.

Why? Because if you’re reading this you’re probably a pet person –– one who cares about insurance, to boot. And all you dog people, in particular, should know YOU may be at greater risk of exposure to some serious liability issues should your pet injure someone –– regardless of whose “fault” it was.

Which kind of makes sense. After all, dog bites are expensive ... and common. According to the Insurance Information Institute, dog bites account for a third of all homeowners insurance liability claims –– more than half of which occur on the dog owner's property.

Consider that dog bite claims totaled $479 million in 2011. That’s BIG money. More so when you consider that the average payout was about $29,000 per claim. In fact, the cost of dog bite claims rose a whopping 53.4 percent between 2003 and 2011. And they’re still rising. Bites are serious business!

No one’s disputing that dogs can do serious personal damage and we all know human healthcare is pricey, but most of us don’t really stop to think about how our beloved companions’ potential to do harm might impact our daily lives should the unthinkable occur. Much less do we pause to consider how best to mitigate these risks.

Which is how homeowners insurance happened. Coverage for things you never had the imagination to plan for –– like when your dog bites the mail carrier’s backside –– was devised to help you keep hold of your home in a crisis. In fact, it was so successful as a financial product that it’s currently considered a fundamental accoutrement to American dreaming.

But here’s where the issue starts to get interesting. Starting in about the 1980s, insurance carriers began to get a little squirrely about the issue of pets. Pet ownership was on the rise, “bad dogs” were in the press, human healthcare costs were skyrocketing, and the US Centers for Disease Control and Prevention (CDC) published a report on dog bites that implicated certain breeds.

Hence, a perfect storm for the nascent breed-specific legislative movement in the US. In the wake of this cultural shift and CDC report, Pit Bulls were banned in many municipalities and entities as diverse as insurance carriers and airlines seized the opportunity to limit their own exposure by excluding certain breeds of dogs.

Since then, insurance carriers offering umbrella-style homeowners policies have almost uniformly adopted breed-specific exclusion policies that target so-called “dangerous” breeds.

The list includes the usual suspects. Which means Pit BullsRottweilersChow ChowsGerman ShepherdsSiberian HuskiesAlaskan MalamutesDoberman Pinschers, Presa Canario, AkitasGreat Danes, and Wolf-hybrids are typically excluded. Which means you might end up paying someone $29,000 of your own hard-earned cash if something untoward happens and –– let’s say –– your normally well-behaved dobie bites one of your daughter’s friends while she’s over for a play date.

The fact that most “dangerous breed” owning homeowners don’t know they’re exposed is bad enough. What’s worse is that these represent only the tip of the iceberg. What most dog owners don’t know is that a great many of them are also exposed because they own mixed breeds that might resemble one or more of the dogs on the list of exclusions. That’s because most policies pointedly exclude “all crosses of the above-mentioned breeds” as well.

But that’s not all. Digging a little more, I found that some carriers excluded breeds like Boxers and English Bulldogs –– not exactly your quintessentially heavy biters. Others excluded any animal deemed “exotic,” in one case taking care to mention that it excluded, “Any exotic pet including but not limited to a lion, tiger or alligator.” Of course, pets with any history of violence are similarly excluded.

While I can get behind any company that feels the need to include known biters –– not to mention alligators –– on its list of exclusions, I must protest.

After all, “exotic animal” technically refers to every single parrot, too. And a “cross?” Do they not know that a solid half of all brown crosses could arguably be deemed a "Shepherd mix" by the average veterinarian? (Actually, they probably do.) And at what point is it a mix of X, Y or Z breed anyway? Do we head on over to the Wisdom Panel people for a $99 mutt test? Where do we draw the line? What percent of our dog’s DNA will they cover? I mean, there’s plenty of wolf in most every dog.

Confusing, right? That’s why plenty of insurance carriers haven’t lingered long over the writing on the wall. In fact, a great many in my state (Florida) cut their losses early on and pulled dogs out from under their umbrella of coverage –– years ago in some cases. Dogs are just too unpredictable, they decided. They’re just not worth the risk.

So what’s a responsible pet owner to do?

For starters, figure out what your policy does and does not cover. Ask your agent to do the vetting for you, if you can’t find it on your policy. If your dog isn’t on the list of breeds but isn’t registered as a purebred and could possibly be considered a mix of any of the excluded breeds, call your insurance company to ask what you need to do to be sure your dog will not be confused for a “dangerous dog cross.” Will your veterinarian’s say-so be enough? A mutt test? A temperament test?

If you’re unhappy with your insurance company’s regulations, you may still have options. Here’s where you get to reap the benefits of a competitive marketplace. Dig around for a policy that covers pets. Websites like this one and this one might help get you started. Happy hunting!