Breed Discrimination in Insurance Coverage
Moving Toward Breed-Neutral Homeowners Insurance Policies
Homebuyers are required to obtain property and liability insurance coverage as a prerequisite to obtaining a mortgage. Many insurance companies legally refuse to provide coverage for dog owners of certain breeds. Breed identification, even by experts, remains a subjective guessing game with no scientific formula. Making decisions based on the perceived breed of a dog, without proper actuarial data, is an unsound practice strewn with errors. Insurance underwriters have unchecked discretionary power, which puts customers in the position of having to choose between the American dream and their family pet.
This blog discusses some problems and solutions surrounding dog breed discrimination by insurers. This practice not only impacts dog owners and dog bite victims, but also increases the population of unwanted dogs at rescue shelters. Claim handlers should adopt better practices in their investigations of dog bite incidents by activating tools they already possess to reduce unnecessary claim payments.
Minimizing High-Risk Coverage
Insurance companies are in business to make a profit for their shareholders, which means minimizing coverage of risks with a likelihood of a large loss. It is common practice for insurers to refuse coverage of certain dog types, believing that doing so positively impacts their bottom line. Insurers defend their practices by claiming that “the single biggest risk and cause of loss to insurance companies is dog bites.” Frank O’Brien, vice president, state government relations, Property Casualty Insurers Assn., testimony at Massachusetts Statehouse hearing, Oct. 17, 2017. Statements like that indicate that the restrictive practices carriers currently employ are not effective enough and the industry model is ripe for change. According to the American Veterinary Medical Association, “a dog’s tendency to bite depends on at least five interacting factors: heredity, early experience, later socialization and training, physical and behavioral health and victim behavior.” Larry Cunningham, The Case Against Dog Breed Discrimination by Homeowners’ Insurance Companies, Conn. Ins. L.J., 2004. When dogs bite, the plaintiffs bar believes that strict liability laws impose unquestionable financial obligations on dog owners and their insurers. The reality in most states is that awards can be reduced if the victim teased, tormented, or trespassed, supporting the argument that dogs bite for reasons other than their genetic predisposition.
Eliminating Breed-based Coverage
No reliable science exists regarding the identification of dog breeds and their bite ratios. According to Janis Bradley, author of the 2005 book Dogs Bite But Balloons and Slippers are More Dangerous, “The reality is that we have at present no reliable data that would allow us to predict with any measure of certainty (or even anything much beyond chance), that any particular dog who has not already done so is more likely to deliver a damaging bite than any other dog, either in terms of genetics or of past behavior or of the life circumstances of the animal.” Id. at 27. It would make more sense to use the dog’s gender to determine its insurability because nearly 90 percent of dog bites are from intact males.
While many states have outlawed legislation that makes owning certain breeds illegal (also known as breed-specific legislation), similar protections are not in place prohibiting insurers from doing so because they are not governmental agents. However, insurance companies operate under the supervision of state governments, which have immense regulatory power when making determinations regarding insurers’ practices relative to the public interest. The problem currently is that low-risk insureds who have dogs with no-bite history are being classified incorrectly as high-risk customers and consequently are denied coverage. A more accurate risk assessment would be for insurers to make coverage and premium decisions by considering the specific canines at the residence and determining whether they have a history of unjustified bite activity.
Connecting Insurability with Licensing Requirements
Were states to eliminate this breed-specific practice of insurers while also mandating that owners insure their dogs, insurers could seize greater control of loss prevention. They could insist on proof of training and licensing and sterilization. Because owners are required to provide documentation that their dog’s vaccinations are current before they can obtain a government-issued dog license, the spread of rabies would be controlled even further as more owners are encouraged to get a license. A similar model that is in place for registering (and inspecting) cars certainly contributes to having safer automobiles and drivers on the road. Pets with bite histories could be subjected to higher premiums or exclusions. Owners could be compelled to look for coverage via stand-alone dog bite liability insurers.
Improving Claim Investigations
Claims adjusters and their counsel need to improve their investigations to include the moments and days prior to an alleged bite incident. Adjusting these cases with more rigor leads to some justifiably lesser payouts once the actions of the victims are discovered. Boston Dog Lawyers successfully defended a dog owner when her dog Midnight bit an 8-year old boy. Our investigation revealed that the boy often would throw rocks at Midnight through her fence. On the day they came face-to-face during her walk, Midnight retaliated. The boy had provoked the dog, which in most states triggers the application of comparative or contributory negligence statutes that can protect insurers against unwarranted claim payouts and reduce loss severity. A significant dog bite results in an initial public hearing at the municipal level, which provides a great opportunity for insurers to engage in discovery. Attendance at the hearing by the adjuster or counsel will lead to more accurate decisions about the insurer’s rights and liabilities. This investigation tactic is an improvement and demonstrates the type of due diligence that insureds and shareholders should demand.
If insurers eliminated their breed-based coverage restrictions, not only dog owners would benefit; legitimate dog-bite victims would gain protection as well. Often, rightful claimants are shut out of deserved compensation because the dog owner lacks liability insurance coverage and their other assets are well protected from attachment.
Reducing the Unwanted Pet Population
Another public policy deserving consideration is that by not insuring certain breeds of dogs regardless of their individual bite history, the insurance industry inadvertently has contributed to the stocking of rescue shelters with many innocent but uninsurable pets that won’t be adopted because of their so-called genetic risk. Eliminating the need for homeowners to choose between insurability and the family pet would reduce the population of dogs that are dropped off at shelters for no reason other than their alleged breed. Reducing this population will thereafter reduce the number of dogs who are euthanized because a shelter lacks the space to house them. Lastly, insurers could require that owners spay and neuter their dogs to obtain coverage, which again would reduce the unwanted pet population.
Insurers could engage state governments to better educate children under 12 to display cautionary behavior when approaching dogs since they account for more than half of all dog bites. They also could insist that states compel animal control officers to better enforce local rules against having at-large and unlicensed dogs.
A mission of our firm is to compel authorities in dog matters to make the right decision the right way. That involves promoting the consideration of facts over emotion, specifics over generalities, and diligence over indolence.