In the year of “pandemic pets,” homeowners’ dog-bite injury claims fell overall, but the total cost of claims spiked to a record level, according to a new analysis of 2020 data from the Insurance Information Institute (III) and State Farm. At the same time, animal rights advocates are bringing a renewed focus to the controversial practice of insurance rating for specific dog breeds in homeowners policies.

Key Takeaways

  • Increased pet ownership in 2020 hasn’t led to more dog bite claims, but the average cost of those claims rose by double-digits, according to a new insurance report.
  • Homeowners may be unaware that dog breeds deemed high-risk can affect their insurability.
  • Animal advocacy groups have called for the National Association of Insurance Commissioners to take action to determine whether insurers' dog-breed “blacklists” are justified.

Dog-Bite Liability is Multimillion-Dollar Problem

The number of dog-bite and related injury claims in 2020 fell by 4.6% from the previous year, to 16,990 from 17,800, the study found. A significant exception was March 2020, which showed a rise in claim frequency as the pandemic took hold and more people stayed home, with the number of claims up 21.6% from the previous March.

But while the number of claims was down overall in 2020, the total cost of claims paid by insurers rose 7.1% to $853.7 million, up from $796.8 million in 2019. The average cost per claim was $50,245, up 12.3% from $44,760 a year ago.

The newly released data shows a years-long pattern of climbing claim costs. The average cost per claim nationally rose a whopping 162% from 2003 to 2020, largely due to higher medical costs and heftier settlements, judgments, and plaintiffs' jury awards.

In addition to bites, those claims include damages sustained when dogs knock down children, cyclists, and the elderly, leading to costly injuries.

What Homeowners Insurance Covers  

A majority of states hold pet owners liable if their dog causes an injury. Homeowners and renter's insurance generally cover dog bites up to the policy's liability limits (typically $100,000 to $300,000), the III says. But if the claim exceeds that amount, the dog owner is responsible for the remainder. One way to increase the liability limits is to purchase an umbrella insurance policy.

Dog owners are often surprised to learn that some home insurers have lists of potentially high-risk dog breeds that guide their underwriting decisions. Doberman pinschers, pit bulls, and rottweilers tend to top these breed lists. While some companies refuse to issue policies to homeowners who own such breeds, others may require dog owners to sign liability waivers, include a canine liability exclusion clause in the policy, or charge more for coverage. Still other companies make coverage decisions on a case-by-case basis or ignore the issue altogether.

Whether certain dog breeds pose a greater risk to the public has become a subject of widespread debate in recent years. An analysis by the American Kennel Club (AKC) shows that about 20 states have either repealed their former breed-specific laws or prohibited municipalities from passing them. A number of states also have introduced bills to ban breed discrimination in insurance policies.

Those practices, as applied to insurability, could soon come under national review.

Advocacy Groups Call Out Dog Breed ‘Blacklists’

The National Association of Insurance Commissioners' (NAIC) Property and Casualty Insurance Committee was scheduled to hear more about insurance ratings for dog breeds this week as part of presentations at its spring national meeting.

The focus comes on the heels of a white paper issued in November 2020 by seven national animal welfare and advocacy organizations, including the AKC, the Humane Society of the United States, and the Animal Legal Defense Fund. The 25-page report challenges what the groups cite as discriminatory impacts of the insurance industry’s use of dog breed lists to deny homeowner and renter's insurance coverage and renewals, create policy exclusions, and limit coverage.

"Breed discrimination is an issue that impacts insurance consumers across the country," the report says. It contends that the "use of breed lists has a detrimental impact on three groups—uninformed consumers, people of color, and consumers of low or moderate means."

The groups are calling for the NAIC to study the issue, collect industry data, and report on whether breed lists should be a legitimate underwriting variable.

Important

Dog owners should pay particular attention to their dog's behavior as pandemic restrictions ease, and people (and pets) begin to go out and interact more.

What Dog Owners Can Do to Protect Themselves and Others

The III’s report was released in conjunction with National Dog Bite Prevention Week, April 11-17 this year. The annual event's sponsors recommend that prospective or current dog owners check their homeowners or renter's insurance policy to make sure it covers liability for dog bites and related injuries. If it doesn’t—or they’re unsure—they should contact their insurance agent and ask about liability protection options.

The group points to a growing concern as pandemic restrictions ease: re-socializing animals that have been isolated along with their humans for the past year. To help prevent pets from causing harm to other people, pets, or property, keep these five tips in mind:

  • Research dog breeds, breeders, and/or shelters thoroughly before adopting.
  • Consider training that enables the dog to earn the Canine Good Citizen certification from the AKC, which some insurers view favorably.
  • Re-acclimate the dog so that it’s less likely to react aggressively to everyday events and family routines.
  • Teach children basic dog safety, and don’t leave kids age 10 or younger alone with a dog.
  • Get familiar with your dog’s triggers so that you can manage them better—such as fear of strangers, loud noises, home deliveries, or unfamiliar surroundings.