InsureMe Takes a Look at Pit Bulls and Homeowner’s Insurance

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Postby cheekymunkee » April 23rd, 2008, 2:36 pm

InsureMe Takes a Look at Pit Bulls and Homeowner’s Insurance
Insurance Referral Service Researches Industry’s Breed-Specific Underwriting

DENVER--(BUSINESS WIRE)--According to InsureMe, 3.5 percent of homeowners nationwide possess either a Chow, Doberman, German Shepherd, Rottweiler or pit bull terrier.

“My guess is that this is a little on the low side, given people’s financial incentive not to report a dangerous breed,” said InsureMe statistician Peter Deusterman, alluding to the fact that insurers typically charge more to owners of those breeds because of their reputation as dangerous dogs. “But I think it gives a general picture. I’d be surprised if it was much larger than that figure.”

InsureMe.com is a web-based service that helps people shopping for insurance, including homeowner's insurance. In the process it collects aggregated consumer information, including whether applicants own the dog breeds listed above.

According to the Insurance Information Institute (III), a lobbying organization for the insurance industry, there are approximately 4.7 million dog bites per year, and in 2005 those bites ended up costing insurers roughly $317.2 million.

“Three-hundred million dollars sounds like a lot, doesn’t it? Actually, it’s not,” said Deusterman. “Compared to all the things insurers pay for, dog-bite liability claims amount to a small fraction.”

According to the III, all bodily injury and property damage liability claims (not just dog-bite-related ones) accounted for just 4.36 percent of all of claims-related losses in 2006. Insurers pay far more for fire, lightning, wind and hail damage. Those four things account for nearly two-thirds of industry losses.

There is no database that lists the breed responsible for each dog bite, but there are records of which breeds have caused the greatest number of fatalities. That explains why, perhaps, certain breeds get singled out. But they may not actually bite people more often.
What’s more, breed-specific underwriting and legislation may have had the unintended effect of clouding the dog-bite issue.

“The focus on death cases may leave the public with the false impression that pit bulls and Rottweilers are responsible for the dog bite epidemic,” says Kenneth Phillips, attorney and author of the influential web site Dogbitelaw.com. “It is a much broader problem than that, involving all dogs and all dog owners. While pit bulls and Rottweilers inflict a
disproportionate number of serious and even fatal injuries, the dog bite epidemic involves many different breeds, and results from many different causes. A clear distinction needs to be made between canine homicides… and the dog bite epidemic.”

While they might dispute the notion of a “dog-bite epidemic,” the Humane Society of the United States (HSUS) agrees that there are two separate issues when it comes to dog aggression: “Out of the millions of bites, about 10-20 are fatal each year. While certainly tragic, it represents a very small number statistically and should not be considered as a basis for sweeping legislative action.”

The other reason breed profiling may not work is the fact a dog’s breed is a pretty fluid thing. “[There] are inherent problems in trying to determine a dog's breed, making enforcement of breed-specific legislation difficult at best,” says the HSUS, adding that bans have occasionally made dangerous dogs more appealing to people who desire such a trait.

Still, many contend that fatal attacks should carry a lot of weight despite their infrequency. In other words, the risk is still too great — something must be done.

Merritt Clifton is the founding editor of Animal People, an independent newspaper covering animal protection issues. He believes the numbers support breed-specific underwriting.

“What is relevant is actuarial risk. If almost any other dog has a bad moment, someone may get bitten, but will not be maimed for life or killed, and the actuarial risk is accordingly reasonable. If a pit bull terrier or a Rottweiler has a bad moment, often someone is maimed or killed — and that has now created off-the-chart actuarial risk, for which the dogs as well as their victims are paying the price.”

Ultimately it is risk aversion that motivates insurers, not a hostility toward certain types of dogs, says Deusterman.

“Insurers don’t discriminate — they calculate. They look for easy, empirically sound ways to reduce their underwriting risk. Charging pit bull and Rottweiler owners more is one of them.”

About InsureMe
Based in Englewood, Colorado, InsureMe helps people nationwide find affordable insurance by connecting them with their local insurance professionals. For more about InsureMe, or to shop for free insurance quotes, visit InsureMe.com. Agents should check out the InsureMe agent site. InsureMe is a Bankrate, Inc. company.

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