Why laws forcing insurers to cover pit bulls, Rottweilers, et al are literally no skin off the insurance industry’s buttocks
ALBANY, New York; PHOENIX, Arizona; RENO, Nevada––New York and Nevada state laws have since the beginning of 2022 required every homeowner and renter to subsidize the few who keep pit bulls by prohibiting insurance companies to set breed-specific premiums, or outright refuse to cover dogs of specific high-risk breeds, if they insure dogs at all.
Similar legislation, pushed by the aggressively pro-pit bull Best Friends Animal Society, is now before the Arizona legislature, and is expected to be introduced soon in state legislatures across the nation.
Insurers laughing all the way to the bank
Insurance industry lobbyists, though influential enough to keep the United States from joining most of the rest of the world in adopting a single-payer health insurance system, have so far put up only feeble token resistance to having to incur the financial risk inherent in covering pit bulls.
On the contrary, the insurance industry appears to be laughing all the way to the bank.
There are just two ways to make a buck in the insurance industry: to minimize risk, so as to avoid making payouts to victims of accidents and disasters; and to spread the risk, so that the cost of making whatever payouts are necessary is shared among as many premium-paying policy holders as possible.
Even without laws compelling insurers to cover pit bull owners, many insurers do, some of them unawares, when pit bull owners lie about the breeds of dog they own in order to get insurance on a mortgage or rental agreement.
“While the number of dog-related injury claims decreased 4.6% compared to the previous year,” falling to 16,991, the Insurance Information Institute noted in a Dog Bite Prevention Week 2021 media release, “the amount paid for these claims increased 7.1%—a record high.
“The average claim payment was $50,245 in 2020, up 12.3% from $44,760 in 2019,” the Insurance Information Institute said.
Altogether, U.S. insurance industry payouts for dog attacks have increased by 21% in just three years, a total of $179 million, despite declining numbers of claims.
More uninsured pit bull owners
The declining number of insurance claims might be attributed to increased numbers of uninsured dog owners, specifically pit bull owners who choose not to pay the elevated premiums that their choice of dogs incurs, if they are to be adequately covered.
The soaring payouts, on the other hand, clearly coincide with the rising numbers of fatal and disfiguring injuries inflicted by pit bulls.
Advocates for the New York, Nevada, and pending Arizona legislation argue that requiring insurers to cover pit bulls et al, for the same premiums as are charged to cover other dogs, will lead to more pit bulls being insured.
This would mean fewer cases in which the victims of pit bulls, Rottweilers, et al are unable to recover damages from the owners, and are bankrupted as well as bereaved and disfigured by the risk-taking behavior of pit bull owners.
Yet legislation requiring all insurers to either cover all dog breed types on an equal basis, or cover none, may have the perverse opposite effect of encouraging more insurance companies to adopt exclusion clauses, exempting dog bites from any coverage under conventional homeowners and renters policies.
Even if this does not happen, such legislation is inherently unjust to homeowners and renters who either have no dogs, or keep dogs of the more than 250 breeds recognized by major U.S. kennel clubs which have seldom if ever been involved in fatal or disfiguring attacks.
Insurance industry is about profits, not justice
Such laws are “entirely unfair to homeowners who don’t have dogs, and dog owners with friendly dogs, because they all will end up paying for the harm caused by bad dogs. It isn’t right and it makes no sense,” assesses California attorney and Dog Bite Law blogger Kenneth Phillips.
The insurance industry, in business to make a profit, not to enforce justice, need not care. Almost all mortgage holders and renters are required to pay for insurance policies, directly or indirectly.
If everyone else is required to help pay for the damages incurred by the relatively few risk-takers, the insurance industry profits far more than it could if only the risk-takers paid the price, by paying appropriately higher premiums for doing whatever it is they are doing, assuming they could be persuaded to pay any premiums at all.
Minimizing risk to maximize profits, for insurers, means using actuarial tables to isolate the factors most likely to result in payouts, and then not issuing insurance policies to people inclined toward risky behavior––or charging higher premiums of risk-takers, who unfortunately are then more inclined than most other people to take the risk of going uninsured.
Examples of demonstrably risky behavior leading to high and frequent insurance payouts include speeding, drinking and driving; riding a motorcycle; building on flood plains and in landslide zones; and allowing accumulations of flammable trash and dry vegetation.
High risk breeds
Comparably risky, relative to human exposure to the threat, is keeping a pit bull or dog of another “bully” breed, such as Rottweiler or bull mastiff.
Making up just 6% of the total U.S. dog population, pit bulls alone have inflicted more than two thirds of all fatal and disfiguring dog attacks in the U.S. for at least the past 40 years.
That translates into two-thirds or more of all dog-related insurance payouts.
Altogether, high-risk breeds are under 10% of the U.S. dog population, but appear to account for more than 90% of the money paid out for dog attacks.
The insurance industry of course knows this.
Insurance retailers––the home and automobile insurers whose names are familiar––spread the risks they take in insuring individuals by insuring themselves with “re-insurers.”
Most major re-insurers long ago recognized insuring pit bulls as a risk factor jeopardizing profits, so quit re-insuring policies that cover them.
This is why at least 13 major insurance retailers have for more than a decade refused to cover pit bulls, along with several other dog breed types associated with either high or frequent payouts, or both: typically Rottweiler, Doberman, German shepherd, bullmastiff, and Akita.
Doing dangerous things anyway
Sometimes, though amply informed of the risks involved in their behavior, segments of society insist on doing risky things anyway. Taking their cue from the insurance industry itself, the risk-takers may develop political clout enough to spread the cost of disasters resulting from their own bad decisions to the rest of society.
This is why federal legislation requires that taxpayers throughout the U.S. must subsidize people––mostly rich people choosing water views––who build and live in floodplains and along coastlines vulnerable to erosion, landslides, rising oceans, and hurricanes.
And this is why the insurance industry will now cheerfully do nothing to help prevent fatal and disfiguring attacks by pit bulls et al, but will continue to issue more and bigger checks to cover the mayhem.
In states in effect requiring everyone to cover the risk, it is literally no skin off the insurance industry’s buttocks, even for transplants to other parts of attack victims’ bodies.