InsureMe Takes a Look at Pit Bulls and Homeowner’s
Insurance
Insurance Referral Service Researches Industry’s
Breed-Specific Underwriting
DENVER (Business Wire EON) April 21, 2008 --
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.
About Bankrate, Inc.
Bankrate, Inc. (Nasdaq: RATE) ("Bankrate") owns and operates
Bankrate.com, a leading Internet consumer banking marketplace.
Bankrate.com is a destination site of personal finance channels,
including banking, investing, taxes, debt management and college
finance. Bankrate is the leading aggregator of more than 300 financial
products, including mortgages, credit cards, new and used auto loans,
money market accounts and CDs, checking and ATM fees, home equity loans
and online banking fees. Bankrate reviews more than 4,800 financial
institutions in 575 markets in 50 states.
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