In the past several years, there has occasionally been stories that crop up about consumers who are rejected for home insurance policies because of the types of dogs they own. Breeds like pit bulls and rottweilers often raise eyebrows of insurers because they are sometimes associated with claims that stem from bites and other injuries. But these days, pit bulls are being used as guide dogs in a lot of cases, and some disabled Americans have filed a lawsuit to make sure they can still get home insurance even when they rely on that breed. This issue is certainly something that will have to be monitored by insurance agents going forward, as a decision in the suit could have a major impact for the industry.
The lawsuit, filed in Oregon last month, states that home insurance providers should not be able to deny coverage to disabled Americans whose service dogs happen to be pit bulls, because it violates the Fair Housing Act, a federal law, according to a report from the Associated Press. Specifically, they argue the FHA says that housing and housing services (including insurance) cannot be denied based on the breed of service animal only.
A matter of interpretation?
Dennis Steinman, a lawyer who helped bring the case to court, told the news agency that while individual dogs can be used in denials of coverage – that is, those with a history of aggressive behavior – denying them on the basis of breed alone would likely be illegal, the report said. This issue, however, does not fall under the Americans with Disabilities Act, because that law only applies to federal buildings and public spaces.
How much of an issue is this?
Some 700 cities nationwide currently have blanket laws related to pit bulls and other breeds reputed to be aggressive, and most state laws allow insurers to act more or less the same way, the report said. While some insurers don’t have a problem insuring homeowners who have such a dog, others do and will therefore not extend coverage to those consumers. Still more might offer coverage, but at a potentially inflated rate that can cost them far more than plans otherwise would. Experts say the reason for this is simple enough.
“[Dog bites or attacks] can get very expensive in a hurry,” Michael Barry, a spokesman for the industry’s Insurance Information Institute, told the news agency.
The more insurance agents can do to help their clients understand what goes into the insurance underwriting process – including what their policies do and do not cover, and why – the better off everyone on both sides of the relationship is likely to be. That’s because an increased understanding of their coverage is often key for consumers when it comes to feeling good about their plans, and that, in turn, typically leads to higher rates of customer satisfaction for agents. In addition, that will usually translate into higher client retention rates as well.