Dogs Not Homeowner Insurers’ Best Friends

A steep rise in dog-bite incidents--including the notorious San Francisco case in which a lacrosse coach was killed by her neighbor’s dogs--has spurred homeowner insurers to reconsider how they cover canines.

Mercury Casualty Co., citing higher claims costs for households with dogs, recently began offering a 10% discount on homeowners insurance for families that don’t own a dog or are willing to take their dog off their homeowner policy.

Los Angeles-based Mercury is the latest insurer to change the way it writes liability coverage for dog owners. Over the last several years, many insurers have implemented rules aimed at limiting their exposure to dog-bite claims.

That’s mainly because dog bites have become a $310-million annual claim problem, accounting for about one-third of liability losses on homeowners insurance, said Loretta Waters, a spokeswoman for the Insurance Information Institute in New York.

“In the last three or four years, we have had an increase in dog bites across the country,” said Nanci Kramer, a spokeswoman for the California Department of Insurance. “All too often, it’s the same breeds too. And we’re not looking at little bites. These are maulings.”

Those attacks often lead to lawsuits against the dog owner--and to a liability claim against the owner’s insurance company.

“Companies are certainly reevaluating the dog liability issues this last year,” said Candy Miller, a spokeswoman for the Insurance Information Network in California. “But the way different companies handle it is all over the board.”

Some insurers focus on dog breeds when deciding on coverage.

“When you look at the dog attack statistics, you see that certain breeds present a very significantly increased risk of death or injury to people and other animals,” said John Millen, vice president of communications at Nationwide Mutual Insurance in Columbus, Ohio, which won’t cover homeowners who own certain breeds of dogs.

Nationwide will not insure households that have Rottweilers, Doberman pinschers, pit bulls, Presa Canarios, chows or breeds that are part wolf, he said. It was two Presa Canarios that killed San Francisco lacrosse coach Diane Whipple.

“Those folks are just ineligible for coverage with us,” he said.

Other insurers don’t take a hard line by specific breeds, but do take a look at individual dogs.

“Part of our underwriting involves asking whether there are dogs in the house and if there’s been a history of bites,” said Bill Sirola, a spokesman for State Farm Insurance. “If there has been a bite history, we would ask that the offending dog be removed from the premises, or we would not be able to offer coverage.”

Farmers Insurance Group also imposes dog-by-dog restrictions and has a no-tolerance policy for bites.

“If they have a vicious animal, we would either exclude the pet from the policy or we would not write the policy at all,” said Mary Flynn, a Farmers spokeswoman.

Prospective policyholders are asked to report whether they have a “vicious animal” on the premises, which leaves some discretion to the homeowner. But once there’s a claim, the pet gets bounced from the policy--specifically excluded from coverage, just like expensive furs and office equipment--even if it’s restrained, muzzled or caged, Flynn said.

The company also won’t take new business from people who have had dog-bite claims in the last three years--even if the family no longer owns the pet.

Other insurers frequently charge higher premiums, suggest the homeowner get rid of the pet or exclude the dog from coverage once a dog has shown a propensity to bite, Waters added.

Some will cover a pet if the homeowner takes the dog to classes aimed at modifying its behavior, or if the dog is restrained with a muzzle, chain or cage, said Waters.

Other insurers are less focused on troublesome canines, but those companies are becoming increasingly rare.

“More and more companies are looking to breed now,” said Waters. “The statistics indicate that certain breeds are having more and more problems.”

But the message to homeowners is clear: Pay attention to the pet or be ready to pay.

“Some people seem to have a view that they should use dogs for security purposes, when that’s more of a detriment to them than anything else,” Waters said. “A good alarm system would serve you much better than the potential liability of an aggressive dog.”

Just as consumers are well-advised to look at crash statistics when buying a car, insurers advise that they look at bite statistics before buying a dog.

“We recommend--and some veterinarians do too--that you try to find out about the history of the dog and the breed before you adopt,” said Nationwide’s Millen. “A family pet affects so many areas of your life. That history can give you an idea of what to expect before it becomes a problem.”

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Times staff writer Kathy M. Kristof, author of “Investing 101” (Bloomberg Press, 2000), welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof@latimes.com. For past Personal Finance columns visit The Times’ Web site at www.latimes.com/perfin.