Insurance Report: 'Beware of Dogs'

In recent years, there has been a lot of attention paid to mold damage and the insurance industry's response to this peril, but water damage is not the only thing that can restrict a homeowner's access to insurance. Pets, it turns out, are a leading cause of liability claims under insurance policies.

That's because dog bites are the largest source of liability losses in homeowners' insurance policies, according to the American Association of Insurance Services.

Dog bites contribute to $250 million of liability losses a year, according to the Insurance Information Institute.

The industry has also become wary of homes with popular recreational features that might create liability risk, according to the AAIS.

Trampolines and swimming pools can sometimes cause a homeowner's insurance carrier to think twice about extending coverage for a property.

When insurers read that other companies are restricting coverage, those restrictions tend to spread within the industry, because nobody wants to become the insurer of choice for people with pit bulls and trampolines, the AAIS warned in a recent article about household hazards.

One factor contributing to the underwriting changes is health insurance. Higher health insurance deductibles mean that accidental injuries once paid by health insurance policies now create growing out-of-pocket expenses for victims. That means hat more medical claims may have to be paid under personal liability policies.

The AAIS says that many property/casualty insurers are deciding that the best way to avoid liability claims associated with certain hazards is to avoid insuring those hazards in the first place.

The AAIS has released data about household hazards to help firms that want to "move beyond a strict 'yes or no' approach to underwriting certain hazards.

"The industry as a whole may suffer if consumers come to believe they are better off not being candid with their insurers about what they have and what they do at their homes," the industry association said.

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