Breaking Breed Barriers: Pawsitive Insurance Providers

By Judy Bellack, Industry Principal, The Pet-Inclusive Housing Initiative

Liability is a serious thing, especially when managing a multimillion-dollar apartment asset. Every policy decision and many partnerships must be viewed through the lens of accountability, culpability, and obligation. Insurance underwriters have become experts at predicting and calculating risks and informing their policy guidelines and restrictions accordingly – or so we like to think.

What about pets?

More rental housing operators than ever before are allowing pets – no surprise, as pet ownership is at an all-time high. Savvy managers are capitalizing with pet-focused marketing campaigns and the addition of pet amenities and events to attract and keep pet owners. The most in-the-know operators are going a step further by lifting breed and weight restrictions to maximize their ability to capture this audience – companies like MAA, MC Companies, Paradigm, TMG, Milhaus and JC Hart, just to name a few. But what does this mean in terms of insurance protections against pet-associated liability? Don’t most insurance providers restrict breeds in housing?

The new insurance landscape

The reality is that many carriers are now free from breed restrictions for landlords. State Farm, Allstate, Chubb, USAA and others have pivoted away from breed as a determinant of potential liability, focusing instead on any individual dog which may have a track record of aggression. Similarly, renters and homeowners may now find insurance without breed restrictions.

Many multifamily operators who have lifted breed restrictions initially assumed that their insurance coverage would present an obstacle — only to find out that no such obstacles existed. 

Why? While insurance companies are obligated to implement actuarially sound policies, the evidence suggests that policy restrictions are based on breed stereotypes rather than statistical facts. Recent studies suggest that only 9% of a dog’s behavior is linked to breed, proposing that genetics are more of a nudge than a destiny; and that humans have been helping to shape dog behaviors for thousands of years. It’s interesting to note that many organizations – including the CDC, American Bar Association and American Veterinary Medical Association – recommend against crafting policy based on breed, but rather on individual dog behavior, and further recommend addressing the underlying reasons for incidents of dog bites (among them a lack of generic dangerous dog laws with an emphasis on chronically irresponsible owners, enforcement of leash laws, and stricter consequences for illegal dog activity). The reality is that any dog is capable of biting given the circumstances; but education and accountability go a long way in preventing this occurrence.

Legislation will likely accelerate the insurance trend

Lawmakers across the country are taking note of the fact that pet owners are having difficulty finding truly pet-inclusive housing. Legislation prohibiting breed-specific barriers has been passed or proposed in over 20 states, much of it focused on prohibiting insurers from denying coverage or increasing the cost of coverage to individuals based on breed. For example, recently passed Colorado HB23-1068, which was signed by the governor in June of this year, not only prevents insurer restrictions based on breed, it also limits pet deposits to $300 and pet rent to $35 or 1% of monthly rent, whichever is greater. Similarly, Illinois HB 1049 was also signed into law in June 2023, and also prevents insurer restrictions/denials/pricing based on specific breed.

This legislation does not mean insurers cannot respond appropriately to dogs with a track record of dangerous behavior; they are allowed to ask about behavior, but they cannot inquire about the breed of the dog. 

Check with your provider

The bottom line? If you’re thinking about easing or lifting pet restrictions, check with your provider. Chances are they may not have restrictions; or, if they do, consider looking elsewhere for your coverage. Also, keep in mind that the resident is ultimately responsible for their pet’s behavior, and that your best protection is to have clear pet behavior policies that are enforced. For more information on how other rental housing operators have successfully become more pet-inclusive, visit the Pet-Inclusive Housing Initiative for industry case studies as well as other resources to help you move forward.