Up to 47% of American households have a dog, and for insurance companies, these households represent a risk. In 2013, homeowners insurance policies paid out some $ 483 million in dog bite liability claims.


Obviously, insurance companies would rather not be shelling out hundreds of millions of dollars over dog bites. But what are they doing to cut costs and how does this affect dog owners?


Homeowners insurance protects homeowners from liability claims. In the case of dog owners, this means your policy could cover the costs if your furry friend harms someone.


“As much as we love our pets, dogs are unpredictable and can act aggressively with seemingly no warning and despite the fact that they have been our family pets for years,” says Linley Jones, president of the Georgia Trial Lawyers Association and founding partner of the Linley Jones Firm in Atlanta.


How big is the problem?


Every year, dogs bite about 4.5 million people in the United States, and 885,000 of those people require medical attention. About half are children.


“Dog bite claims are a huge source of liability claims against homeowners, if not the No. 1 source of claims,” says Dr. William Warfel, professor of insurance and risk management at Indiana University’s Scott College of Business.


In 2013, these claims accounted for one-third of all paid homeowners insurance liability claims dollars, according to the Insurance Information Institute.


The costs associated with a dog bite can be extensive—potentially encompassing emergency room treatment, reconstructive surgery and even emotional therapy. In 2013, the average cost per claim was $ 27,862. That number has risen considerably over the last 10 years, from $ 19,162 in 2003.


Do you own a restricted breed?


Insurance companies mitigate their risks in 2 ways: by raising costs for those who pose the biggest risk, or by denying coverage altogether. This has largely meant enacting breed-specific policies targeting certain dog breeds that insurance companies believe are implicated in more than their share of dog bite claims. For owners of these breeds, such as pit bulls, Rottweilers and Dobermans, insurance can be costly or difficult to obtain.


Understandably, many pet owners and advocacy groups believe these policies unfairly discriminate against responsible pet owners and their well-trained dogs. For them, insurance companies should be more focused on preventing dog bites from all dogs rather than just those designated, perhaps erroneously, as more dangerous.


Laura Hagen, deputy director of advocacy for the Massachusetts Society for the Prevention of Cruelty to Animals, says, “The MSPCA’s adoption centers see directly the impacts of insurance company policies targeting specific breeds of dogs, either because dogs are surrendered when a homeowner cannot secure a policy or when adopters do not consider those breeds prohibited by their insurance company.”


Not all insurance companies discriminate against entire breeds. Some judge pets on a case-by-case basis, looking at the animal’s history and proclivity to aggressive behavior.


What you need to know


As a dog owner, you may believe wholeheartedly that Rover wouldn’t harm a human, but many people are caught off guard when they are the subject of a dog bite liability claim, or when they or their children are harmed by another person’s pet. NerdWallet reached out to several experts to get their take on what dog owners should know about homeowners insurance.


1. Owning a dog may make it difficult to find insurance.


With breed-specific policies, you may pay more for insurance or have a hard time finding a company to cover you.


“Breed-specific policies also create significant difficulties for renters, who find many property owners’ hands tied by their insurance policies and unable to offer good renters a home—simply because of a dog’s breed and regardless of whether a particular dog has no history of biting,” Hagen says.


2. You shouldn’t lie to your insurance company about your dog.


The insurance company will ask about your pet(s) in an effort to determine their risk. “Given the magnitude of the exposure on this issue, the application for insurance will contain various inquiries—what kind of dog, has a claim been filed previously,” says Warfel.


Warfel says that while the questions could indicate reluctance to cover you, honesty is the best policy. Lying could have significant repercussions. “Depending on the response, the carrier may decline the application. Being truthful is important,” he says. “Failure to disclose may be grounds for voiding a policy.”


3. You should understand how dogs affect your policy.


Being informed is tantamount to ensuring you are covered if something should happen. “Dog owners should confirm that their homeowners insurance policy covers injuries arising from their dogs and that there are no exclusions that would prohibit coverage for a dog-related incident,” Jones says. “Read your policy and talk to your insurance agent if you are unsure.”


In many American households, pets are considered family members. But unlike other members of the family, your dog could cost you when it comes to insuring your home. As with most insurance matters, the best advice is to be honest with your carrier and informed when it comes to your policy specifics.


Woman and dog image via Shutterstock.