Could Owning A Dog or a Wood Stove Cost You Your Home Insurance?

It might sound counterintuitive, but when insurers look at risks, bad dogs throw up a big red flag, especially in California and Florida.

For homeowners in a panic about losing their insurance in besieged states such as California and Florida, it’s educational to look at risk the way insurers do. They basically play a numbers game, the same way a Vegas casino owner might. What’s risky? What’s not so risky?

Along with lightning strikes and fraudulent roofing claims, one of the less-known deal breakers that pops up is dogs. Canines that bite people near their homes cost insurers way more than you might expect, and can be the final straw for an insurer that’s on the fence about whether to insure your home.  

According to insurance.com, “While you may consider your dog to be your best friend, your insurance company might consider it a significant liability risk. In fact, some homeowner's insurance companies will go so far as to not insure homes with certain dog breeds or, at best, exclude breeds like Rottweilers, German shepherds, and pit bulls from coverage.”

Here’s a sample of the claims from 2021, a fairly typical year.

Risk Factors are Not Always “Fair”

The insurance industry’s perception of risk does not always reflect comparative risks. They tend to evaluate risks in broad terms.

For example, they also don’t like wood stoves and swimming pools. I share their dislike of wood stoves, but for a different reason. They’re heavy polluters, and don’t belong in urban areas at all. The insurer is mainly looking at the risk of burning your house down with wood fires. I would hazard to guess that most people don’t maintain their chimney system for wood burning properly, because it’s labor intensive.

But the data shows that wood stoves are NOT the most likely source of house fires. What are? Portable electric heaters, as this chart from the NFPA shows.

Fire starters? Portable electric heaters start far more house fires than wood stoves, but wood burning will ding your homeowner insurance costs.

What about swimming pools? Pools can be dangerous, especially to young kids, if not fenced and monitored properly. But in a given year, only about 4,000 injury claims related to pools are filed.

Given the scale of the home insurance market (with policies numbering in the millions), however, this figure seems negligible at best. Does it really need to become a major factor in the price or availability of home insurance?

The insurance industry is a highly profitable business. They base their policy costs and availability on spreading risk to a larger pool. In a way, they’re hybrid socialist-capitalists. They provide a safety net to higher risk properties with premium paid regularly by lower risk homeowners.

When this system works, it’s a lifesaver for people in distress. But some of the risks in their wheelhouse seem overblown, and deserve a second look. Sure, raise the costs on a homeowner with pit bulls or other aggressive dog breeds. But not all risks are one-size-fits-all. They shouldn’t be called out as red flag issues, when they’re relatively insignificant in terms of the number of claims versus the big picture.