When Fido becomes family: insurance industry is impacted by new trends in American pet ownership


By: Marissa Dunn

The verdict is in: Americans view pets as family.  70% of American households (90.5 million families) own a pet,1 and 57% of millennials own a dog, some even choosing to have a fur family over a traditional family.2  New vocabulary is emerging to capture this concept, such as Pet Parents, Fur Babies, Dog Mom, Dog Dad, Grand Dogs, the list goes on and on.  Pregnancy announcements declare the family pet is now a “big brother” or “big sister” to their new Human.  Clearly the concept of the family dog has drastically evolved from what it was decades ago.     

But are laws changing to reflect how we view pets as members of our household?  Recent legislation would suggest yes.  In New York, a law was recently passed which allows pets to be buried alongside their humans in human cemeteries, allowing pet parent and fur baby to rest in peace together.  NY CLS N-PCL § 1510.   

But defining pets as family members also impacts the insurance world.  For starters, it has opened a new market that did not exist decades ago.  Pet insurance has emerged as a major industry.  In 2020, $1.99 billion worth of pet insurance premiums were written, with 3.1 million pets insured by last year. 3    

As well, we are starting to see state legislatures step in to regulate insurers regarding pets, specifically in the realm of breed restrictions. Last month, New York state passed a law (A. 4075 and S. 4254) banning homeowner’s insurance from using breed as a factor in underwriting.  Instead, they will be limited to the dog’s specific dangerous behavior.  While homeowners with dangerous breeds may be excited to see breed restrictions go, landlords may have lost what was the last legal foothold to restrict large breeds from their homes in the face of rising Emotional Support Animal fraud.   

New York’s regulation of breed exclusions in insurance may impact landlord/tenant law as well.  Instances of fake Emotional Support Animals (ESAs) have been on the rise, with many people claiming their pet is an ESA to skirt travel or rental restrictions.4   While generally an ESA letter is enough to trump a landlord’s breed restrictions, the U.S. Department of Housing and Urban Development clarified that landlords do not have to accept an ESA if the landlord’s home insurance carrier considers it to be a dangerous breed.5  With New York eliminating “dangerous breed” categorization and ESA fraud on the rise, landlords may be stuck with big paws in their pads. 

The takeaway is this: as Fido becomes Family, insurers can expect both a new market in pet insurance and new legislation on coverage exclusions.   

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