United States: When Fido Becomes a Family: The Insurance Industry Is Affected by New Pet Ownership Trends in the United States
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The verdict is in: Americans consider pets like family. 70% of American households (90.5 million families) own a pet,1and 57% of millennials own a dog, with some even choosing to have a furry family over a traditional one.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 state that the family pet is now a “big brother” or “big sister” to their new human. Obviously, the concept of a family dog has evolved considerably from what it was decades ago.
But are the 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 that allows pets to be buried alongside their humans in human cemeteries, allowing the pet parent and furry baby to rest in peace together. NY CLS N-PCL § 1510.
But defining pets as family members also has an impact on the world of insurance. For starters, it opened up a new market that didn’t exist decades ago. Pet insurance has become a major industry. In 2020, $1.99 billion in pet insurance premiums were written, with 3.1 million pets insured last year.
Additionally, we are beginning to see state legislatures stepping in to regulate pet insurers, particularly in the area of breed restrictions. Last month, New York State passed a law (A. 4075 and S. 4254) prohibiting home insurance from using race as an underwriting factor. Instead, they will be limited to the dog’s specific dangerous behavior. While owners of dangerous breeds may be glad to see breed restrictions disappear, owners may have lost what was the last legal foothold to restrict large breeds from their homes in the face of growing pet fraud. emotional support.
New York regulations on race exclusions in insurance may also impact landlord/renter law. Cases of fake emotional support animals (ESAs) are on the rise, with many people claiming their pet is an ESA to circumvent travel or rental restrictions.4 Although usually a letter from the ESA is sufficient to override a landlord’s race restrictions, the U.S. Department of Housing and Urban Development has clarified that landlords do not must accept an ESA if the owner’s home insurance considers it to be a dangerous breed.5 With New York eliminating “dangerous breed” categorization and ESA fraud on the rise, owners can be stuck with big paws in their pads.
The takeaway is this: as Fido goes Family, insurers can expect both a new pet insurance market and new coverage exclusion legislation.
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