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 two 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.

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