When you look at the premium on your homeowners policy you may wonder how your insurance company came up with that figure. The answer is underwriting.

Broadly, underwriting is the process through which an insurance company analyzes and decides whether to insure a risk. Rates have been developed for hundreds of factors during the underwriting process to determine if an insurance company will issue a policy and how much it will charge. Some are probably obvious—value of the risk, claims history, and amount of coverage requested are all underwriting factors.

However, some factors may be far less obvious. One such factor that often is used by homeowners insurance companies pertains to dogs. Many insurance companies will use the breed of a dog owned by an applicant as an underwriting factor. Often, those homeowners who have a breed of dog that is considered dangerous (e.g., pitbull, rottweiler and doberman pinscher), will be charged a higher premium, offered reduced coverage, or even have a policy canceled because of the dog breed.

This will no longer be the case for New York state policyholders. Recently, several new laws have been passed in the state that prohibit insurance companies from taking certain adverse actions against homeowners based on the breed of dog they own. Under state law, insurance companies now are prohibited from discriminating against a dog based on its breed. Specifically, insurance companies cannot refuse to issue or renew a homeowners policy based on the breed of a dog that a person owns. Similarly, insurance companies cannot cancel a policy based solely on the breed of a dog. Insurance companies are prohibited from excluding, limiting, restricting or reducing coverage on homeowners insurance policies based solely on insureds owning specific breeds of dogs.

There are some exceptions. Insurance companies can rate a homeowner’s premiums based on a dog breed, but only if a specific dog in a specific home is found to be dangerous under provisions of New York Agriculture and Markets Law.

Do you have any questions about how your homeowners insurance policy may change based on this new law? Give our agency a call, we are more than happy to review your policy with you.