A portrait of the author's office mate
As we reported here last week, New York Gov. Kathy Hochul on Oct. 30 signed into law a bill that prohibits insurers from declining, cancelling, non-renewing, or increasing the premiums for homeowners coverage based solely on the fact that a dog of a particular breed lives in the home. The new law applies to policies issued, renewed or modified on and after January 28, 2022. A few of you have emailed the research department with questions about it. It's important to know that the dog breed part is not the complete story.
The law created a new Section 3421 of the New York Insurance Law. Subsection 1 of Section 3421 imposes the ban on underwriting dog breeds. However, there is also a subsection 2 that states:
The provisions of this section shall not prohibit an insurer from refusing to issue or renew or from canceling any such contract or policy, nor from imposing a reasonably increased premium or rate for such a policy or contract based upon the designation of a dog of any breed or mixture of breeds as a dangerous dog pursuant to section one hundred twenty-three of the agriculture and markets law, based on sound underwriting and actuarial principles reasonably related to actual or anticipated loss experience subject to the applicable provisions of section three thousand four hundred twenty-five of this article.
Two things important to know about this provision:
The phrase "applicable provisions of section three thousand four hundred twenty-five of this article" refers to New York Insurance Law Section 3425, which addresses cancellation and renewal of personal lines insurance policies. Therefore, even if the insurer has the right to decline or non-renew a homeowners policy or hike the premium because of a dog, it must still follow the constraints of Section 3425.
More significantly, Section 123 of the New York Agriculture and Markets Law, titled Dangerous dogs, permits actions that include:
- Anyone who witnesses an actual or threatened attack by a dog upon a person or certain other animals may make a complaint to the municipality's dog control officer or police.
- The witness, police or dog control officer may make a complaint under oath to a judge. The judge must then decide whether there is probable cause to believe the dog is dangerous. If she does, she must order the dog to be seized and held. She must then hold a hearing on the complaint within five days with at least two days' notice to the dog owner. The person bringing the complaint has the burden of proving "by clear and convincing evidence" that the dog is dangerous. If the judge is convinced, she must order the dog to be spayed or neutered, microchipped, and one or more of other actions, such as temporary confinement, behavioral analysis and training, mandatory leashing or muzzling, mandatory liability insurance, up to permanent confinement or euthanasia.
There are other provisions relating to possible civil or criminal liability for the dog owner. The point of all this is that, while insurers will no longer be permitted to underwrite dog breeds, they will still be permitted to underwrite individual dogs. It will be acceptable for them to ask on an insurance application whether the applicant owns a dog and about the animal's history of attacks or bites. They can also ask whether a judge has ever designated it to be a dangerous dog. The process laid out in Agriculture and Markets Law Section 123 is extensive, time-consuming and probably expensive. It is not something an ordinary and reasonable person is likely to forget to mention when asked this specific question.
Most homeowners insurance policies include a provision similar to this one from the Insurance Services Office Homeowners 3 - Special Form, HO 00 03 05 11: "We do not provide coverage to an 'nsured' who, whether before or after a loss, has ... Intentionally concealed or misrepresented any material fact or circumstance; ... or ... Made false statements ... relating to this insurance." An insured who "forgets" that his dog was judged by a court to be dangerous risks having coverage denied based on this provision. It is a bad idea to be less than truthful about this.
The new law does hamper underwriters' ability to restrict availability of coverage based on a dog's breed. No longer will they be able to reject applicants solely because they own pit bulls. However, they still have discretion when it comes to individual dogs of any breed, whether they are rottweilers or rabid chihuahuas. The state legislature did not leave insurers defenseless in this matter. Many may decide to restrict their writings in New York because of this new law. However, with careful underwriting, such a drastic step may be unnecessary.