The High Cost of Shouldering Actuarial Risk

Owning guns, cars, swimming pools, and certain animals predictably leads to an increased risk of bad outcomes and jaw-dropping levels of potential liability.

Should the social costs of voluntary ownership decisions be communized or privatized?

And if we agree that they should be privatized in the form of mandatory liability insurance, as we do with cars, what’s it say if no insurance company will underwrite the risk?

FROM I-NEWS IN THE U.K.:

“Bully dog owners have been left in a panic over the future of their pets after a leading charity announced it is pulling the Government-mandated insurance.

“The Dogs Trust was the only organisation willing to provide the type of insurance needed by XL Bully owners, but from July it will no longer be available.

This does not mean the dogs are set to be totally banned as ministers have pledged to find an alternative insurance solution. 

“But owners and animal rescue centres fear the uncertainty will mean some dogs are dumped or destroyed in the “panic” over the looming insurance void.

“‘Owners feel the rug has been pulled out from under us,’ one said.

“Conservative ministers banned the sale and breeding of XL Bullies in February 2024. But they allowed the dogs to be kept so long as owners met a set of strict requirements.

“The controversial breed had been ‘disproportionally involved’ in a sharp rise in fatal dog attacks leading up to the ban, according to Government statistics.

“More than 55,000 XL Bully dog owners across the UK got a legal exemption before the ban came into force in February 2024.

“Their pets must be microchipped, neutered, kept on a lead and muzzled when in public. Owners must also have third-party liability insurance, which costs £25 a year with the Dogs Trust.

“Decision to pull insurance ‘not taken lightly’

“The charity said it had never intended to act as an insurer in the long-term, explaining that the role was “leading to a significant increase in our costs”.

“It said it was ‘incredibly disappointed’ to have made the ‘difficult decision’, adding: ‘It is not one we have taken lightly’.