With Tigers Living Next Door, Exotic Pet Insurance Business Soars

While the liability insurance is an important part of exotic pet regulation that is lacking, Pacelle said even a universal requirment would not be enough.

"The root cause of the problem is we do not have policies to forbid this sort of irresponsible behavior people have no business having a lion or a tiger in their backyard or basement," he said. "These are wild animals. They do not belong as pets in our households."

Kalmanson travels the country to inspect many of the animal sanctuaries he insures, and make suggestions as to how owners can improve their facilities. The biggest problem with keeping these homemade zoos safe, he said, is that the owners often don't have the money to upgrade them, and eventually become "animal broke." Often what happens, he said, is that animal owners buy the animals when they are young, and cute -- and small. But they do not take into account that a full-grown animal needing a larger cage and a bigger food supply will ultimately cost many thousands of dollars a year to keep.

"It's expensive," Kalmanson said. "A lot of people just don't have the resources. It costs them a lot more money and they don't want to renovate, change or retrofit their facilities."

Another problem, he said, is that regulations vary state to state and need to be more consistent, and there also needs to be more stringent federal regulations.

"There are quite a few animals in facilities that should not be there," Kalmanson said. "If nothing else, the county and sheriffs should know what's in their area."

There's no denying the allure of a beautiful snow leopard or a powerful python, Kalmanson said, but many exotic pet facilities don't have adequate cages for their animals and don't have insurance. Animal owners should exercise caution and take the necessary steps to make sure they and the animals are safe, he said.

"A lot of people do what they want," he said. "They want the animal, the tiger leopard etc. and I just don't think they take enough safeguards to preserve the animal and to do it right."

ABC News' Lauren Effron contributed to this report

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