With Tigers Living Next Door, Exotic Pet Insurance Business Soars

Feb. 24, 2012— -- As state and federal lawmakers continue to wrestle with proposed legislation on exotic pet ownership and trade, one Florida man has built a small-business empire around keeping exotic animals, their owners and their neighbors safe.

Mitch Kalmanson is the wild animal insurance guy, selling sometimes gigantic, multimillion-dollar policies to insure the owners of nature's most ferocious animals and seemingly uninsurable exotic pets -- some of which might live right next door to you.

"I've got circuses, I've got fairs, zoological facilities, private facilities, some people who just want to have exotic animals because they have an interest in it," Kalmanson told Nightline.

Kalmanson started out 20 years ago, when he took over his father's auto and home insurance business and tweaked it. Now his office near Orlando, Fla., contains a vault of wild animal files, filing cabinets full of all the risks he assesses.

"I will probably insure almost every risk," he said.

He has insured lions, tigers, the airlifting of Caribbean wild dolphins to aquariums, charging premiums ranging from $1,000 to $20,000. Insuring exotic animals is a rare trade, and Kalmanson is one of the biggest offices in the country.

Oddly enough, it's not always the animals with the sharpest teeth that cause problems: Kalmanson said zebras are surprisingly mean animals. One zebra he insured turned out to be a bad bet.

"It came up and literally grabbed her hand and took all the meat, down to the bone, off," he said. "Exotic animals are just unpredictable and that's why they're exotic, and they need to be in the proper hands, and I don't recommend them as pets."

Kalmanson himself owns a Florida ranch, where he keeps 27 big cats, a herd of wild African cows called Watusi, and other exotic animals. Perhaps tempting fate, he lives across the street from a development of 700 homes and a golf course. And, yes, the insurer insures himself.

His business shot up 50 percent last year, he said, after a Zainsville, Ohio, incident in October when the suicidal caretaker of an unlicensed animal preserve unleashed over 50 dangerous animals, including lions, monkeys and bears, throwing the small town into a terrorizing lockdown.

"Unfortunately he had no perimeter cage. He had very marginal caging and most of them looked like dog cages that were converted to put a tiger in," Kalmanson said. "These animals could be enclosed and would not have had to have been killed."

Authorities said at the time that given the lack of infrastructure, they had no choice but to kill many of the large animals.

But even under the best circumstances, exotic pets will go dangerously wild. Sandy Herold was uninsured when her 200-pound pet chimp Travis suddenly went berserk and mauled her friend, Charla Nash, ripping off her face, in 2009. That same year, a python allegedly killed a 2-year-old child in Tampa, Fla.

Just this past October, in Odessa, Texas, a 4-year-old boy was attacked and mauled by a 150-pound cougar a relative kept as a pet. The boy suffered significant damage to the left side of his body, and local animal control officials seized and euthanized the big cat.

"This has been going on for years and years-- there is a long and growing casualty list of people who have been injured or killed by dangerous wild animals kept as pets," said Wayne Pacelle, president and CEO of the Humane Society of the United States. "It is inevitable when you have these wild animals in a mix with people, that people are going to be injured and killed."

Currently, only a dozen states require owners of exotic pets to carry liability insurance: Arkansas, Florida, Georgia, Hawaii, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, and Texas. California requires insurance too, but only for circuses and shows, according to the Humane Society of the United States.

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