If the Dog Bites, Are You Covered by Your Home Insurance?

By Nick DiUlio, InsWeb.com

It may be a reality that pet owners don’t want to face, but dog bites are far more common – and costly – than many people may realize. If your homeowner’s insurance policy doesn’t cover it, even a minor dog bite could send you to the financial pound.

According to the federal Centers for Disease Control and Prevention, dogs bite more than 4.7 million people every year, resulting in more than $400 million in medical costs. Meanwhile, dog-bite insurance claims have been rising steadily for almost a decade. The nonprofit Insurance Information Institute says the cost of dog-bite claims jumped 53 percent from 2003 to 2011. Dog-bite claims now account for more than one-third of all homeowner’s insurance liability claims – equaling about $1 billion in damages every year.

“Rising medical expenses as well as the growing size of legal settlements are some of the factors driving up the significant increase in the cost of (dog bite) claims,” says Frank Darras, a consumer attorney who specializes in insurance. “With this increase, it’s more important than ever for homeowners to take the necessary steps to limit their financial exposure.”

The problem is, not all homeowner’s insurance policies cover costs associated with dog bites, and even those that do often exclude certain “dangerous” breeds like German Shepherds, Rottweilers and Doberman Pinschers.

As a result, a small company in Florida now is offering a new type of dog-bite liability insurance. Developed by commercial insurance agent and dog owner Debbie Turner, the Covered Canine policy lets dog owners buy $50,000, $75,000 or $100,000 in dog-bite liability insurance; no breeds are excluded.

Turner’s new brand of insurance, which would be separate from and in addition to your basic homeowner policy, advertises a minimum premium of $75 a year. Covered Canine currently is available only in Florida, but has plans for expansion in the coming years. If you don’t live in the Sunshine State, you still can take immediate action to protect yourself from the financial consequences of a snapping pooch.

Are you already covered?

If you own a dog, the most important thing to find out first is whether your homeowner’s policy covers canine liability – even if your dog is smaller than the average cat.

“Dog-bite insurance coverage is a must,” says Shane Fischer, a personal injury attorney in Florida. “Even if you have a small dog, you should definitely find out if you’re covered, because all dogs can potentially bite, and the bite could get infected. Since the law treats any subsequent infection as stemming from the initial dog bite, your little toy breed could potentially cause thousands of dollars in bills.”

The good news is that most basic homeowner’s policies do cover injuries resulting from dog bites, says Tom Simeone, a personal injury attorney and part-time law professor in Washington, D.C.

“While … homeowner’s and renter’s policies may omit coverage for dogs, I have not seen that in the close to 20 years I’ve been practicing,” Simeone says. “Nonetheless, you should still check with your agent or broker to make sure the coverage is there. If so, you don’t need to purchase any additional coverage.”

Be honest with your insurance company

If you’re applying for homeowner’s insurance, you will be asked whether you own a dog. You’ll also probably be asked to identify the breed. This is where things can get hairy.

“I’ve seen dog-bite claims that have ended up costing the insurance companies six figures in damages when all is said and done,” says Matthew Avellino, president and CEO of AC Risk Management Inc., a property and casualty insurance brokerage in New York. “Because of the higher risk, owning one of the commonly restricted breeds of dogs – like a pit bull, German Shepherd or other type of ‘violent’ dog – is the largest red flag for obtaining homeowner’s insurance, along with (having) a trampoline or buried oil tank.”

Nonetheless, Avellino says, it’s important to be honest with your insurer from the outset. If you lie on your application and your dog bites someone a few years down the road, not only will the injury not be covered, but your insurer carrier may drop your coverage.

What if you’re not covered?

Loni Shiver knows how financially devastating a dog bite can be. As a senior account manager with the Poms & Associates insurance brokerage in California, she’s seen her share of dog-bite liability claims – and some of them are astronomically expensive.

For instance, Shiver recently handled a dog-bite liability claim from a client who owned a German shepherd. This dog had no history of biting people, yet one night, entirely unprovoked, it suddenly began mauling a female houseguest. The woman’s right arm and shoulder were badly injured, resulting in long-term nerve damage.

The good news is that Poms & Associates paid the claim under the homeowner’s insurance policy. The bad news is that the claim maxed out the liability limit of $500,000, and that didn’t even begin to cover the legal fees and additional medical costs.

“This claim had a huge gap in coverage,” Shiver says. “This is one of the most incredible claims I’ve dealt with. And I know that most of us think this could never happen with our dog, but it most definitely can, and you need to make sure you’re covered.”

Regardless of whether your standard homeowner’s policy covers dog bites, Shiver recommends that dog owners consider obtaining umbrella insurance coverage.

Umbrella insurance is designed to give homeowners extra liability protection above and beyond the limits on a typical homeowner’s policy. Depending on the insurance company, Shiver says, homeowners can add up to $5 million in liability protection under some umbrella policies. The coverage kicks in when the liability on your other policies has been exhausted.

If the German Shepherd owner “had bought an umbrella policy, it would have cost her maybe an extra $200 a year,” Shiver says. “And then we could have continued helping her financially even after her homeowner liability had been maxed out.”

Dog ownership tips

To reduce the chances of your dog biting someone, the Insurance Information Institute offers these seven tips:

1. Consult with a professional, such as a veterinarian, animal behaviorist or breeder, to learn about suitable breeds of dogs for your household and neighborhood.

2. Spend time with a dog before buying or adopting it. Use caution when bringing a dog into a home with an infant or toddler.

3. Have your dog spayed or neutered. Studies show that dogs are three times more likely to bite if they are not “fixed.”

4. Socialize your dog so it knows how to act around people and animals.

5. Teach children to refrain from disturbing a dog that is eating or sleeping.

6. Play non-aggressive games with your dog, such as fetch. Playing aggressive games like tug-of-war can encourage inappropriate behavior.

7. Never approach a strange dog and always avoid eye contact with a dog that appears threatening.