Man's best friend is also a liability

By Barbara Marquand on May 30th, 2013

Of all the money home insurance companies paid out in 2012 for liability claims, more than a third of it was for dog bites, a new report from the Insurance Information Institute and State Farm says.

Dog bite liability claims cost more than $489 million last year, evidence that in some cases Fido's bite is every bit as bad as his bark.

The institute's analysis of home insurance data found that the number of dog-bite liability claims fell by 1.4 percent in 2012 from 2011. But the average cost to settle a claim rose by 1.2 percent year over year, continuing a long trend. Last year the average dog-bite liability claim cost $29,752 -- 55 percent more than the average cost per claim in 2003 of $19,162. Total dog-bite liability costs jumped 51 percent to $489.7 million in 2012 from $324.2 million in 2003.

If you have a dog, follow these tips to keep others safe and protect your financial interests:

  • Know your state's liability law. In about a third of states, owners are "strictly liable" for their dogs' behavior. In other states, they are liable only if they knew or should have known their dogs were dangerous. Some states have a "one-bite rule," which means you're not liable for the first time your dog bites someone.
  • Make sure you have enough liability coverage. A home or renters insurance policy typically covers dog bite liability, and most home insurers will cover dogs. Most policies provide $100,000 to $300,000 in protection. That sounds like a lot, but lawsuits can cost much more. You're on the hook for any expenses that exceed the liability limit. Consider purchasing additional liability coverage with an umbrella policy, which can provide anywhere from $1 million to $10 million in coverage. Most insurers require that you have at least $250,000 of liability coverage through your auto insurance and $300,000 through your home insurance to buy an umbrella policy.
  • Train and socialize your dog. Be a responsible pet owner, and enroll your dog in obedience training.
  • Adopt a suitable breed. Research dog breeds and choose one that's suitable for your household and neighborhood. Spend time with a dog before buying or adopting it.
  • Have your dog spayed or neutered.
  • Be careful with your dog around children, and don't let your dog run loose, no matter how friendly you think he is.

Some insurers limit or deny coverage for certain dog breeds, and many cities have banned certain breeds. But Pennsylvania and Michigan prohibit insurers from canceling or denying coverage to owners of particular dog breeds, and several states bar cities and counties from targeting breeds, the institute reports.

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