Will your insurance pay out for pet damage?

Chris Kissell

Americans love their pets. In fact, 68 percent of U.S. households own a pet, according to the most recent figures from the American Pet Products Association APPA).

But a pet can become a danger to your finances if you don’t have the proper insurance, especially if the pet attacks someone, says Michael Barry, spokesman for the Insurance Information Institute III).

“The biggest risks homeowners face is that they will be held liable not only for medical expenses caused by their pet, but they may also be sued,” he says.

Pet owners generally bear the responsibility for the damages their pets cause. This is especially true for dogs, which are the most popular pets, with 56.7 million households owning at least one, APPA says.

In one-third of states, owners strictly are liable for any damages caused by their dogs, according to III.

In other states, owners are liable when they knew or should have known their dogs were at risk of biting people. This is known as the “one free bite” principle.

Insurers often use this principle when deciding whether to continue to cover your dog, Barry says.

“If your dog bites someone, the company will pay for the occurrence, but will then either cancel the insurance or exclude the dog from the policy,” he says.

Dog bite claims totaled $489 million in 2012, according to the Insurance Information Institute and State Farm. Paid claims that year averaged nearly $30,000 per claim with the average claim cost jumping 55 percent between 2003 and 2012.

Is pet damage covered by home insurance?

Most homeowners insurance policies provide liability coverage that starts at $100,000. However, if you have a dog, agents usually recommend you purchase at least $300,000 in protection.

If your pet severely injures – or even kills – someone, you could be sued for well over $100,000, and possibly $1 million or more.

If your pet hurts someone and your insurance doesn’t fully cover the claim, you could be responsible for paying for many of the injured party’s related expenses, including:

• Medical bills.
• Time off work.
• Pain and suffering.

In most states, you won’t be liable if your pet injures or damages the property of trespassers, according to III.

Even if you have good homeowners insurance, your claim may not be covered. For example, damage caused by exotic pets often is excluded. One insurer with this policy, Liberty Mutual, “doesn’t provide coverage to customers who own or provide boarding to any animals that aren’t typically sold in a retail pet store,” says Glenn Greenberg, a company spokesman.

Also, damage to your own property generally won’t be covered by insurance companies.

“The typical policy excludes damage to the dwelling, other structures or contents when the cause of loss is an animal, bird, vermin, rodent or insect that is owned or kept by the policyholder,” says Lisa Lobo, vice president of consumer markets at The Hartford.

Barry says The Hartford’s policy is typical of most insurers, who will not cover damage to your own items caused by your pet.

“If your dog chews up an expensive carpet of your neighbor’s, however, there would be coverage,” he adds.

Your dog and insurance coverage

Because dog bite claims are so common – and can be so expensive — an insurer may refuse to cover your dog if it has a history of biting or other aggressive behavior.

“The most dangerous dogs are those that fall victim to human shortcomings, such as poor training, irresponsible ownership and breeding practices that foster viciousness,” Barry says.

Some insurers may take this one step further and single out entire breeds, he says.
“Some companies who have had large losses from certain breeds will not insure them,” Barry says.

For example, Liberty Mutual takes a closer look at homeowners who own dogs of certain breeds, Greenberg says. Those breeds include:

• Akita
• Alaskan Malamute
• Chow
• Doberman Pinscher
• German Shepherd
• Pit Bull Terrier
• Rottweiler
• Siberian Husky
• Presa canario canary)

If a homeowner has a dog of a named breed, Liberty Mutual will look at many factors in determining whether or not to offer homeowners insurance to the customer.

The company will consider things such as the temperament of the dog, any prior losses associated with the dog, and whether or not the dog has had all its vaccinations.

“If the risk is determined to be unacceptable, then we won’t offer a policy,” Greenberg says.

Can you get home insurance coverage for your pet?

Some states may offer you protections that ensure your pet’s damages will be covered.

For example, two states — Pennsylvania and Michigan — prohibit insurers from canceling or denying coverage to the owners of particular dog breeds, according to III.

Some insurers also will make exceptions to company rules and insure dogs in certain unusual circumstances.

“We give special consideration to applicants when the dog is providing assistance to the blind or visually impaired,” Greenberg says.

A standalone liability policy may be available to cover such dogs. However, policies typically require you to meet certain requirements, such as installing fences or cages, according to III.

In some cases, it may be extremely difficult to get coverage for your pet, Barry says, especially if it has a history of aggressive behavior. Many insurers exclude the pet from coverage, while others hike the premium cost to insure the pet.

“Some companies will require dog owners to sign liability waivers for dog bites,” he says. “Some will cover a pet if the owner takes the dog to classes aimed at modifying its behavior.”

The terms of the insurance policy will determine whether the insurer covers damages caused by other types of pets. For instance, some insurers may cover damages caused by cats and birds, while others won’t, Barry says.

If you have substantial assets may want to purchase an umbrella liability insurance policy, which can expand your liability coverage to $1 million or more.

“It protects you against personal liabilities—such as dog bites—that could impact a substantial portion of your assets,” Barry says.

Before purchasing such a policy, make sure it covers injuries and damages inflicted by pets, Barry says.

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