by: Burns & Wilcox
Dog Bites Are Increasingly Painful In Owners' Pocketbooks
While the number of dog bite claims has dipped, the cost of dog bite claims has been growing significantly, new data from the Insurance Information Institute shows. Last year, the number of claims decreased 2.2%, but claim costs grew 32%to a per-claim average of $64,555, Property Casualty 360 recently reported. These claims totaled $1.3 billion in 2022, representing a 28% increase from 2021, the publication noted.
States with the most dog bite claims in 2022 included Florida, with 1,331 claims and a per-claim average
of $78,203, and California, which saw 1,954 claims last year at an average of $78,818 each, according to the association.
With more than 65 million U.S. households owning a dog as of 2023, the new claims data "is not surprising at all for numerous reasons," said Chanon Murphy, Manager, Personal Insurance, Burns & Wilcox, Houston, Texas.
Costs are rising across the board, higher-risk dog breeds remain popular, and "America is a very litigious country," she said. However, contrary to common belief, dog bite coverage under Homeowners Insurance is not a given.
"Homeowners assume dog bites are automatically covered; this is simply untrue," Murphy said. In fact. dog owners should confirm the coverage details of their Homeowners policy and seek additional coverage if needed. This is particularly true for dog owners who take their canine friends with them on trips, to the store, and anywhere around town.
"The more and more we incorporate dogs into our daily lives - going to restaurants, breweries, and sports games even - they are just everywhere," Murphy said. "With the potential of needing plastic surgery and ongoing medical care, especially if there is nerve damage, these can turn into chronic issues and that is why you see an average dog bite claim of over $60,000."
Dog bite exclusions increasingly common as claim costs rise
According to the American Veterinary Medical Association, over 4.5 million individuals in the U.S. suffer a dog bite each year - at least half of whom are children - and more than 800,000 seek medical attention for a dog bite.
When a homeowner's dog bites a guest or other third party - whether the bite occurs in the home or while the dog is outside, being taken for a walk, or elsewhere - the homeowner is likely to face a claim, Murphy said. Homeowners Insurance could cover the injured individual's medical costs, pain and suffering, loss of income if they are unable to work due to the bite, and more.
"A dog bite, regardless of who is injured, will most likely result in medical payout on Homeowners Insurance coverage, [and will often] escalate to a lawsuit." she said. With rising defense costs and other expenses, "before a lawsuit is even decided, there are already thousands of dollars spent."
Homeowners can also be sued when their dog attacks another individual's pet, Murphy added. "It is important to understand that we are not just seeing dog-to-human bites. There are also dog-on-dog bites that are a factor now," she said.
According to the Insurance Information lnstitute's recent report, U.S. dog bite claims increased in number by 1.4% between 2013 to 2022, while the value of claims rose 134.9%. The 2.2% decrease in dog-bite claims between 2021 and 2022 is a good sign that awareness of the risk is growing, says Michelle Allemang, Manager, Personal Insurance, Canada, Burns & Wilcox. She can point to insurance brokers and homeowners placing more emphasis on education and risk mitigation. However, homeowners should be aware that some insurance carriers will have dog-bite or animal liability exclusions on their policies.
"The majority of homeowners will have coverage that includes animal liability; however, if an incident does occur, they could be non-renewed or canceled and then need to be placed in the surplus lines market where animal liability will most likely be excluded if you had prior loss," Allemang explained.
"It is really important to have a conversation with your insurance broker because even some standard policy forms exclude certain breeds of animals, like pit bulls or rottweilers. Breed exclusions are increasingly common."
As per-claim costs increase, these exclusions are becoming more common, Murphy said. "We have seen a rise in carriers using an animal exclusion or limiting liability for animals," she said. If a homeowner is sued over a dog bite and finds out their policy excludes animal liability, "they could have to pay out of pocket for a lawsuit. which could definitely have a serious financial impact."
Business owners should review insurance before welcoming pets
From restaurants to retail stores, more businesses seem to be allowing dogs, Murphy said. This includes many shopping malls that have adopted pet-friendly policies to encourage more foot traffic, the Wall Street Journal reported in December 2022, detailing issues from fur on clothing to dog bites and scratches that some have experienced.
"The most common types of commercial claims are slip-and-fall claims, but dog bites are right up there with them. They are becoming more common," Murphy said. "The dollars being paid out are increasing and insurance carriers are more likely to start looking at their forms and want to cut back on their exposure."
Home-based businesses may be subject to animal liability exclusions, Allemang pointed out. "When individuals
are starting to have clients come to their homes, that is definitely more risk exposure and it might lead to a carrier excluding this coverage," she said, noting that standalone insurance policies may be available for those who are unable to find dog-related coverage. "It is key to speak with your insurance broker and to read your policy. It will typically be very clear under the liability portion of your policy what is excluded."
Even 'the friendliest dog' could cause injuries
The cost of a dog bite claim can vary widely, depending on the circumstances of the incident. In August of 2022, a woman in Rahway, New Jersey, was awarded a $1 million settlement after being bit by a neighbor's dog and dragged down her porch steps and driveway; she required 11 surgeries after the 2020 attack and lost the use of her right hand, the Union News Daily reported.
According to the U.S. Centers for Disease Control and Prevention, most dog bites affecting young kids occur during "everyday activities with familiar dogs." Even "the friendliest dog" can bite if provoked, Murphy said, and in some cases the dog is merely defending itself. "Sometimes it is really not the dog's fault." she said. Still, "once there is a dog bite claim, the insurance carrier will likely exclude animal liability altogether or some carriers will not write the homeowner at all."
Given the potential for large settlements, Personal Umbrella Insurance could be beneficial for homeowners with pets. Like Excess Liability Insurance for business owners, these policies can provide liability limits above and beyond standard policies.
"Especially in the U.S., where the initial liability limits for Homeowners Insurance are usually quite a bit lower - often
$500,000 vs. $1 million or $2 million in Canada - Personal Umbrella Insurance is definitely important to consider," Allemang said.
However, these policies would only provide coverage for dog bite claims if the underlying Homeowners Insurance or CGL Insurance policy also covers dog bites, Murphy noted. "If your policy excludes coverage, so will an umbrella policy," she said. "This is why it is so important to understand your insurance coverage."
Steps to prevent dog bites include knowing a dog's history and monitoring interactions with pets closely. "Policyholders need to provide proper training for their dogs and recognize the signs of aggressive behavior," Murphy said.
When it comes to liability, "typically it goes back to the owner of the dog," even if a stranger approaches the animal without permission, Allemang said. "Maintaining as much control of the situation as possible is really important." she said. "Individuals sometimes think if someone comes up to their dog and pets them without asking then it is their fault. but in many instances, that is not the case."