Your Money: Get insurance for your dog's bite, as well as its bark

[April 11, 2018]   By Beth Pinsker

NEW YORK (Reuters) - A cute Maltipoo puppy could never harm anyone, right?

But looks can be deceiving. Dogs of any size or breed could inflict serious damage, leading to large insurance claims.

Over the past 14 years, canine-related injuries - from bites to accidents caused by dog frights - have caused claims to jump 90 percent, according to an annual survey by the Insurance Information Institute (III) and State Farm, the largest U.S. home insurer. Each claim averages $37,051, up from $19,162 in 2003.

Dog bites fall under the liability section of homeowners or renters insurance policies, which typically provide about $100,000 in coverage.

But only about 37 percent of tenants take out a renters insurance policy, which costs about $20 per month. Many more incidents go unreported to insurance companies.

Inadequate coverage can invite lawsuits. Attorneys like Ken Phillips, who specializes in dog-related cases, runs a website for plaintiffs and other lawyers (http://dogbitelaw.com). He also sues landlords for tenants without renters insurance.

COSTS OF CARE

Even a simple scare injury can rack up big charges.

State Farm public affairs specialist Heather Paul's dog ran out through her open gate and scared an elderly neighbor, who fell off the curb and broke her ankle. The lady filed an insurance claim with Paul's carrier, but the standard liability coverage of $100,000 was not enough for her bone reconstruction.

Luckily, Paul had an additional umbrella policy, which kicked in and covered the rest.

Janet Ruiz, the California representative for the III trade group, estimated that 50 to 75 percent of people have umbrella policies, with coverage of $1 million to over $10 million including auto accident liability. High-net worth families favor such policies, with up to 79 percent reporting they had coverage in a 2012, according to the latest white paper on the matter from insurer ACE Private Risk Services.

Two dogs play in a park in Milan, Italy, December 3, 2017. REUTERS/Stefano Rellandini

Umbrella insurance usually costs less than $50 a month and can be as little as $15, depending on your coverage.

When a dog owner has insurance, especially an umbrella policy, an injured client tends to settle for the amount covered, Phillips said.

Cases can end up in court when a bigger payout is demanded. Some may involve death, severe mauling and loss of body parts.

A California woman went through a two-year lawsuit after her dog got loose and knocked over a postal worker. The dog did not bite anyone, but the worker claimed damages greater than the homeowner's policy covered.

The dog owner, whose pet's mugshot has been posted on a website, fears that neighbors might target her for more lawsuits if she is identified. And if the pup gets in any more trouble, it could be seized and possibly euthanized.

This owner said she had no umbrella policy, and now she cannot get one. Her homeowner's premium has skyrocketed.

The dog is not insurable for any future liability incidents, so she took out an outside policy to cover the dog, which cost $1,500 a year - more than her homeowners and earthquake insurance.

"We can be the most responsible dog owners, but accidents happen," said Paul. "You just never know."

(Editing by Lauren Young and Richard Chang)

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