The Dog Bit My Wallet

According to the
American Pet Products Association, there are a little over 78 million dogs in
the United States, one dog for every four people.  Estimates for the state of Washington suggest
that we have about 1.5 million dogs and our 2011 human population was about 6.8
million so we are right in the neighborhood of the rest of the country. Here on
the Olympic Peninsula in Washington, on a nice summer’s day at one of our
farmers markets the proportion may seem higher.

We love our
pooches here – big ones, small ones, purebreds or pound puppies -and we take
care of them. It may be a little disconcerting to learn that Rover can turn
around and bite you in your wallet. First, of course, Rover and his millions of
buddies will have bitten someone else.

Not your Rover,
but somebody’s Rover has bitten enough people to make dog bites account for
more than a third of homeowners insurance liability claims paid in 2011. The
total tab for these claims came to almost $479 million and that is a large
enough amount to get the attention of an insurance underwriter. In fact, the
average cost of dog bite claim rose 50% between 2004 and 2011 from about
$19,000 to a bit over $29,000.  The
reason for the rise in claims costs appear to relate to higher costs for
treatment as well as larger settlements. Kids are disproportionately
represented in dog bite claims and it appears plastic surgery is a frequent
component of medical care for dog bite injuries.

State Farm has
published its 2011 claims data for dog bites that allows us to look at
Washington homeowners insurance data specifically. Their 2011 experience
included 47 claims in Washington State costing $1,743,142, an average of almost
exactly $37,000 per claim.

With numbers of
this magnitude it should come as no surprise that underwriters of homeowners
and renters liability policies would take a strong interest in Rover’s
behavior.  Homeowners and renters
policies generally include dog bite liability in their home insurance rates
when the dog is included at the time you purchase your policy. If your dog is
not declared on your policy and there is an incident, your insurer could take
several actions up to denying the claim. 
When you do declare your pooch, since the underwriters don’t know your
Rover, they have to rely on their assessment of risk by breed.  While each company has its own underwritingrules and breed assessments, some breeds commonly considered at higher risk
include Doberman, Rottweiler, Pit Bull, German Shepherd, Akita and Presa Canario.  University of Washington fans will be
distressed to learn the Siberian Husky is also put in the high-risk category.

Ownership of any
of these high risk dogs may affect your insurance premiums and could actually
prevent being issued a policy at all through some companies. In addition, if
there is a dog bite incident reported on your insurance policy it may become
more expensive, harder, or impossible, to renew.

While the absolute
number of dog bite incidents may not seem large, their high and continually
escalating costs create a problem for insurers. This is truly a case of “once
bitten, twice shy.”

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