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Dog owners, here's what you need to know about liability insurance

Key Points
  • The average liability claim payout for a dog-related injury claim was $37,051 in 2017, according to data from the Insurance Information Institute and State Farm.
  • That's up 93.4 percent from 2003.
  • Owners should be aware of potential limitations and exclusions when reviewing or shopping for a homeowners or renters insurance policy.
Mark Horn | Getty Images

Natural disasters, theft and fire tend to be top of mind when it comes to assessing your homeowners and renters insurance, yet there's another risk that might be residing in your home: your dog.

"If you have a dog, and you own or you rent, you need to think about this," said Peter Kochenburger, deputy director of the Insurance Law Center at the University of Connecticut School of Law.

Liability claims for dog-related injuries have been ticking upward in recent years, with an estimated 18,522 incidents in 2017, according to data from the Insurance Information Institute and State Farm, promoted ahead of National Dog Bite Prevention Week in mid-April. That's up 9.5 percent from 2003.

Payouts for such claims have skyrocketed 93.4 percent over the same period, they found, from an average $19,162 apiece in 2003 to $37,051 in 2017.

Those higher costs stem from rising medical expenses and increased legal claims and judgments as states and municipalities weigh in with laws on owners' liability for injuries a pet causes, said Heather Paul, a dog bite prevention specialist with State Farm.

(See chart below for states where dog-injury claims are more prevalent.)

"There's a decent amount of uncertainty of what your liability might be," Kochenburger said. "It makes it more important that you clarify with your insurance company what coverage you have."

Although standard homeowners and renters insurance policies typically cover dog-bite liability, there are still some coverage ins and outs that dog owners should assess when shopping or reviewing a policy:

Bites aren't the sole concern

Dig into pet-related policy details even if your dog wouldn't hurt a flea. Bite claims may be the headliner, but they are just one kind of incident in a broader category.

"Technically, it's a 'dog-related injury' [claim]," said Paul — the same coverage restrictions or conditions would typically also apply if say, your friendly, energetic dog causes injury by knocking over an elderly house guest or startling a passing bicyclist.

Breed may matter

Some insurance companies have different policies for particular breeds. Pit bull terriers, Rottweilers and wolf hybrids are among those often cited on restricted or excluded lists, said Michael Barry, a vice president at the Insurance Information Institute.

"It's a very narrow number of breeds," he said, and typically based on the insurer's database of expensive claims, rather than a breed's reputation.

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Depending on the state and the insurer, owning a blacklisted breed could mean your application is denied. You could also be approved with a higher premium or restricted terms specifying that your dog is excluded from coverage or covered only up to a lower limit, said Kochenburger.

That varying treatment underscores the importance of shopping around for the most favorable terms. There are also some insurers — including State Farm — that don't have breed-specific policies.

"We do not care if you have a pit bull or a poodle," Paul said.

It benefits you to 'speak'

"A lot of home insurers are going to ask you that question in the initial policy application: Do you have a dog?" said Barry.

Answer any application questions about your pet, including breed and claims history, truthfully. Potential consequences of lying could mean the insurer later has cause to cancel your policy on grounds of material misrepresentation, Barry said, or if a loss occurs that's related to the lie, the insurer may not be required to pay that claim.

And if the insurer doesn't ask about pets?

Do tell the agent that you have a dog, he said. That's your opportunity to make sure you're covered and clarify terms.

It's safe to assume that the insurer will have access to details of any prior dog-injury claims, through third-party companies that compile and share data, said Kochenburger. (A dog with a bite history could be treated similarly to a blacklisted breed, with denied coverage, higher rates or other restrictions.)

So it can help to volunteer any changes, he said, such as if you no longer own that dog or have taken additional measures like training to avoid further incident.

In the same vein of disclosure, be sure to call your current insurer if you bring a new dog into the family, to head off any surprises on coverage.

Explore coverage options

Check to make sure you have enough coverage to handle a big liability judgment, Paul said.

As a first step, you might look into boosting the liability and medical payments portions of your policy. A analysis estimated that increasing liability coverage from $100,000 to $500,000 cost just 7 percent more per year — about $42 more for someone whose premium was $600 per year.

But keep in mind that raising those limits may not help, if your policy already stipulates lower limits for dog-related injuries, or excludes your pet from coverage entirely.

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Another option might be an umbrella policy, which covers claims that exceed your regular policy limits, Paul said. As with a regular homeowners or renters policy, make sure it applies to dog-related injury claims.

Owners of restricted breeds or a dog that has a history of aggression (meaning that pet likely is excluded from their standard homeowners or renters coverage) could also consider a dog liability insurance policy. Rates can vary by factors including the breed and size of your dog; ValuePenguin estimates the annual premium for $300,000 in coverage for a pit bull could run nearly $500, and a Rottweiler, almost $900.