COVERAGE

Dog Bite Liability

THE TOPIC

AUGUST 2008

In 2007 dog bites cost insurers $356.2 million, up 10.5 percent from the previous year. The average cost of dog bite claims increased by 11.5 percent to $24,511 during the same period. The number of claims paid by insurers has remained relatively stable over the past three years at 14,295 in 2005, 14,661 in 2006 and 14,531 in 2007. Liability claims, including dog bite claims, accounted for about 5 percent of all homeowners insurance losses in 2006 (latest data available).

According to the Centers for Disease Control and Prevention, more than 4.7 million people are bitten by dogs annually, resulting in an estimated 800,000 injuries that require medical attention. With over 50 percent of the bites occurring on the dog owner’s property, the issue is a major source of concern for insurers.

Over the years, many states have passed laws with stiff penalties for owners of dogs that cause serious injuries or deaths. In about one-third of states, owners are "strictly liable" for their dogs' behavior, while in the rest of the country they are liable only if they knew or should have known their dogs had a propensity to bite (known as the "one free bite" principle).

RECENT DEVELOPMENTS

State Legislation and Court Decisions: Dog owners in 33 states and the District of Columbia are currently legally liable for deaths or injuries caused by their dogs. Two states, Pennsylvania and Michigan, have laws that prohibit insurers from canceling or denying coverage to the owners of particular dog breeds. According to the American Kennel Club, several states—including Illinois, Louisiana, New Jersey, New York, South Carolina, Vermont and Washington—have similar bills pending. The American Kennel Club also reports that over the last two years nearly 100 municipalities have enacted bans on specific breeds. Several states, however,—including California, Colorado, Florida, Illinois, Maine, Minnesota, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, Texas and Virginia—have laws barring municipalities and counties from targeting individual breeds.

In August 2008 a Minnesota law increasing the surety bond and liability limits that owners of dangerous dogs must possess became effective. The law also defines the term "dangerous dog."

Insurers generally oppose legislation that would require changes to their dog breed practices. They contend that government public health studies and the industry’s claims histories show that some breeds are more dangerous than others and are higher loss risks.

BACKGROUND

Landmark Case: On January 26, 2001, two Presa Canario dogs attacked and killed Diane Whipple in the doorway of her San Francisco, California, apartment. The owner of the dogs, Marjorie Knoller, a San Francisco lawyer, was convicted of involuntary manslaughter and keeping a mischievous dog that killed a person—she was sentenced to four years in prison for involuntary manslaughter and was ordered to pay $6,800 in restitution. Her husband, Robert Noel, was convicted of two lesser charges but also received a four year prison sentence. Knoller became the first Californian convicted of murder for a dog’s actions. This was only the third time such charges have been upheld in the United States, the first coming in Kansas in 1997.

Insurers are Limiting their Exposure: Homeowners and renters insurance policies typically cover dog bite liability. Most policies provide $100,000 to $300,000 in liability coverage. If the claim exceeds the limit, the dog owner is responsible for all damages above that amount, including legal expenses. Most insurance companies insure homeowners with dogs. However, once a dog has bitten someone, it poses an increased risk. In that instance, the insurance company may suggest that the homeowner find the dog a new home, or may charge a higher premium, nonrenew the homeowner’s insurance policy, or exclude the dog from coverage.

Many insurers are taking steps to limit their exposure to such losses. Some companies require dog owners to sign liability waivers for dog bites, while others charge more for owners of biting breeds such as pit bulls and Rottweilers and others are not offering insurance to dog owners at all. Some will cover a pet if the owner takes the dog to classes aimed at modifying its behavior or if the dog is restrained with a muzzle, chain or cage. It is unlikely that insurers will begin offering specialty insurance policies just for dog bites since the cost of such policies would be prohibitive.

Dog Owners’ Liability: Dog owners are liable for injuries their pets cause if the owner knew the dog had a tendency to cause that kind of injury; if a state statute makes the owner liable, whether or not the owner knew the dog had a tendency to cause that kind of injury; or if the injury was caused by unreasonably carelessness on the part of the owner.

There are three kinds of law that impose liability on owners:

A dog-bite statute: where the dog owner is automatically liable for any injury or property damage the dog causes without provocation.
The one-bite rule: where the dog owner is responsible for an injury caused by a dog if the owner knew the dog was likely to cause that type of injury—in this case, the victim must prove the owner knew the dog was dangerous.
Negligence laws: where the dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.

In most states, dog owners aren't liable to trespassers who are injured by a dog. A dog owner who is legally responsible for an injury to a person or property may be responsible for reimbursing the injured person for medical bills, time off work, pain and suffering and property damage.