Which type of homeowner’s insurance claim costs more on average?
A) Fire
B) Dog bite
C) Credit card theft
D) Hurricane
If you answered fire, you’re correct.
But dog bites, on average, aren’t far behind, and well ahead of the average hurricane claim, according to the Insurance Information Institute.
The average cost to settle a dog bite claim was $29,396, and there were an estimated 16,292 of those claims nationwide in 2011, according to the institute. Dog bites accounted for more than one-third of all homeowners insurance liability claim dollars paid out in 2011.
“The cost comes over someone suing someone over the bite. Whether the bite was damaging or not, there’s the pain and suffering and all that when it goes to court,” State Farm spokesman Gary Stephenson said.
Last year, Louisiana ranked 24th nationally in the number of dog bite claims for State Farm, with 55. State Farm paid out $1.3 million to settle those claims, or around $24,000 a claim.
From 2007 to 2011, State Farm had 246 dog bite claims in Louisiana and paid $5.9 million to cover them.
In East Baton Rouge Parish, there were 270 dog bites reported in 2011, according to the Animal Control and Rescue Center. Already, there were 155 dog bites reported during the first half of this year.
The average claim cost nationally, when adjusted for inflation, was 22 percent higher in 2011 than in 2003, according to the Insurance Information Institute.
Increased medical costs, bigger lawsuit settlements, judgments and jury awards also contributed to the increase in the cost of dog bite claims, according to the organization.
Each year, there are more than 4.5 million people bitten by dogs, according to the federal Center for Disease Control. About 850,000 of those, or 19 percent, result in the victims seeking medical attention.
Only a small portion of those bites result in an insurance claim, and an even smaller percentage result in a lawsuit.
Stephenson said most dog bite lawsuits are settled before going to trial.
There are good reasons for that.
A single lawsuit can end up costing hundreds of thousands of dollars in legal fees and lost wages, according to the Insurance Information Institute. That’s true even if the dog owner being sued wins.
Not surprisingly, the wealthier the dog owner is, the better the chances are that he or she will be sued, according to the institute. And the personal liability coverage in a standard homeowner’s policy — generally $100,000 to $300,000 — may not be enough to cover a court judgment.
The dog owner is responsible for all damages above that amount, including legal fees.
The Insurance Information Institute recommends homeowners consider purchasing “umbrella liability policies, which cover personal liabilities, such as dog bites. The coverage usually ranges from $1 million to $10 million.
Karen Bryant, owner of All Premiere Insurance Agency in Denham Springs, said a lot of independent insurance companies won’t insure a homeowner with vicious dogs or those with a history of biting.
“The reason, obviously, is because the dogs are biting children and causing damage,” Bryant said.
Children make up more than 60 percent of dog bite victims, according to the Insurance Information Institute.
Dog bite claims frequently include higher medical bills because nowadays, people want to take their child to a plastic surgeon, even for a nip on the hand, Bryant said.
Some insurance companies also refuse to sell coverage to homeowners who own breeds of dogs that are considered more aggressive, such as Doberman pinschers, pit bulls and Rottweilers, Bryant said.
Stephenson said State Farm does not require homeowners to pay more money if they have a dog, no matter the breed.
But if the dog has bitten someone, State Farm may not continue offering coverage to the homeowner, he said.
However, Donald Cleary, spokesman for the National Canine Research Council, said that stance doesn’t make sense.
“I’ve always said that dog bites can be insured at a profit,” Cleary said. After all, that’s what insurance companies do, Cleary said. The companies assess a risk and calculate how to cover it and make money.
Cleary said the insurance industry’s claims that there is some sort of dog-bite epidemic are overblown. “No. 1, 95 percent or 97 percent of all claims dollars are paid for property claims,” Cleary said. “The black hole in the insurance business is property damage.”
Dog bite claims account for a very small percentage of claims in an industry that generates more than $400 billion in earned premiums a year and averages double-digit profits, Cleary said.