By Clark Sanchez | State Farm
Dog bite problems vary by state law and each insurance company. This article focuses on the state of Arizona and most insurance companies but from the viewpoint of the landlord for a rental property and may not apply to owner-occupied situations (i.e., Homeowner Policy).
In 29 states, when a dog bites someone—the law says the dog is automatically guilty and the dog’s owner is legally responsible. Arizona falls into one of those 29 states and ranked #10 last year in the USA for the total number of dog bite claims. This was a very surprising statistic considering all the nine states ahead of Arizona are high-population states like New York, California, Illinois, and Texas.
Last year dog bites cost the insurance industry nearly $900 million, with $21 million of that total being just for Arizona.
At times, a landlord or a property manager will tell a prospective tenant with a dog that they need to obtain a special “Pet Endorsement” or “Dog Bite Endorsement.” For most insurance companies, there is no such thing since dogs and pets of all types are automatically included on a renters’ insurance policy purchased by the tenant and a landlord rental property policy purchased by the rental house owner. Note that they are included as far as dog bite liability is concerned, however, no insurance policy covers property damage done by a pet to the building or property.
This means that damage from pet urine, chewing, scratching, and/or gnawing is not covered by any insurance policy. For example, a tenant had a talkative parrot that also liked to reach through his cage to gnaw on the wall and door molding. No coverage applies from either the tenant’s “renters’ policy” or from the property owner’s “landlord’s policy.”
Previously, many insurance companies maintained a list of high-risk or problem dog breeds but have stopped using them due to lawsuits and better consumer relations. At the same time, they may not issue a policy if a specific dog has been involved in a dog bite claim before.
Additionally, the property owner or property manager may require tenants to purchase “renter” insurance and specify the minimum liability limit for that policy. Some minimums can range from $300,000 to $500,000. The cost to move up to $500,000 from $300,000 can be as little as “…less than one dollar a month.”
As a result, your first line of defense is to require that your tenant carry renters’ insurance. Be sure that you are included in “Section II” (Liability) of the policy with your name and mailing address so that the insurance company can notify you if your tenant drops the policy or fails to pay the renewal. Your second line of defense is your landlord’s rental property policy. Liability limits should be at least $1 million not counting any additional “umbrella” coverage. In the event of a bite claim, you as the landlord or property manager will almost always be named in the lawsuit. You may not be the dog owner, but you ‘approved’ the dog by allowing him to be there and are probably perceived as the person with the ‘deepest pockets.’
When there is a dog bite claim, the insurance company will take one of the following actions for both you as the property owner and also for your tenant: (1) charge a higher premium to continue the insurance, (2) place an ‘exclusion rider’ on the policy saying that there is no longer any coverage for the animal that was involved in the bite claim, or (3) require that the dog be removed or the policy will be non-renewed. As a dog lover and owner of 3 dogs, I am sorry to say that option #3 is the most frequent action taken.
* * * * * *CLARK SANCHEZ has been an Arizona insurance agent for over 42 years and a Vendor-Affiliate with AZREIA for over 20 years. You can contact Clark if you have any insurance-related questions at firstname.lastname@example.org or (602) 803-2179.