Credit: Shutterstock photoDog bites and other dog-related homeowners insurance liability claims were down 7.2% in 2015 but the cost for each claim continues to climb.
The average claim paid out for dog bites nationwide was $37,214 in 2015, up 16% from $32,072 in 2014, according to data collected by State Farm and the Insurance Information Institute . It’s the steepest year-over-year increase in more than 10 years and since 2003, the average cost per dog bite claim has nearly doubled, at 94%.
The upward trend in the average cost per claim was attributed to multiple things by the Insurance Information Institute, which published the most recent data this month.
Settlements and awards to plaintiffs injured by dogs are closely tied to medical costs, which have risen significantly in the U.S. in recent years. The National Health Expenditure per capita in the U.S. was $6,099 in 2003, according to the Centers for Medicare and Medicaid Services (CMS). In 2014, the per capita was $9,523.
To mitigate the risk of a dog injuring someone, some municipalities and counties across the country prohibit certain dog breeds as pets. Akitas, Doberman Pinschers, German Shepherds, Pit Bulls, Rottweilers and Siberian Huskies are some breeds that commonly excluded from homeowners insurance policies.
In cases when certain breeds are not banned, insurance companies might insist a dog owner waive dog bites from their homeowners insurance coverage to insulate from losses.
Some states have passed legislation to regulate insurance practices related to certain breeds. In at least Pennsylvania and Michigan, according to the Insurance Information Institute, state law prohibit insurers from canceling or denying homeowners insurance policies if they have specific dog breeds. On the other hand, the state of Ohio mandates that owners of dogs that have been classified as vicious are required to purchase an additional $100,000 or more of liability coverage.
However, any dog can cause an injury (unintentionally or not) that results in a liability claim. About 4.5 million people are bitten by dogs each and more than 885,000 require medical attention – half of which are children.
While the cost per claim nationally has been steadily rising, the picture changes depending on the state. California had by far the highest number of claims in 2015, with 1,685 that totaled $75.8 million in claims. The state with the second highest number of claims was Illinois, with 931 that amounted to $31.1 million in claims.
The average cost per claim nationwide in 2015 is similar compared to most state averages, with the exception of Arizona. The average cost per claim in Arizona was $56,654. Out of the ten states with the most number of bites, the next most expensive state was California, where the average cost per claim was $44,933.
Pet insurance policies do not include liability coverage. They are designed to offset medical expenses of animals.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
