Dogs provide millions of people with companionship, happiness and health benefits. But even dogs that are normally docile may bite when they are frightened or when defending their puppies, owners or food.
To educate pet owners about how to prevent dog bites The American Veterinary Medical Association (AVMA), the Insurance Information Institute, State Farm®, and others have joined together for National Dog Bite Prevention Week (April 7 -13).
Homeowners insurers paid out $675 million in liability claims related to dog bites and other dog-related injuries in 2018, according to the Insurance Information Institute (I.I.I.) and State Farm®, the largest writer of homeowners insurance in the United States.
California had the largest number of claims in 2018 followed by Florida. California also had the highest average cost per claim at $45,543.
By Lynne McChristian, I.I.I. Non-resident Scholar and Media Spokesperson
Ah, spring! The season of renewal, of fresh beginnings, of flowers in bloom – and of fresh batteries in the smoke alarm. Yes, you probably overlooked that last item, so here’s a reminder to put it on the spring to-do list.
Checking (and changing) the batteries in the smoke alarm is a good springtime habit. Most homes have a smoke alarm, but if you don’t check it with regularity, you can’t be sure it’s working. It is one of those out-of-sight, out-of-mind things, so here’s a reminder to put your home or business smoke alarm top of mind.
According to the National Fire Protection Association (NFPA), almost three of every five home fire deaths resulted from fires in homes with no smoke alarms or in homes where the smoke alarm was not working. NFPA also points to missing or disconnected batteries as the reason for inoperable smoke alarms. Dead batteries cause 25 percent of smoke alarm failures.
That chirping sound you hear at night? It’s not the first robin of spring. It’s the smoke alarm battery alerting you that it’s time for a change. And, if your smoke alarm is more than 10 years old, replace the entire alarm. It’s inexpensive protection that is worth every cent.
Most insurance companies offer discounts for smoke alarms, particularly monitored systems. After you check the batteries and/or upgrade your smoke alarm, check with your insurer on any possible discount. It might be a small amount, but the alarm itself is big protection – for every season.
It’s hard to imagine pitchers and catchers reporting in a mere 12 days while another polar vortex rips through the Midwest. Arctic blasts plunging the thermometer to 27 degrees below zero in some states? It’s safe to say our friends in Minnesota won’t be throwing the baseball around in the backyard this week.
But a baseball-less future is probably the least of your worries right now. Extreme cold is dangerous – and expensive, if the pipes in your house freeze and burst. Water damage could cost you as much as $5,000, if not more.
Prep your pipes to prevent freezing
There’s a lot you can do to prep for the worst. Consumer Reportshas tips for keeping pipes unfrozen and how to thaw them out if they do freeze.
The I.I.I. also provides a checklist and a survival guide for winter weather prepping your home.
How does insurance handle burst pipes?
But if the worst does happen, your homeowners insurance will probably offer some coverage. Damage from burst frozen pipes is usually covered – as long as you’ve taken reasonable steps to prevent the freezing in the first place. Stay warm out there!
You may have read the recent story featured in the I.I.I. Daily about raccoon damage and homeowners insurance. The gist: raccoons got into a house and caused $80,000 worth of damage. The homeowners were surprised to learn that their insurance wouldn’t cover any of it.
So what’s the deal with animal damage and insurance?
Let’s start with the easy stuff. If your dog Fido rips through your couch or pees all over the wall, you’re out of luck. Standard homeowners policies won’t cover any damage to your house or personal property caused by a pet. And”pet” is a pretty broad term. Doesn’t matter if it’s a Shih Tzu or a Clydesdale horse, pets are any animal you own.
What about animals that aren’t pets, like deer or birds or – God forbid – rats? That’s where things get interesting.
Building damage: You probably aren’t covered for any damage to the building caused by birds, rodents, insects, or vermin. There also probably won’t be coverage for any nesting or infestation. Insurance policies can vary widely, however, so make sure you ask your agent what is and isn’t considered a rodent or vermin (some insurers will say raccoons are vermin, some will say they’re not). The specific details of your policy will determine your coverage.
Damage to the building from other wild animals could be covered, though. If a moose runs through the sliding door to your deck, the damaged door would be covered.
Personal property damage: Unfortunately, your personal property is probably not covered no matter what kind of animal does the damaging. If a moose runs through your sliding door and wreaks havoc on grandma’s china, then you’re covered for damage to the door, but not the china.
Liability: You go to your friend’s house and bring Fido for a dog playdate. Fido then rips through your friend’s couch. Are you covered? Yes. Homeowners liability protection will cover the damage to other people’s property caused by your pets. Just not your property. Friendship saved.
A squirrel chews through the wiring in your car. Fido dents your door chasing after a squirrel. A moose rams your car in a fit of rage, smashing the windshield. (Why do I keep thinking of moose scenarios?)
Does personal auto insurance cover animal damage? Yes, if you have optional comprehensive coverage. If you only have collision coverage, then you’re not covered.
Collision only covers damage when a car overturns or hits another car or object. Comprehensive covers…more or less everything else: damage from falling objects, fire, explosions – and birds and animals.
So if you paid the extra premium for comprehensive coverage (like most Americans do), then you’re covered for damage from chewing squirrels, incautious Fidos, and rampaging moose (meese?).
On December 11, 2018 the Insurance Information Institute (I.I.I.) published a report documenting Florida’s assignment of benefits crisis – what the crisis is, how it’s spreading and how it’s costing Florida consumers billions of dollars.
You can download and read the full report, “Florida’s assignment of benefits crisis: runaway litigation is spreading, and consumers are paying the price,” here.
Today we also published PowerPoint slides accompanying the report. We hope the slides will help illustrate the depth and breadth of the abuse. You can download the slides via this link.
An assignment of benefits (AOB) is a contract that allows a third party – a contractor, a medical provider, an auto repair shop – to bill an insurance company directly for repairs or other services done for the policyholder.
The process is innocuous and common throughout the country. But as our report notes, Florida’s unique legal systems richly rewards plaintiff’s attorneys and vendors when they submit inflated bills to insurance companies and then file lawsuits when those bills are disputed.
Not just a few lawsuits. Lots of lawsuits. The numbers are staggering. There were roughly 1,300 AOB lawsuits statewide in 2000. There were more than 79,000 in 2013, and nearly 135,000 through November 9, 2018, a 70 percent increase in just five years.
Inflated claims and massive volumes of lawsuits have the predictable result of driving up insurance companies’ legal costs. Insurers are forced to then pass those costs on to consumers. In the study, we estimate that Florida’s auto and homeowners policyholders have paid about $2.5 billion more for insurance over the past dozen years to cover the increase in legal costs.
That doesn’t even count the billions more in excess claim settlements that are at the heart of the problem.
Many of these inflated bills and lawsuits are driven by a select number of contractors and their attorneys. Florida insurance customers can protect themselves – and their fellow citizens – by being very cautious when signing away their benefits under an AOB.
Pop quiz: what’s one of the most common types of homeowners insurance claims? (Hint: it’s not fire.)
It’s water damage. Maybe that’s not surprising – it rains a lot in many places. But what may surprise you is that things like pipe bursts and broken appliances are increasingly the main causes of water damage in homes.
In insurance-speak, these are called “non-weather water damage claims.” Worryingly, these claims are happening more often and are getting a lot more expensive. A Best’s Review article reports that the average homeowners water damage claim is now over $6,700. Large losses (over $500,000) have doubled in number over the past three years. Non-weather water damage is now costing insurers (and their policyholders) billions in losses every year.
This is happening for several reasons. Our housing stock is aging, as is our infrastructure. More houses are being built and they’re getting bigger – many houses now have extra bathrooms and second-floor laundry rooms, which means more piping. (The story is probably different in Florida. You can read why that is here.)
But the worst part is that many – if not most – water damage claims are preventable. Inspecting pipes or conducting routine maintenance can go a long way. That’s where the internet of things (IoT) comes in. Smart devices and connected sensors installed on piping can detect leaks before they occur or before they cause too much damage. They’re basically smoke detectors, but for water.
And they work. Best’sReview noted that installing IoT devices can reduce water lossesby up to 93 percent.
The Review quoted an IoT company CEO who claimed that leak detection devices could save insurers and their customers $10 billion every year.
Homeowners have admittedly been slow to install IoT to help detect leaks. But insurers are hopeful that raising awareness about the issue, offering policyholder incentives like premium discounts, and encouraging IoT installation during home construction will begin to turn the tide.
Update: Of interest, Washington state adopted a rule in 2018 that specifically mentions water monitors and water shut-off systems as permissible tools for an insurer’s risk reduction program.
