If you can't live without your dog, it's time to consider whether you can't live without extra insurance, too. The same goes for other pets, although it's dogs that comprise the focus of home and auto policies.
We know it's tempting to dismiss the subject of insurance. My dog isn't going to hurt anyone, we think. I'm not going to have an accident with pets in the car. I'll pay with credit in the unlikely event of a veterinary emergency.
All understandable --- if not wishful -- thinking. Until something happens.
In New York state, a mail carrier sued the owner of a golden retriever that ran from the yard to greet her. The mail carrier, apparently stricken with fear, took off in flight and injured herself trying to jump through a car window. Ultimately, the carrier lost that suit, a judge citing the dog's lack of aggression, but not before costing the dog's owner the stress and cost of a trial.
In another case, in California, an owner was held responsible after its dog wandered into the street, causing a pickup truck to crash. Two men were thrown from the back end and suffered serious, permanent injuries. A judge ordered the dog owner's homeowner's insurance to pay $2.6 million in damages.
"A good proposition to keep in mind is that owners certainly could be found financially and legally liable for whatever kind of damage their dog causes. You don't know, but there's always that possibility," says lawyer Mary Randolph, author of "Every Dog's Legal Guide."
The best course is prevention, Randolph says: "Don't worry so much about the outcome of a lawsuit; just try to avoid the problem in the first place."
But there's no eliminating risk. A pet will sneak out. A frightened animal will bite. Even a cat in a car carrier can distract a driver. Dogs are hurt in cars and flee accident scenes. And, although we don't like to think about it, our pets get sick and injured. For all these events, we as owners are responsible.
Even as the economic downturn slowed the growth of pet health insurance plans, the industry still maintained a 7 to 10 percent annual growth, according to the North American Pet Health Insurance Association. Such a clip well outpaces other types of insurance.
Insurers are folding pet coverage into auto insurance policies. Meanwhile, homeowner's insurance companies are writing policies to try and reduce pet-related costs.
It can be baffling for the consumer. But here's a primer on the big three categories of insurance that pertain to pets -- home, auto, pet -- to get you started, whether you've just adopted a new kitten or are padding the pillows for an old dog.
Homeowner's insurance: covered except . . .
In addition to covering your home and belongings from storms and theft, homeowners insurance also covers off-site damage caused by family members that live with you, including your pet. Renters insurance provides the same type of coverage.
That means if your cat scratches a child down the street, homeowners insurance can pay the child's medical bills. If your dog chews a friend's living-room rug, your insurance can replace it. Good relations are maintained.
But -- and "but" is the crucial word in insurance -- there are exceptions, things your insurance won't cover, or will provide less money for. These are tucked inside the policy under "exclusions" and "limits," respectively.
"If you own a dog, you must read the personal liability section and you must look at the exclusions; those are two different sections," says Kenneth M. Phillips, a California lawyer who specializes in dog-bite cases. "It is becoming more and more of an occurrence for insurance companies to exclude coverage for injuries caused by an animal."
Check under "exclusions" for breeds the insurer either won't cover, or requires individual approval to cover due to a propensity for aggression. These may include pit bulls, Rottweilers, German Shepherds, Akitas, Chows, wolf hybrids, bull terriers and Presa Canarios.
Insurance companies are trying to cut their losses. In the last decade, dog-bite claims have accounted for more than a third of all homeowner's insurance liability losses, totaling $489 million in this country in 2012, according to the Insurance Information Institute. The average claim paid out was $29,750.
Without insurance, owners are on the hook. The days when most judges gave owners a pass for a first-time offense are fading fast, says Randolph.
In about half of the states, owners are expected to presume a dog might cause harm, even without any prior indications. Owners can even be sued if a person is injured as a result of being frightened by a dog, as with the mail carrier.
"The trend is definitely to make owners responsible for their dogs," Randolph says. "Even if your state's law hasn't changed, you may be found liable where in the past you might not have."
Homeowner insurance limits pertaining to pets
Homeowner insurance policies typically provide between $100,000 and $300,000 in liability coverage on a standard policy. But, again, don't assume those apply to the pet -- read carefully for any mention of limits.
Phillips had a client who'd been bitten by a friend's dog. "No problem," the dog's owner had said. "I have $300,000 in liability coverage." But the owner's insurer pointed her to a little clause she'd overlooked: when it came to incidents involving the dog, coverage was only for $50,000.
The medical and other bills exceeded that amount, as can often be the case. Damages can include legal costs, emotional and physical pain, and loss of future wages and enjoyment.
"We had to go after the woman individually to pay," Phillips says. "She was shocked. She hired a lawyer, said, 'I bought a $300,000 policy.' The lawyer said, 'Sorry, you should have read it.'"
Some companies won't exclude breeds outright, or are prohibited by state law from doing so. But they may require the owner to submit behavioral evaluations, and will likely cancel coverage following an incident.
"You're always going to need to check with your carrier," says Paul Vames, a lawyer in Hillsboro, Ore. "Certain breeds require a vicious-breed rider, or endorsement. . . . You need to let the insurance company know you have that kind of breed."
Do you need an umbrella insurance policy?
Also known as a personal excess liability policy, an umbrella policy can extend coverage to other areas, such as libel or rental units, and, more importantly here, raise the total dollar amount for all coverage.
Phillips recommends that anyone with a dog, particularly a medium or large dog or a high-risk breed, buy an umbrella policy.
"It's going to cost you under $100 and it's going to get you $1 million coverage," he says. "And the person who gets hurt by your dog is going to be your niece, or your friend's son, or your neighbor."
Auto insurance for the dog?
You know your auto insurance will provide some medical benefits for your injuries and those of your passengers. But what about your pet?
The answer is a bit complicated. In the insurance world, pets are generally treated as property. As such, if the other driver is at fault, his liability would cover your loss. That would include what you paid to treat your pet.
If you are at fault, however, your collision coverage kicks in, if you have it. And collision doesn't cover the property in your car. You're on the hook for any vet bills.
In response to this gap, some auto insurance companies have begun offering drivers separate pet-injury insurance, so if you are interested in getting such coverage, be sure to ask about it when you compare auto insurance companies.
Progressive kicked off the trend in 2007, and its coverage is automatically included in collision, paying up to $1,000 for a pet injured due to an accident, fire or theft. Others are doing the same, including Erie and Auto-Owners.
"Pets are part of your family," Progressive states, "they're your passengers, too. So shouldn't they be covered by your auto insurance policy? We think so."
Several other companies offer what Arbella Mutual Insurance calls a "pet lover's endorsement," which for $20 a year buys you $500 in coverage. The Chubb Group offers $2,000 worth of pet-injury coverage. Always check the fine print to make sure your particular pet is covered, particularly if it's an exotic animal.
Of course, the question remains as to whether $500, or even $2,000, will be enough. As anyone with pets knows, vet bills can easily run higher. Which leads to the question that may most haunt new pet owners: is pet health insurance worth the cost?
Veterinary insurance: don't expect an immediate return
Only 1 percent of pets in the United States are covered by pet insurance, according to the North American Pet Health Insurance Association. Of the pets covered, 85 percent are dogs.
In Germany, Scandinavia and the UK, where pet insurance began a century ago, a quarter to three quarters of pets are covered.
In addition to the fact that pet insurance is relatively new in this country -- VPI was the first to open its doors here, in 1982 -- some of the difference in adoption rates may be due to Americans' perception of the role of insurance.
Those in the industry say clients and the media often ask whether pet insurance guarantees an immediate return on investment. They then do the math on an annual basis. By this calculation, the answer is typically "no."
Pet insurance generally costs between $300 and $500 per year, depending on the company and the benefit plan. As with people's health insurance, plans offer varying deductibles and co-pays, as well as treatment maximums and annual limits.
Consumer Reports, which conducted a review of many top plans in 2011, concluded that unless there's a major event, pet insurance isn't worth the investment.
But such reasoning misses the mark, say experts, particularly if you are of moderate means and would prefer not to let finances determine your pet's fate. If you're not wealthy, it can be difficult to save $6,000 for emergency intestinal surgery, $10,000 for cancer treatment, $1,000 for a broken leg, or even $500 for feline diabetic testing and treatment.
"In an ideal world, we wouldn't need pet insurance because we'd put money aside every month," says Kristen Lynch, executive director of the North American Pet Health Insurance Association. "But we don't live in an ideal world."
"The whole point of insurance is to pool your capital so when you're not claiming it, other people can," she says. Meanwhile, you have bought peace of mind, knowing the money's there when you need it.
"In an emergency situation, having insurance can take away the sting of an unexpected cost concerning a pet's health," says Dr. Steven Rowell, director of the emergency hospital at Tufts University Cummings School of Veterinary Medicine.
The problem is that pet plans vary tremendously. Even if a family member recommends a plan he or she likes, research several plans yourself on a site like PetInsuranceReview.com. Key points to keep in mind:
- Some pet insurers, such as VPI (Veterinary Pet Insurance), either set their own costs for particular treatment or limit annual payouts for procedures, regardless of what your vet recommends or charges. Carefully check those limits against potential costs. Most plans pay a set percentage instead -- say 80 percent -- of the actual vet bill and impose an annual maximum for all treatment combined. This model is gaining in popularity.
- Some plans exclude the most common or treatable conditions. Frances Wilkerson, a veterinarian who outlined her research at pet-insurance-university.com, recommends that owners only buy plans that cover cancer, chronic disease, hereditary and congenital disease, and conditions common to your breed.
- Consider carefully whether to spend the extra money on preventative treatment, included in so-called wellness plans. You'll spend a bit more and get a bit more back, but it's often a wash in exchange for the pleasure of doing paperwork. "It's essentially sending money back and forth," says Michael Hemstreet, founder of PetInsuranceReview.com.
- Most importantly, understand that pet insurance never -- yes, never -- covers pre-existing conditions. You must buy the insurance before the problem develops. As Hemstreet points out, pet insurers make slim profit margins and only after several years in business. Companies couldn't afford to be in business if customers only signed up when they needed payments. That's not how any type of insurance works.
Hemstreet receives e-mails every week asking whether there's any company that pays for a newly diagnosed condition. "They wait too long," he says. "Then they're upset." He explains that you can't add the applicable car insurance after a tree falls on your car, or flood insurance after a flood. Not for payment on that event anyway.
"Then they all get insurance for their next dog," he says. "That's why it's growing. You don't know how expensive vet bills are until something happens."
Dog is my co-pilot: How to safely transport your pup in your car
If you let your dog ride loose in the car, you may not want to watch the videos of the crash-dog dummies posted by an animal safety group.
The stuffed animals, weighted to approximate real dogs, lurch forward at violent speed, their harness belts tearing apart like paper. The dogs bounce off the front seat and into the back-breaking edge of the back seat bench, bodies folded, necks arched, legs flailing. One dog crashes straight through the front seating material into the driver’s seat.
The non-profit organization responsible for the tests, The Center for Pet Safety, wants people to see these videos. Doing so inevitably helps raise awareness of the issue and elicits the right questions.
Why, for example, do nearly all the harnesses or seat-belt attachments break apart at low highway speeds? Why do some products say they’re tested, only to fail? How can an owner be expected to safely transport his pet?
More than half of U.S. dog owners (56 percent) let their dogs ride in the car with them at least once every month, a 2011 survey from AAA and Kurgo, a manufacturer of pet travel devices, found.
Yet only 16 percent of owners reported using a pet restraint, even though 83 percent thought an unrestrained dog in a moving vehicle posed a danger.
A body in motion stays in motion. When the car stops, multiply the speed the pet is still traveling by its weight to approximate the pounds of pressure that pet now can exert on a small area in its path.
An 80-pound Labrador hurling forward at 30 mph? That’s 2,400 pounds of pressure. A 30-pound dog at 50 mph: 1,500 pounds. Both exceed a boxer’s punch and can break necks.
"In the event of a crash, your pet becomes a missile in the car," AAA spokeswoman Heather Hunter says.
Safety experts say this fact often comes as a great surprise to pet owners, nearly one in five of whom let small dogs crawl on their laps. Here are some others:
- Any size dog can easily be killed by the massive force of an airbag. If a small dog is on someone’s lap, that explosive force will not only crush the dog but can severely injure the person behind it. Dogs should ride in the back.
- After an accident, a loose, frightened dog will run. Stories abound of dogs struck and killed by another car, or causing other cars to swerve and crash. If your dog causes another accident, your homeowner's and auto insurance may try to deny coverage. "Often the two insurance companies end up duking it out in court, each trying to escape an obligation to pay," Randolph writes at Nolo.com.
- In an accident, where owners and dog alike may be injured, even a friendly dog is likely to bite rescue workers who reach their hands inside. It is not the dog’s fault. Its protective instinct simply takes over.
- Despite the risks, harnesses don’t restrain a dog in a stop or crash. When the Center for Pet Safety did its first round of tests, in 2011, it reported a 100 percent failure rate for pet harnesses.
The problem is that manufacturers aren’t required to test pet travel products, nor are their advertising claims regulated by government. A manufacturer may claim its harness has been tested, but no government agency is checking those claims or the testing procedures.
"The word ‘safe,’ or ‘safety,’ is so overused in the pet industry," Center for Pet Safety founder Lindsey Wolko says. "It's actually a marketing term. It's not a statement of fact."
But at least one company returned to the drawing board. In the center’s tests this year, funded by the automaker Subaru (half of whose customers travel with their dogs), the Sleepypod's Clickit Utility Harness "was the only harness tested to consistently keep a dog from launching off the seat," the study reported.
Those tests were done at 30 mph with simulated 25-, 45- and 75-pound dogs.
Don't forget, too, say highway officials, that pets of all kinds pose a significant distraction. Bicyclists and other drivers have been killed when drivers turned to restrain a puppy. Now police in several states will ticket drivers whose pets aren't restrained. In New Jersey, drivers can be cited under an old animal-cruelty law.
Phillips, the California lawyer who specializes in dog-bite cases, says even drivers who aren’t to blame for an accident risk losing money in a settlement if any evidence of a potential distraction surfaces.
"If you have an unrestrained dog you will be accused of causing that accident," Phillips says. "You're exposing yourself to all kinds of hellfire if something happens."
Other safety tips:
- A walking harness clipped to a seat belt may prevent a dog from distracting the driver, but it won't offer protection in a crash.
- Don't try to rig up your own safety device, and never tether a dog’s neck. "There's enough force even in a short stop to break your dog’s neck," Wolko says. Heavy chains can also whip loose and cause a severe injury. "We tell people, Imagine using that product on a child."