Home Owners Insurance and Liability

Your home owners insurance covers two basic types of loss: property and liability. Here I will cover liability insurance for the home prior to moving on to property insurance.

Liability Insurance

Liability is the big bugaboo of home owners insurance. If a building burns down the insurance company can calculate what the losses will be, but if a child falls off your trampoline and ends up in a wheelchair the costs are going to depend on the vagaries of medical care and lawsuits.

We are all at risk of having an accident, so everyone is at risk for liability at home, but insurance companies have discovered that certain activities are riskier or will have bigger payouts than other activities. They price your home owners insurance accordingly.

For instance, your 15 pound miniature poodle might cause the neighbor girl to get stitches in her forearm, but your 150 pound bull mastiff might just kill the paperboy.

In a world with perfect knowledge all insurance companies might require the weight and breed of every pet and charge you according to the likelihood of your getting sued. Instead they are more likely to discriminate against the most dangerous breeds. They may refuse to insure people who own one of these breeds, or cause you to pay for a separate, and costly, rider that will cover the liability of owning a large and aggressive dog.

It is terribly unfair to those owners who have a peaceful, well-trained and loyal pit bull, but perfectly appropriate since the insurance company doesn’t know your dog personally. What the insurance companies do know is that there are guys like Christopher M. Davis (www.injurytriallawyer.com) who are willing to take them down just because Bowser got a little too playful at the barbecue.

To consider just how risky some animals are consider this factoid I shamelessly pulled off of Mr. Davis’s website:

“Seattle Animal Control sees about 300 dog bites each year. 22% of those involve pit bulls, despite the fact that pit bulls represent just 5% of the U.S. dog population.”

The irony! A lawyer suing an animal for being overly aggressive. Alas, it is these types of facts that cause homeowners who are also pit bull owners to pay higher premiums on their home owners insurance.

My Great Dane Story

Here is my story. I saw this happen. I was even responsible (but not liable). I was 16 at the time and taking care my neighbors two Great Danes. Lovely dogs. Dumb as a box of rocks and all the agility of an aircraft carrier, but friendly and gentle. And big. Did I mention they were Great Danes? I had the bright idea of taking them out of the fenced in backyard and out to the front yard.

Turns out I attracted a crowd of my friends and some of their younger brothers and assorted hangers on. One young boy on a bike, obviously the nervous type, got overly excited when Tank decided to give him a gentle, but admittedly slobbery nuzzle with his 15 pound head. The boy started making loud squeaking noises, flailed his arms around, then fell off his bike and onto Tank.

Tank wasn’t quite sure what was going on, but decided he needed to get out of there, so he lowered his head and did an "exit: stage left" maneuver. Now a quick dog, an agile dog, an athletic dog would have been in the next county before bike and boy came down on top of him, but this was a Great Dane and his decision to escape took a long time to make it to his paws, so all that really happened is that his head managed to duck down just in time to get a knee in the face from falling, flailing-boy.

I laughed at the time, and after consoling Tank, helped panic-boy to his feet. There was at least six of us there and none of us noticed our young friend looking any more wan or pale than usual and we certainly didn’t notice the bloody knee that was said to have required six stitches and a rabies shot. Obviously he came by his nervous disposition honestly, with both parents contributing to that gene pool.

I would have thought that the son of a trial lawyer would be made of sterner stuff, but I was young then, and uneducated in the fragile nature of the human psyche.

Death Traps and Home Owners Insurance

So there is my story and I have gotten totally away from the purpose of this article, which is to say that people who own pools deserve to pay higher home owners insurance premiums.

Pools and dogs are just two of the high-profile no-no’s that insurance companies look askance on while pocketing your money. There are others.

Trampolines and Home Owners Insurance

Insurance companies hate trampolines because risk managers at these companies were never children, and in fact they would prefer not to cover households with children, but that would limit their market too much.  So they cover households with children and then seek to make sure that the children never have any fun by banning trampolines and pools.

Truthfully, most homes with trampolines get by on the principle of “what they don’t know can’t hurt me”. Which is true unless there is a clause on their policy that forbids trampolines and they end up getting sued after little Billy does a face plant in the concrete.

My friend Mark Weinheimer did go to school for several weeks with his head wrapped in bandages but he made the mistake of landing in the springs of his own trampoline, so he never collected a dime. Which just proves that not only are the insurance companies killjoys, they are also right.

Home-Based Businesses and Home Owners Insurance

Most home-based businesses are not a great liability risk and will not create a problem for the home owner’s insurance company. The big exception is the child-care facility at home. Many states allow people to tend a few kids without getting a full license. Some take advantage of this by sneaking the business in under the radar and relying on their home owner's insurance to cover them.

Insurance companies hate this because now they are taking on additional risk without getting paid for it. This works fine for the homeowner until something bad happens. Because parents are particularly apprehensive and nervous about their children (see dog story above) childcare business owners often find that there is a nasty legal side to the business that they didn’t foresee.

Obviously, mentioning to your insurance agent that you are limiting your exclusive child care boutique to the children of trial lawyers is not a good conversation starter.

I could go on, with plenty of additional liability risk stories, but frankly I find this subject boring, so I am going to move on to much more exciting topic of property insurance.

To Top Page - Liability Insurance for Your Home

To First Page in Series - Factors Affecting Home Insurance Rates

To My Great Dane Story

To Third Page - Home Insurance and Your Personal Property Insurance

To Fourth Page - Fire Insurance and Your Home

To Fifth Page - Water Damage - Is It Covered by Insurance?

To Sixth Page - Natural Disasters

To Seventh Page - Man and Thieves and Property Insurance

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