Does your renters or homeowners insurance cover flooding? Dog bites? Stolen valuables? The stuff in your car?
You have no idea.
Insurance information site InsuranceQuotes found that most people are generally clueless about what, exactly, a homeowners insurance policy covers. Yes, 81% know that valuables stolen from their homes were covered under a standard homeowner's policy, but only 28% knew renter's insurance would cover valuables stolen from their cars. Renter's insurance generally covers personal property, liability and loss of use, but only 58% of renters ages 18 to 36 have a renters policy.
Meanwhile, 56% are under the impression that a standard homeowners policy covers flood damage. It doesn't, but that doesn't prevent 67% of young renters and homeowners from believing it does.
"Being misinformed about your home policy can be an extremely expensive mistake — especially when a few inches of water in a 1,000 square-foot home can easily cost over $10,000 in repairs," says Laura Adams, senior insurance analyst at insuranceQuotes. "There are a number of widespread myths ranging from coverage for dog bites to items stolen from your car that frequently trip up policyholders."
Those myths don't help when 54% of all consumers and 67% of Millennials don't know that a standard homeowners or renters policy would cover dog bites. That even includes incidents where your dog bites someone at the dog park, on the street or at any other location away from your property. However, it's not as if covering damages sustained by the people your dog bites on your own doorstep is necessarily a terrible thing.
According to the United States Postal Service, the number of postal employees attacked by dogs nationwide reached 6,755 in 2016 — or 200 more than the year before. It's reached the point where postal workers' scanners now indicate if there's a dog on the property they're visiting next.
"Even good dogs have bad days," says USPS safety director Linda DeCarlo from Los Angeles, where postal workers were attacked by dogs 80 times — the most for any city in 2016. "Dog bite prevention training and continuing education are important to keep pet owners, pets and those who visit homes — like letter carriers — happy and healthy."
With more than 50 letter carriers per city being bitten in Houston, Cleveland, San Diego and Louisville and 4.5 million U.S. citizens bitten by dogs each year, according to the Centers for Disease Control, it's enough to warrant concern.
Consider the impact of dog bites alone. According to the Insurance Information Institute and State Farm, dog bites and other dog-related injuries accounted for more than one-third (or $570 million) of all homeowners insurance liability claims paid out in 2015. While the number of dog bite claims nationwide decreased 7.2 percent in 2015, the average cost per claim for the year was up 16%. The average cost paid out for dog bite claims nationwide was $37,214 in 2015, compared with $32,072 in 2014 and $27,862 in 2013. Also, though dog-bite claims have dropped 9.3% since 2003, the cost per claim has nearly doubled in that time.
"The average cost per claim nationally has risen more than 94 percent from 2003 to 2015, due to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, which are still on the upswing," said Loretta Worters, a vice president with the Insurance Information Institute.
Homeowners and renters insurance policies will typically cover dog-bites for $100,000 to $300,000 worth of damages. If a claim exceeds the liability limit -- which is incredibly rare, given that the average dog-bite claim was $37,214 last year -- the dog owner is responsible for any damages above that amount, including legal expenses. A liability policy also provides no-fault medical coverage for a dog bite, generally worth $1,000 to $5,000, which allows a victim to submit medical bills directly to the dog owner's home or renter's insurance company.
"Most insurance companies will insure homeowners with dogs," Worters says. "However, once a dog has bitten someone, your insurance company may charge a higher premium or exclude the dog from coverage. Some companies require dog owners to sign liability waivers for dog bites. Others will cover a pet only if the owner takes the dog to classes aimed at modifying its behavior."