Dog Story Unleashes Claims Handling Questions A 17-year-old driver turns into his street, heading for home. In an unfortunate coincidence, a neighbor four or five houses down opens the front door at that moment to let the family dog out. The dog runs into the street in front of the young driver who swerves to avoid hitting the dog and instead hits the pickup truck owned by the dog-owner and parked in front of his house.
The police are called and an accident report made. The homeowner apologizes for letting the dog loose. There was no evidence of speeding or recklessness. The policeman does not think there is enough of a case to cite the driver. This is a pure accident.
Simple enough. Guess were done here. The insurance carrier for the young driver will pony up the cost to repair the dog owners truck and, if the kid carries collision coverage on his auto, his car also. The kids insurance rates will go up and everybody goes on about their business.
Is that the way it should be?
In the facts as they came down, the insurance agent for the young driver assumed this was a liability damage claim, that the kid was liable, and passed it along to the company claims department that way. That is, until we had the chance to give this a little more consideration for our FC&S subscriber.
Why did the agent and adjuster jump right in to pay this claim? Well, it was probably efficient to handle it that way and didnt raise any red flags. It seems like a pretty standard claim. An inexperienced driver, who doesnt yet know youre supposed to go ahead and hit an animal rather than potentially run off the road, overreacts to a situation and causes damage. What else should be the resolution? Case closed.
But there is a different resolution, I think. The agent, being the advocate of the insured, and the company claims adjuster, being the protector of the insurance companys loss ratio, should step back and look at this loss in a different perspectivethat of the driver insured by their company. Are they serving their customer and company by efficiently paying this claim and getting the claim closed quickly?
The first clue that could have tipped off the agent or adjuster that coverage was not so cut-and-dried is that the police did not cite the driver. There was not enough evidence of recklessness or even simple negligence to support a traffic citation. The driver and witnesses stated he was under the speed limit and driving carefully when the dog appeared from nowhere and caused him to swerve into a parked car.
Then why is it the drivers fault? What about the negligence of the homeowner who opened the door, allowing a dog to bolt for the street? Did the agent or adjuster wonder if there is a local leash law that makes having an unrestrained pet a misdemeanor? Isnt a homeowner responsible for the damage caused by his pet? Is this a comparative or contributory negligence state?
You see, it might just be that the action in releasing the dog was the cause of the damage to both the parked truck and the young drivers auto. This claim might actually be backward. It may be that the neighbor is responsible for the damage to both vehicles, in that he caused the damage by negligently letting his dog run loose and in violation of a local ordinance.
And if that is the case, the dog owners homeowners liability insurance may be responsible for the damage to the kids car.
The point is that a claim might not be what it appears and every claim is worthy of careful thought and consideration. Rather than just accepting the claim from the insured, the agent should have probedasked the right questions that would lead to a conclusion in favor of his client. Is the loss as it looks or is there more there?
This claim should have been handled differently at the start. We dont know the outcome yet, but we do know that additional statements have been taken and the homeowners insurer put on notice of a potential claim.
The best result for the insureds is that the insurance company for each insured handle the damage to their own insureds property (after all, this is why people buy insurance and what our industry sells is peace of mind) and then negotiate a resolution or fight it out between themselves in subrogation.
A loss is not always what it appears to be.
Bruce Hillman, JD, is Editorial Director of Risk and Insurance Markets for the Professional Publishing Group of The National Underwriter Company, in Erlanger, Ky. Questions and comment are invited at fcs@nuco.com.
Reproduced from National Underwriter Edition, March 24, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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