In recognition of National Dog Bite Prevention Week 2017, from April 9–15, here are some questions and answers relating to the ownership of dogs by tenants and the available insurance coverage for dog bites and damage to the premises.
Question. The insured owns a rental home that is insured on a Dwelling Fire policy. The liability for the rented home is endorsed to the Dwelling Fire policy. The tenant of the rented home is the insured's adult son. The adult son owns a dog that bit another individual. How do you see liability coverage, if any, applying in this situation? The Dwelling Fire liability policy has the following wording:
Definitions:
3. "Insured" means you and residents of your household who are a. Your relatives; b. Other persons under the age of 21 and in the care of any person named above c. with respect to animals or watercraft to which this policy applies, any person or organization legally responsible for these animals or watercraft which are owned by you or any person included in 3.1. or 3.b. above. A person or organization using or having custody of these animals or watercraft in the course of any "business" or without consent of the owner is not an "insured."
— Ohio Subscriber
Answer. Unless the insured is living in the dwelling with the son, the son is not considered an insured — he is a tenant like anyone else. Therefore, the son would need to have his own liability policy in order to have coverage for the dog bite.
The liability is for the insured, the father, not his tenants. Being a relative does not automatically make one an insured, especially when they live in separate residences. This is something most insureds do not understand. Unless the father is somehow found legally liable, there is no coverage.
Question. We insure a dwelling under an HO 00 03 10 00 ISO form with a Limited Fungi, Wet or Dry Rot & "Bacteria" Coverage endorsement attached. The insured had a tenant who owned a dog and lived in part of the owner-occupied dwelling. The facts of the case suggest that the tenant owned this dog, not the "insured(s)" and that the dog caused damage to various carpeted and hardwood floors within the rented portion(s) of the dwelling. When the tenant moved out, the insured(s) discovered the damage done by the tenant's animal and reported a claim for cleanup and repair or replacement of damaged flooring surfaces.
My coverage question is two-fold. First, as the "animal" was not "owned" or "kept" by the "insured," it appears that the open peril exclusion under A-Dwelling would not apply, thereby covering the damage caused by the tenant's animal. Second, as the damage done by the animal relates to bodily fluids, the "bacteria" enhancement coverage has been brought into question. The insureds contend that they must sanitize (cleanup or remediate) the animal's mishaps before they can rent the property to another occupant. As the proximate cause of loss is likely covered (ambiguous at best with respect to an animal not "owned" or "kept" by an "insured") wouldn't the Limited Fungi, Wet or Dry Rot & "Bacteria" coverage also be covered as an ensuing loss from an otherwise covered cause of loss?
— Rhode Island Subscriber
Answer. Indeed, because the dog did not belong to nor was kept by the insured, the animal exclusion doesn't apply. However, the wear and tear, marring or deterioration exclusion may apply. If the damage occurred over a period of time, you have wear and tear, however caused, that is excluded. The dog didn't tear up the house all at once.
As far as the fungi, wet/dry rot and bacteria endorsement, that applies only if "all reasonable means were used to save and preserve the property from further damage at and after the time the Peril Insured Against occurred."
Key here is the term "at the time." The insured wasn't able to try to preserve or save the property at the time of loss because it occurred over time and was not a specific instance; the endorsement only provides coverage when that happens. The endorsement is designed for flood situations, and not dogs that aren't housebroken or are just plain rude.
Question. Our insured's home was broken into. The thieves locked the insured's dog in the bedroom while the theft was occurring. The dog damaged the bedroom door and floor trying to get out.
Is this damage simply excluded because it was caused by an "animal kept by an insured," or is there coverage because it was a result of the dog being locked in during the theft?
— Connecticut Subscriber
Answer. It is the position of FC&S that exclusions need to be read in context; the animal owned by the insured exclusion is included with the wear and tear, deterioration, breakdown and other such exclusions.
We interpret this to mean that if the dog has repeatedly scratched on the kitchen door over a span of time wanting to go out, that is not covered, as it is wear and tear. However, in your situation the dog was trapped and trying to get out; one could even suppose the dog's desire to get out was to defend the insured's property, if you want to go that far.
Therefore, this type of loss should be covered, regardless of the true motivation of the dog.
Analysis brought to you by the experts at FC&S Online, the unquestioned authority on insurance coverage interpretation and analysis for the P&C industry. To find out more—or to have YOUR coverage question answered—visit www.nationalunderwriter.com/FCS.
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