Here is a test for those of you who are pet owners as well as insurance professionals.
Look your pet straight in the eye and say: “You are merely an item of personal property. If you are injured or killed by someone else, I am only entitled to receive your replacement cost or fair market value in compensation.”
If you find it difficult or impossible to complete that test, you are part of a growing number of people who claim that the value of a pet is far in excess of what it would cost to acquire a similar animal.
Courts and state legislatures are starting to agree, and the result could be a growing area of exposure for liability insurers.
Affection for pets, also called “companion animals,” is driving an “animal law” movement sweeping the United States. This movement seeks to provide animals with certain legal characteristics and protections once exclusively reserved to humans.
The animal law movement is an effort of attorneys and animal advocates distinct from the often radical “animal rights movement.” Animal law was recognized as a mainstream field of law in the U.S. in 2004 when the American Bar Association created its animal law committee.
“Various members of the profession are pursuing innovative (animal) litigation,” says Barbara Gislason, a Minnesota attorney and a principal founder of the animal law committee. “All over the country, they’re pushing the envelope.”
Animal law advocates have promoted, with considerable success, several types of initiatives:
- Codification of the right of pet owners to establish trusts to provide for care of pets after the death of an owner;
- Specific consideration for the custody of pets in divorce proceedings;
- Criminal penalties against animal owners who utilize cruel or negligent techniques to discipline or confine pets (such as tethering for extended periods of time); and
- Enhanced valuation of pets as unique forms of property, with correspondingly increased ranges and amounts of damages for injuring or killing another’s pet.
Regarding the last two points, Gislason says that her acquaintances who are judges attest to “how dramatically public attitudes [about harm to pets] have changed over the past five years.”
The movement was galvanized in 2007 when dogs and cats throughout the U.S. were sickened by tainted, imported pet food.
For perhaps the first time, tens of thousands of pet owners suffered damage from a common or similar source, and discovered that the recovery for their loss could be quite limited. The possibility for class action suits was established, and demands for greater compensation for losses to pets grew.
As one would expect, animal law in the U.S. developed primarily in a rural setting, where most animals were livestock, easily considered to be personal property with the typical characteristics of personal property.
There were markets in which the fair market value of an animal could be determined, animals generally depreciated as they aged, and injured animals could generally be replaced with equivalent animals, although some additional compensation might be needed for the loss of an animal with unique abilities.
Pets are a different matter entirely.
Other than for certain pure breeds, there is no market for “used pets.” The best estimation of a pet’s monetary value is the price one would pay for a like animal at a pet store or animal shelter.
Also, to a pet owner, an animal does not “depreciate” with age, but grows more valuable as a companion and source of affection.
For these reasons, animal lawyers have fought, with some success, to increase the value courts attach to pets in cases where a pet is killed or injured due to the malicious or negligent actions of others.
The principal targets of “animal plaintiffs” in such cases are veterinarians, pet services (e.g., kennels and grooming establishments), and manufacturers of pet foods, medicines, and grooming supplies.
However, cases have also been filed against individuals who harmed others’ pets, or whose own pets harmed another’s.
Generally speaking, state courts have held to the idea that pets should be regarded as property and valued as such for compensation of their owners.
With some exceptions, state courts have been reluctant to permit damages to be awarded for emotional distress arising from property damage to a pet, although they appear to be more willing to assess punitive damages in cases where the defendant is found to have acted with malice or gross negligence.
In 2001, the Alaska supreme court ruled that the actual value of a pet to its owner can sometimes be a better measure of its real value than the animal’s fair market value. However, any argument for unique value had to reference specific services provided by the pet, not sentimental value.
In 2004, a Texas appeals court ruled that the “special or pecuniary value” of a dog had to be attributed to its usefulness and services, not to companionship or sentimental attachment. Also, the court ruled that there could be no recovery for mental anguish as a result of property damage.
Given the traditional limitations on recovery for loss of a pet, Gislason says that animal law attorneys have sought to establish a specific tort for injury to a pet.
The growth of veterinary medicine has added a new dimension to the economic damages that can be awarded to the owners’ of an injured pet, however.
In a ruling reflected in other jurisdictions, a Kansas appeals court in 2006 ruled that the “reasonable and customary” cost of veterinary treatment could be included in damages, even if the animal in question has no discernable market value.
As any pet owner knows, what is considered customary today for medical treatment of pets far exceeds what was considered customary years ago, and grows by the year.
An “issue paper” posted by the American Veterinary Medical Association (AVMA) states that “many courts have allowed owners to be compensated for a broad range of ‘economic’ damages, including veterinary costs (such as vaccinations and certain treatments), special training costs, costs of breeding, the pet’s purchase price, its breeding potential and other specific, economically measurable items.”
Where courts may hesitate, state legislatures are prepared to move in.
Numerous bills have been proposed and enacted that would allow pet owners to recover more than the fair market value of a pet injured or killed by another’s malice or negligence.
A bill in the New York state assembly would make anyone responsible for the death or injury of another’s pet liable for veterinary and other “special medical care” expenses, plus court costs, attorneys’ fees, and other reasonable expenses. In addition, the owner of the deceased pet could be compensated for “reasonably expected society, companionship, and comfort.”
A bill in New Jersey would establish economic damages to include a pet’s monetary or replacement value, its breeding potential, veterinary expenses incurred to treat an injury, reimbursement of training expenses, and expenses for cremation and/or burial.
The New Jersey bill specifically addresses the liability of pet owners whose pets cause harm to others’ pets, a growing area of concern to animal lawyers and animal law advocates.
A Massachusetts bill would make the “pain, suffering and loss of faculties” of an injured animal compensable offenses, in addition to the pain and suffering of the animal’s owner.
An Arizona bill seeks to impose a higher level of care shown toward pets by requiring that motorists take “reasonable and appropriate action” to assist others’ pets that are involved in a vehicle accident; the bill would waive liability for injury for someone seeking to provide such care.
Non-economic damages for loss of companionship and for pain and suffering would not be covered under a typical homeowners policy, but economic damages for caring and/or disposing of an animal possibly would.
According to Adam Karp, an animal lawyer based in Bellingham, Wash., homeowners insurers vary greatly in their approaches to settling pet liability losses.
“Some insurers offer the most miserly sums for a purported replacement value of $60, the
cost to adopt another cat,” he says. “Others will settle for several thousands of dollars for the intrinsic or special value of the so-called property to the owner-guardian.
“If there is an allegation of recklessness or intentional misconduct, there will be an intentional acts exclusion.”
To avoid triggering intentional acts exclusions, Karp says that “some attorneys plead negligence when one can barely keep a straight face in making that assertion.”
Insurers that use the AAIS Homeowners Program and other liability forms will be happy to learn that the definition of “bodily injury” states that it means “bodily harm to a person.”
Inclusion of the word “person” should eliminate any ambiguity that liability coverage for bodily injury might be applicable to non-human animals. That qualification is not universal in policy forms, however.
Furthermore, the AAIS definition of bodily injury indicates that it does not include any “bodily harm, sickness, disease, or death that arises out of mental or emotional injury, suffering, or distress that does not result from actual physical injury to a person.”
Similarly, the medical payments and first aid provisions in AAIS Homeowners liability coverage are written to apply to treatment of bodily injury to human persons.
In short, liability exposure under a homeowners policy is confined to liability for property damage, defined as “physical injury to or destruction of tangible property or the loss of use of tangible property, whether or not it is physically damaged.”
Personal liability forms in themselves do not address issues of valuation. As is typical, AAIS Homeowners and personal liability forms agree to pay all sums, up to applicable limits, that an insured is legally liable to pay for property damage as defined.
In addition, the forms include a standard “Damage to Property of Others” provision that pays up to $1,000 per occurrence for damage to the property of another caused by an insured, regardless of liability.
This provision plays essentially the same role as medical payments coverage does for bodily injury; it provides a way to settle small claims and keep them out of court.
In the past, most claims for injury or death to another’s pet could be settled well within that limit, even if customary (for the time) veterinary expenses were included in the damages.
With the level of damages being contemplated today, it is increasingly possible that insured damages for injury to a pet will exceed the “Damage to Property of Others” limit under a homeowners or personal liability policy, even if some of those damages are not covered under the policy.
As the AVMA issue paper states: “The increase in the amount of litigation alone will increase the number of settlements--settlements reached not because the defendant admits liability, but because the insurance carrier believes settlement will be a cheaper resolution than a successful court defense.”.
Lovable property 
