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Advice & More March 2013

Dollar Sense

Who Has to Pay for That?

By Teresa Ambord

If your dog bites or otherwise injures someone, you may be liable if you knew the dog had a tendency to cause that type of injury, if the state you live in has statutes that make you liable even if you did not know, or if the injury resulted from your unreasonable carelessness.

It’s common to hear people spout off about who is responsible to pay for damages that happen, or who bears legal liability. We do it all the time, because we think we know, but often, we are wrong. Here are some scenarios that often lead to misunderstandings.

 

Your Neighbor’s Tree Falls in Your Yard

Suppose a storm hits, and your neighbor’s tree falls into your yard. There was no structural damage, but you discover it’s going to cost at least a thousand dollars to remove it. You’re confident your neighbor will take care of it. After all, it was his tree, therefore his problem, right?

Wrong. When you talked to him about it you were astonished to hear that he has no intention of picking up the cost, and his insurance isn’t opening its wallet either. The fact is, a standard homeowner policy will not cover this, unless there was damage to insured property.

If his tree hit your house, garage, a fence, or other insured property then your policy, not your neighbor’s, may kick in. Of course you’ll have to pay your deductible and the payout will be subject to your policy limits, which, according to the Insurance Information Institute (iii.org) is usually about $500 to $1,000. Note, the payment is for the damage, not for debris removal. Some insurers may pay for debris removal if the fallen tree blocks a driveway or a ramp needed for handicap access.

There are situations when a neighbor’s tree is diseased or improperly maintained, and then it falls. If that happens, your insurance company may go after the neighbor’s insurer. And, if that is successful, you may be refunded your deductible. You can learn more by logging onto iii.org, and type in “trees and insurance.”

 

You Host a Get-Together With Alcohol and Then… a Guest Has an Auto-Related Injury

Loretta Worters, a vice president with the Insurance Information Institute sums it up this way, “Those throwing a party where alcohol is served have both a legal and moral responsibility to make sure that their guests are capable of driving safely. You don’t want to allow anyone who has been drinking to drive a vehicle while impaired. Not only do your guests risk injury or death to themselves or others, but you may be held financially responsible.”

The criminal and civil responsibility of those who furnish liquor to guests is known as “social host liability” or “dram shop liability.” This liability varies depending on the state you live in.

  • There may be no host responsibility.
  • The responsibility may be limited to injuries that occur on your property.
  • You may be liable for injuries that occur wherever that guest goes.
  • The liability may apply only when alcohol is served to minors.
  • Thirty-seven states have laws or case law that can hold social hosts liable when they serve liquor to people who are then involved in crashes that result in injury or death.
  • Forty-three states have some form of laws on their books covering the host’s responsibility, which may be financial and in some cases, criminal. These laws generally offer the victims of a person injured by your alcohol-impaired guest a way to sue you.

Learn more at iii.org, and type in “Social host liability.”

 

Your Dog Injures Someone

If your dog bites or otherwise injures someone, you may be liable if you knew the dog had a tendency to cause that type of injury, if the state you live in has statutes that make you liable even if you did not know, or if the injury resulted from your unreasonable carelessness.

The Insurance Information Institute reports there are three kinds of law that hold owners responsible. They include:

  • Dog-bite statute. Where you are automatically liable for whatever injury or property damage you dog causes, with or without provocation.
  • “One-bite” rule. Some states will not hold you responsible for the first bite. However, once the dog has demonstrated the tendency to bite or otherwise shown vicious behavior, you may be held liable. There are also states which had the one-bite rule but have dropped it, and now hold owners responsible for any injury, regardless of whether the animal has a history of biting or otherwise injuring someone.
  • Negligence laws. The dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.
  • Trespassers. Dog owners are not liable for injuries to trespassers in most states. However if you live in a state that does hold the dog owner responsible, you may also have to reimburse the injured trespasser for medical bills, lost wages, pain and suffering and property damage. Get more information at iii.org, and type in “Dog bite liability.”

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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