To Dog Lovers’ Dismay, Insurers Balk at Covering Breeds That Bite

Q. You’ve written before about how insurance companies can legally discriminate based on occupation and other factors. I want you to write about a new kind of discrimination: against certain breeds of dogs! Our insurance company has decided to drop us because we own a pit bull and a German shepherd. The pit bull has never hurt anyone. The German shepherd bit a mail carrier a few years ago, although he barely broke the skin. The insurance company doesn’t care; our agent says that unless we get rid of the dogs, we can’t get coverage. I think that’s outrageous!

A. Here’s something that seems to have escaped many dog lovers: There is no place in the modern, urbanized world for dogs that bite. Dog owners can come up with all kinds of excuses--”She thought you were threatening me,” “He’s very territorial,” “He barely broke the skin”--but biting is inexcusable behavior, period, unless the person being bit is a burglar who is halfway through an open window, gun in hand.

Before you pop a cork, let me assure you that I love dogs, have owned dogs and have never been bitten by a dog, even though I have the bad habit of petting any dog that wags its tail at me. But dogs should not bite people, and people should not tolerate dogs that bite.

Insurance companies believe a dog that has bitten someone once is likely to do so again, and many will drop you after a single bite. Dog-bite victims often sue, and it’s your insurance company that ends up paying for your defense and any settlement or judgment awarded (up to the liability limits of your policy--you’re on the hook for anything over that amount).

As for discriminating by breed, statistics from the Centers for Disease Control show that certain types of dogs are more likely to be involved in fatal maulings than others. Your pit bull’s breed is at the top of the list, followed by Rottweilers and German shepherds.

You can shop around for a company that is willing to write a policy for a home that includes your dogs, although you may have an uphill battle and may have to pay more for coverage. You might also ask your insurer to write a liability policy that specifically excludes your dogs, and take the risks of litigation upon yourself. Some insurers will make that deal.

Is the situation unfair? Maybe so. But it’s legal--just as charging young men more for car insurance is legal, even though it seems unfair to the sober, cautious 23-year-old male who’s lumped in with his accident-causing brethren.

Perhaps your pit bull is the sweetest creature ever put on this planet. Maybe your German shepherd got a bum rap. But you have to weigh your strong loyalty toward your dogs with your responsibility to other people--and your own financial well-being.

Probate or Trust? Depends on State

Q. I am trying to do some research on living wills. I have a 91-year-old aunt living in Minnesota. My sister and I would be her sole survivors and beneficiaries. My aunt tells us that her lawyer in Minnesota cannot set up a will to avoid probate. He says it isn’t done that way in Minnesota. We both have living wills here in California and cannot figure out why my aunt’s lawyer will not discuss this possibility with her.

A. Well, part of the problem is that you’re using the wrong term. A living will is a document that tells your doctor what kind of life-saving medical treatment you want or don’t want if you are terminally ill and incapacitated.

What you’re talking about is a living trust. A living trust allows your estate--the property and money you leave when you die--to avoid the court process known as probate. The primary functions of probate are to authenticate the will, if any; identify and pay creditors; and distribute the remaining estate to the heirs. Probate is a public process and can be expensive, depending on the state, which is why people turn to living trusts. Living trusts take care of all the functions of probate in private and often at less expense.

Living trusts make the most sense in states such as California and New York, which have ludicrously long and costly probate processes. In California, for example, even modest estates take 18 months or more to be settled through probate, and the procedure can cost thousands of dollars in legal fees and administration costs.

Living trusts make less sense in states such as Minnesota, which have adopted probate reforms to shorten the process to a matter of months and at reduced cost. Those wise Midwesterners decided it was stupid to pay attorneys so much--either to go through the probate process or set up the trusts to avoid it.

It could very well be that the potential cost savings to your aunt’s estate are outweighed by the cost and hassle of setting up a living trust. Still, your aunt should be able to get a living trust set up, if that’s what she really wants. Have her talk to her attorney again now that she knows what to ask for.

Liz Pulliam is a personal finance writer for The Times and a graduate of the certified financial planner training program at UC Irvine. She will answer questions submitted--or inspired--by readers on a variety of financial issues in this column. She regrets that she cannot respond personally to queries. Questions can be sent to her at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. For past Money Talk questions and answers, visit The Times’ Web site at https://www.latimes.com/moneytalk.