Here in PA driving off road vehicles on state public roads and streets is against the law. The police, however do not enforce that law. A few years back a teen who lives about ten miles from my house hit and killed my Collie with her ATV, on the road in front of my house. She flipped the ATV and then sued me for a quarter million for injuries she suffered. I demanded my insurance fight the case, but they settled out of court for a hundred thou..... I don’t agree with the law seizing the vehicle, however, that’s not punishing the criminal. You know the government will expand on this if it becomes standard procedure.
In my state there is a law requiring dog owners to keep their dogs on their on property by a secure fence or chain. If they are in the road, the owner can me cited and the dog is fair game. I would be particularly upset if someone rode an ATV onto my property and hit my dog.
That is heartbreaking.
Your insurance company had no chance of winning because most states make dog owners responsible for where their dog is 100% of the time and 100% responsible for any damage cause by the dog when loose and off your property.
If your dog is in the street and causes an accident, that’s on you, not the vehicle operator.
The only time this is generally not true is in western states that still have areas of unfenced “open range”. You hit a cow, you pay for the cow.