Many people dream of having a pool in their backyard. Opening your backdoor and cooling off in the hot summer months with a private pool brings joy to many people.
Pools can be the focal point of a backyard oasis. They can be the reason for hosting family and friends for BBQs. They can help you make memories that will last a lifetime.
At the same time, pools can be costly — and not just from a maintenance perspective. In most cases, pools increase homeowners’ insurance premiums. But why?
Let’s take a further look into why having a pool can increase your home insurance costs.
The Attractive Nuisance Doctrine
The state of Michigan has an attractive nuisance doctrine that’s included in its Trespass Liability Act. Basically, the law says that homeowners must make safe conditions at their homes and property. Specifically, the law says any homeowner who doesn’t make these safe conditions that could then attract children could open them to a lawsuit.
For most insurance companies, a pool is categorized as an attractive nuisance. Another example is a trampoline.
Both of these things could attract children to your backyard. If they’re not properly secured — or in a “safe condition” — it would result in a dangerous situation.
Of course, pools are not inherently dangerous. Nor, do people get hurt in every pool.
At the same time, they are classified as an attractive nuisance because they attract children and present the possibility for injury. In other words, a home with a pool has a higher liability risk.
As a result, homeowners insurance companies must increase the premium costs to compensate for the higher risk. Similar cost increases come with sports cars versus sedans, for example.
How Do Insurance Companies Cover Pools?
Not all insurance companies treat pools in the same way. And not all pools are treated the same, either.
In general, most insurance companies will cover a home that has a swimming pool. An in-ground pool will generally be covered under your policy’s other structures or dwelling coverage. An above-ground pool will generally be covered either through personal property or other structures.
If you have a pool, it’s important to clarify with your home insurance company how your pool will be covered. This is because your policy will offer different protections, and have different deductibles, for the different sections of coverage.
Dwelling coverage is used to protect your primary home. Because of this, it offers the highest total amount of coverage.
Other structures will typically cover any other structure that isn’t attached directly to your home. This could include a fence, detached shed, and possibly even a pool.
This coverage is typically only 10% of whatever the dwelling coverage is. If your dwelling coverage is $400,000, then, your other structures coverage would be $40,000.
Personal property covers personal belongings that you keep in your dwelling. This coverage reimburses you if your personal property is damaged. Tools, electronics, and clothing items would all be covered under personal property.
All homeowners insurance plans will include liability insurance. This coverage provides protection in case someone gets injured while on your property. It protects you from lawsuits that may be filed against you if someone is injured because of your pool — and other items on your property.
Many home insurance policies will have at least $100,000 for liability coverage. If your home has a pool, though, you should strongly consider increasing that amount. Some insurance companies will even require you to have liability coverage of between $300,000 to $500,000 if you have a pool.
The reason for this is pools provide the potential for dangerous situations.
The Pool Safety Foundation provides a lot of statistics about the dangers of pools. One cites a study by Live and Learn, which found that more than 2,000 kids 5 years old or younger are treated for submersion injuries in a hospital emergency room every year.
This higher risk of major injury — and as a result lawsuits for damages — means a need for more liability coverage. And more liability coverage means a higher price for insurance premiums.
Homeowners who have a pool may also want to consider adding umbrella insurance to their policy. Umbrella insurance serves as supplemental coverage to your main homeowners’ insurance policy.
If a lawsuit were to exhaust the liability coverage on your homeowners’ policy, you would be responsible for covering what’s left out of your pocket. If the total damages were $700,000 and you had $300,000 in liability coverage, you’d be personally responsible for the remaining $400,000.
Not many homeowners could easily afford that. This is where umbrella coverage comes in.
Supplemental umbrella coverage can go as high as $1 million or more and would kick in only if your liability coverage on your main home insurance was exhausted. In the example above, then, your umbrella coverage would kick in and cover the remaining $400,000 on the claim. This would relieve you of having to personally pay for the remaining claim amount.
Umbrella coverage is often much more affordable than increasing the liability coverage on your homeowners’ policy. This is why many homeowners with a pool consider the dual strategy of having more liability coverage plus umbrella coverage.
Work with a Trusted Insurance Agent if You Have a Pool
Pools provide a lot of joy for homeowners. But they also provide an increased possibility for injury and, because of this, result in higher insurance premiums.
Insurance coverage for pools isn’t so straightforward, though. There are many things to consider with insurance coverage if you have a pool. That’s why it’s so important to work with a trusted insurance company that has experience covering pools.
At Signature Insurance, we have been working with homeowners throughout Michigan for years. We walk all our homeowners through every aspect of their insurance policies and give recommendations for what policies and coverage levels would be right for them.
Contact us today to find out more, and to get your free homeowners’ insurance quote.
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