Does Swimming Pool Raise Homeowners insurance Premium?
In homes in areas which enjoy an appropriate climate, a swimming pool and attractive resort style back yard have many positive aspects. There is no question that a swimming pool will favorably increase the market value of the home; for climates where outdoor living is the norm for many months, a resort style garden may be more appealing than larger indoor living space.
Apart from all the positive attributes, swimming pools and equipment come with a great responsibility of maintenance including regular sweeping, vacuuming, the addition of chemicals and upkeep of the machinery. The swimming pool is not only a costly addition to a home but also a liability at the same time.
The presence of a swimming pool adds the responsibility of making sure that the pool is not accessible to those not permitted to swim. Also, if there is a slide or waterfall, the attraction may pose the further possibility of bodily injury if not responsibly enjoyed.
Homeowners Insurance Policies generally include a minimum $100,000 Personal Liability coverage limit; for those with a swimming pool, it would be recommended to take a higher limit. Most carriers offer the option of increasing the limit to $300,000 or $500,000 for perhaps an additional premium of $20 – $ 75 per year (rates vary between carriers).
Liability is the greatest concern when it comes to pools; carriers do not usually charge an additional premium for the risk but it would be important to make sure that the homeowners insurance policy has sufficient Other Structures coverage to replace and reconstruct any appurtenant structures such as a gazebo, equipment room or changing stalls in the event of a loss.
In most jurisdictions, local laws require pool perimeter fences installed to protect youngsters from approaching the pool area unattended; these laws must be followed closely in the interest of safety and compliance with the insurance contract.
The insurance industry has classified swimming pools as an ‘Attractive Nuisance’; this simply means that the attraction comes with the risk of bodily injury, possible death and certainly the possibility of an insurance claim. It is imperative to disclose the risk to your insurance carrier so that the file is noted clearly that you have a swimming pool. Secrecy is not a good policy if you’re expecting to be covered in the event of a loss!
Many home owners opt to purchase a Personal Umbrella Policy offering much more liability insurance coverage in the event of a loss where the liability limit on the homeowners policy has been exhausted. It is most common to find Personal Umbrella Policies available from $1 Million to $5 Million; these policies are also inexpensive but the premium depends on the underlying risk. Umbrella policies are issued as Excess Policies, the coverage kicks in when the Underlying Policy Limits are exhausted.