Of the 128.58 million households in the U.S., 10.4 million homeowners have a swimming pool. And while most homeowners insurance policies will cover pool-related claims and liabilities, there are exceptions.
Whether your clients already have a pool or are considering adding one, it is important to address the following key issues to ensure that they understand how their pool is covered as well as what is and isn’t covered under their homeowners insurance policy.
Increased liability. A homeowners insurance policy provides coverage for personal liability should someone become injured on a homeowner’s property. However, having a swimming pool increases this risk exposure. According to the Insurance Information Institute, the minimum liability for most homeowners policies is $100,000. For insureds with a swimming pool, this limit is often considered too low. Explain to your homeowner clients that due to the increased liability exposure, it might be best to increase their liability limits to $300,000 or even $500,000.
Tip! This can be a good opportunity for cross-selling an umbrella policy with its excess liability coverage.
Pool classification. Typically, in-ground swimming pools are classified as “other structures” under the dwelling coverage of most homeowners insurance policies. This means, damage to a swimming pool from covered incidents such as storms or fires will be covered up to the policy’s other structures limits. However, other structures coverage is typically just 10% of the dwelling coverage, so it is important to make sure that this is enough to cover damages in the event of a covered loss. It is important to note that some insurance companies may also provide coverage for an in-ground pool up to the limits of a homeowners policy’s dwelling coverage.
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Above ground pools, since they are considered portable, are typically classified as personal property by most insurance companies. Therefore, any damage to an aboveground pool will be covered under the policy’s personal property section and up to the limit of the insurance contract. However, there are some insurance companies that consider permanently installed aboveground pools as an “other structure” under the homeowners policy.
Tip! Pool classification will vary among carriers. Discuss with your homeowner clients the type of pool they own and determine how to best cover the risk based on how it is classified under a policy.
What isn’t covered. While coverage will differ among carriers, most homeowners policies will not cover certain claim losses associated with pool damage, such as:
- Lack of winterization. Areas of the country where freezing temperatures are a common occurrence will require that homeowners properly winterize their pool. Failure to do so can cause damage to the pool’s structure and will not be considered a covered loss.
- General wear and tear. Pool ownership means having to replace a worn-out pool liner, replacing pump parts or proactively repairing surface or structural cracks. These issues are things that can happen over time and are expenses that are not covered under a homeowners insurance policy.
- Maintenance issues. Pools require constant maintenance. Failing to keep filters free from debris can damage pumps and lack of regular cleaning can damage liners. Losses that are determined to be caused by a lack of maintenance typically won’t be covered under a homeowners policy.
- Flooding. Damage to a pool caused by a flood is excluded from a standard homeowners insurance policy. If you have clients who want coverage for flooding to protect their home and pool, you may want to provide a quote for flood insurance.
When talking with your homeowner clients, be sure to discuss issues concerning swimming pools. You might also want to put together an article on pool insurance and/or pool safety. They’ll be sure to appreciate the information — especially in the event of a claim situation.
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