When you are making plans to build a beautiful pool in your backyard and dreaming of the oasis it will provide, you have many things to think about and decisions to make. Such decisions as the type of pool (e.g., vinyl liner pool or concrete pool), the size, the pool shape, the decking, the cost, and a myriad of other aspects of the swimming pool fill your days. These may be difficult decisions, yet it’s fun because you are envisioning the change it will make in your yard and the entertainment it will provide for your family and friends.
But, there is one component of owning an inground swimming pool that many people don’t consider and that is how the pool will affect your homeowner’s insurance. Adding a swimming pool on your property will add additional cost to your homeowner’s coverage. At Prestige Pools of NC, we value educating you in all aspects of building a pool. We believe you can make the best decisions for your situation when you know as much as possible about the process and all the “ins and outs” involved. In this article, we present the basics of homeowner’s insurance coverage and describe any additional riders you may need when you build a swimming pool.
What Is Homeowner’s Insurance and What Does It Cover?
We all know that when you own a home you are required by the mortgage company or bank to purchase homeowner’s insurance. You may wonder what the reasons are for this precondition. What is covered by the insurance?
Insurance exists to mitigate risk for you and other parties that hold a financial interest in your home. Homeowner’s insurance provides protection for you if the unexpected happens to your home or property by covering your home and other personal property in the case of a covered loss. It can also provide liability coverage if someone hurts themselves at your home or if you cause property damage. Usually, homeowner’s insurance covers your dwelling, other structures on your property, personal property, personal liability, medical payments to others, and costs incurred if you have to leave your home due to damage.
Your home is usually the largest asset on your balance sheet. The contents of a typical home such as furniture, appliances, clothing, family heirlooms, and other movable personal belongings add up to a substantial additional investment. An unprotected loss or partial loss of a home and its contents to theft, fire, windstorm, and other natural disasters can be cataclysmic financially.
Additionally, you can encounter the risk of personal liability. At any time, a visitor to your residence can slip and fall due to something that should have been repaired and presented a danger to others. These kinds of accidents can end up in court decisions awarding large sums to the injured party for medical expenses and pain and suffering.
Homeowner’s Insurance Coverage
A standard homeowner’s insurance policy insures your house and your belongings if there is a destructive event like a fire. Homeowner’s insurance policies are typically “package policies,” meaning that the coverage includes not only damage to your property, but also your liability for injuries and property damage to others caused by you or your family members, including household pets. Homeowner’s insurance coverage includes:
- Home: This is the physical structure of your house and other structures attached to it such as a garage.
- Other structures: This would include a detached garage, pool house, guesthouse, greenhouse or tool shed on the property.
- Personal property: This covers the contents of the home and can have specific dollar limits for certain types of property.
- Loss of use or additional living expense: If your home is damaged by a covered peril, loss-of-use coverage helps meet the costs of staying at a hotel, renting a home or apartment, and eating out.
- Personal liability: This coverage provides protection against legal liability for bodily injury or property damage if a third party is accidentally injured or their property is damaged.
- Medical payments: Limited coverage applies when a third party is accidentally injured and needs medical treatment.
How Does Building a Pool Change Your Homeowner’s Insurance?
If you keep in mind that homeowner’s insurance protects you from the risk of loss, you can start to see how having a swimming pool affects the policy.
Types of Insurance Covering a Swimming Pool on Your Property
The “other structures” coverage needs to include your swimming pool if something happens to it. This coverage provides repair or replacement in the event the pool incurs damage. A few types of insurance offer protection:
- Dwelling coverage pays for the home itself. Some insurers consider the pool to be part of the home and, as such, cover it under the dwelling coverage.
- Other Structures coverage protects structures that are detached from the home. This can include a pool.
- Personal Property coverage typically will include above-ground pools, so your personal property coverage provides insurance for that type of pool.
As a property owner with a swimming pool, you need to account for the additional liability you take on. Standard homeowner’s insurance liability protection may not be enough protection against all potential losses. If someone is injured in the pool, your liability coverage comes into play. A swimming pool is considered an “attractive nuisance.” If someone comes onto the property because of the pool and is injured, that person could sue you. Claims can be made for any pool-related injuries. This includes accidents from running on the pool deck, from diving, and, the worst imaginable, drowning. If your pool equipment causes an injury, that can be a claim for you as well.
The Insurance Information Institute recommends buying:
1) increased liability coverage on your homeowner’s policy and 2) an umbrella home insurance policy. An umbrella policy is separate from homeowner’s insurance. It provides liability protection above and beyond what the homeowner’s policy covers. For instance, a standard home insurance policy might provide a maximum of $50,000 in liability protection. But, with an umbrella policy, you could get coverage for any damage claims that are above $50,000.
Costs for Increased and Additional Insurance
Most in-ground pools don’t commonly incur damage because there are few perils that can possibly seriously damage them. They aren’t vulnerable to wind, water, and fire damage as your home is. Homeowner’s insurance can cover any damage to an in-ground swimming pool for a premium increase of approximately $50 per year. However, the insurer needs to let you know whether they consider the pool a part of the home itself or an external structure. The way the insurance company categorizes the pool impacts what happens to your replacement cost value or personal property limit.
Replacement Cost Value
Your policy may have replacement cost coverage, which pays to replace your home with the same or similar home in the current market. If your insurance company includes in-ground swimming pools in the replacement cost value of your policy, the value of your home increases. Consequently, this increases the cost of your homeowner’s policy premium because the pool increases the maximum claim limit for your property.
Personal Property Limit
Personal property coverage pays to repair or replace your belongings instead of the actual home. If the insurance company considers your pool an external structure (e.g., most above-ground pools), then you need to itemize the pool as an external structure. If this is the case, check with your carrier to see if the current limit is enough to cover damage to your pool. If it isn’t, then you will need to raise your personal property limit, thereby increasing the premium cost.
Contact Prestige Pools of NC for Your Customized Vinyl Liner Pool
If you are considering building an in-ground swimming pool, contact our experienced team at Prestige Pools of NC. We’ve been building custom in-ground, vinyl liner pools throughout the Triangle area for over 22 years. Our goal is to assist you in realizing the vision you have for your backyard. We will help you choose the perfect type of pool for you by consulting on every aspect of the process. Let us build the custom pool you dream of! We have worked with customers in Raleigh, Clayton, Garner, Wendell, Zebulon, and surrounding areas. Call us at 919-779-1033 or complete the easy-to-use contact form below to schedule a quote for a vinyl liner pool installation.