The impact of a swimming pool on homeowners insurance premiums will be determined by the specific terms of your policy. Specifically, whether your premiums stay the same or go up when you install a pool will depend on whether your policy already includes pool coverage, which is common in the southern United States, and whether you want to increase your coverage limits. Even if you decide to upgrade your policy coverage or limits, there are preventative steps you can take to minimize the impact on your homeowners insurance premiums.
swimming pools are an attractive nuisance
In the insurance industry, swimming pools are the most cited example of “sexy nuisances.” uslegal explains that an attractive nuisance is anything that can attract a child and pose a danger to the unsupervised child. Examples of attractive nuisances include trampolines, farm equipment, artificial ponds, and of course swimming pools.
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Owners are responsible for taking reasonable steps to protect unsuspecting children from the potential danger posed by an attractive nuisance. For homeowners with swimming pools, reasonable steps may include installing:
- fence around pool perimeter
- automatic safety cover
- solid or mesh safety cover
- provide accessible safety equipment
increase coverage and homeowner limits
Even if you take reasonable precautions, you may want to increase the coverage and limits of your homeowners insurance. Of course, any increase in your homeowners insurance will result in a higher annual premium because the insurance company is taking on more risk.
First, you’ll need to confirm that your homeowners insurance policy covers swimming pools. many policies for homes in the houston area already do this, because swimming pools are so common in the area. if yours doesn’t, you’ll need to add this coverage.
Second, you may want to increase the liability coverage your homeowners insurance offers. most homeowners policies come with $100,000 standard liability coverage, and many homeowners never consider increasing that limit. According to Zacks Investment Research, insurance companies typically recommend increasing liability coverage from $100,000 to $500,000 when installing a pool. In states where pools aren’t standard, Zacks says, such an increase could add $50 to $75 to your annual homeowners insurance premium. In areas like Houston, where insurance companies often plan for residents to have swimming pools, the increase could be less.
Third, if your assets are significant, you may want to purchase additional liability coverage through an umbrella insurance policy. An umbrella policy provides much more liability coverage, well beyond the typical limits of a homeowners policy, at an affordable price. Zacks’ research shows that most general insurance policies cost between $200 and $300 a year for $1 million of coverage. While this isn’t technically an increase in your homeowners insurance premium, anyone purchasing an umbrella policy when installing a pool should be aware of this additional cost.
Keep your premiums under control
If you’re considering installing a pool in your backyard, talk to your insurance agent and pool builder about the effect it will have on your homeowners insurance. Your agent will be able to explain your current homeowners policy and suggest any adjustments that might be appropriate. Your pool builder will be able to give you ideas for incorporating proper safety measures, such as an automatic or manual pool safety cover, into your pool design. By working closely with them, you should be able to minimize the effect of a group on your homeowner’s insurance premiums. Depending on how much additional coverage you want, you may be able to keep your premium increases to just a few dollars if you take the proper security measures.