Risks that affect your homeowners insurance rates
Insurance, by its very nature, is about risk – the likelihood that an insured event will occur, requiring the insurance company to pay a claim. The insurance premium you pay reflects how great the risk, based on historical data about claims.
Most of us understand that your car insurance will go up if you buy a sports car, have an at-fault accident or are charged with a moving violation that results in points on your driving record. But your homeowners insurance premium can increase based on your children’s play equipment, how you maintain your land and even your choice of four-legged, furry family members.
You’ve decided it’s time to add a dog to the family and researched various breeds. But have you talked to your insurance company?
Yes, you need to. More than 4.5 million people are bitten by dogs every year, and more than 50 percent of dog bites occur on the owner’s property. Many bites require medical attention – which could mean claims against homeowners’ liability policies.
“While all breeds of dogs can bite and temperament largely varies, many insurance companies maintain a list of dog breeds that they consider to be dangerous, based on past claims or popular perceptions of breeds,” said Robin Price, president, Allen Tate Insurance.
These breeds include Pit Bulls, Rottweilers, German Shepherds, Dobermans, Huskies, Chows, Boxers and other breeds with potentially aggressive behavior.
So what if your desired dog is on the dangerous list? It is possible that you may denied coverage, but it’s more likely you will be offered limited coverage or pay a higher premium – because of the increased risk. It’s also common for an insurance company to require you to carry additional liability insurance, in addition to your standard homeowners coverage.
But your insurance company doesn’t need to know about your dog, right? What they don’t know can hurt you.
“Your coverage could be cancelled if you haven’t notified your insurance company about your pet. And you could be sued if someone is injured by your dog,” said Price.
You’ve found the perfect home – complete with a swimming pool. Anything to consider before you make an offer?
“In insurance terms, a swimming pools is considered an attractive nuisance. This strange but accurate name refers to an object, structure or condition that is both dangerous and irresistibly inviting or intriguing to children,” said Price.
While a swimming pool might make you the most popular neighbor, it also creates an opportunity for accidental death or injury. For that reason, insurance companies will require your pool to be securely gated and locked at all times. Your insurance agent may recommend raising your liability coverage and purchasing an umbrella policy for additional protection.
Other water structures like artificial or man-made fountains and ponds are also considered risky when it comes to homeowners insurance.
Another category of popular attractive nuisance is trampolines. While they seem like a great way to get the kids away from the video games and out of the house, trampolines are actually one of the most dangerous toys.
Trampolines cause more than 100,000 injuries annually, according to the Consumer Product Safety Commission, with 75 percent occurring when more than one person is jumping at the same time.
“Trampolines are also difficult to secure, so you may be liable if someone is injured, whether or not you gave them permission,” said Price.
As a result, some homeowners insurance companies will exclude trampolines from coverage. Others will require certain safety precautions or raise the premium. Similar conditions may be added for playground structures, treehouses, and skateboard ramps.
Other attractive nuisances considered insurance risks include abandoned cars, old appliances, railroad tracks, farm and construction equipment, power lines and holes in the ground.
A landowner can be held responsible for a child injured by any of these, assuming owner had knowledge children may trespass, an object or condition has the ability to cause harm, the cost of the repair is small, or the owner fails to take reasonable action to eliminate the nuisance.
Your Allen Tate Insurance agent can advise you regarding risks that may affect your coverage. It’s important to be upfront when obtaining coverage so your insurance is not cancelled. Don’t risk it!