The addition of a swimming pool to the backyard can be a blissful retreat for the household. While the pool offers hours of enjoyment, it comes with some serious considerations regarding home insurance and safety.
Pool Types and Features
The type of swimming pool that you purchase or build is important when reviewing your coverage. The discussion with an insurance representative should include a description of the type of pool, such as whether it is in-ground or above-ground. In addition, it is helpful to know the dimensions of the pool and the maximum depth plus any water features that are planned such as slides or diving boards.
Above-ground pools are typically considered by the insurance company to be personal property, since they can be removed and are not permanent structures. In comparison, an in-ground pool is considered to be an external structure and would increase the overall replacement cost of the home. If the in-ground pool is a new addition, it could increase the home value by an average of $20,000 to $30,000 or more, depending on the cost of that construction.
Homeowner's Insurance and Swimming Pools
Before making the decision on pool ownership, review the current homeowner's insurance policy coverage and discuss the details with an insurance agent. Pools vary in type and there are several factors that will determine how it is covered and the cost of the insurance premium.
Insurance coverage and cost will depend on the insurance company and the policy coverage that is selected. Homeowner's insurance requirements also differ because of the regulations that govern the state and city where the home resides.
The addition of an above-ground pool would require a review of the personal property coverage under the current homeowner's policy. This type of pool can be removed and so it is not a permanent structure. The discussion with the insurance agent should include the cost of replacement and the current limits of coverage.
In-ground pools are covered within the homeowner's policy under the heading of external structures, such as sheds, since they are not connected to the house. It is important to review the type of damages and perils that are named in the policy. (For example, falling trees and lighting strikes are usually covered perils.) Most policies cover the cost to replace a pool at up to 10% of the overall dwelling coverage, so this is a good time to review the replacement cost of the home and determine if additional coverage is needed.
Homeowner's insurance goes beyond covering damages to the property to also include liability protection. With a swimming pool, liability coverage is particularly important due to the potential for injuries to occur. Remember that homeowners are responsible for any injuries that occur on their property, even if the injured person was trespassing. Liability coverage should be reviewed with the insurance agent and the current limits may need to be increased.
There may also be a recommendation to purchase an umbrella policy. An umbrella liability policy provides additional coverage for possible injuries or accidents that go beyond the homeowner's policy limits. The Insurance Information Institute (III) estimates that the additional premium would be $200-300 a year for a $1 million umbrella policy.
Adding an in-ground pool to the property could lead to higher premiums, if the in-ground pool is valued at more than ten percent of the dwelling coverage. For example, if the home is insured for $300,000 then the external structures are covered for up to $30,000. Based on your insurance policy review, your agent may recommend increasing your 'other' structure coverage. That additional cost is about $5 per $1,000 coverage.
There are some factors that may mitigate the insurance cost such as the location of the home. For example:
- If the home is in a community or city where pools are common and the climate is mild, such as the Southwest, this may lower the insurance cost.
- Pools that are in warm climates do not have to be drained during the winter, and so the pool and plumbing are less likely to freeze.
- Adding a fence around the pool or positioning the pool such that is not visible from the street may help to reduce insurance premium.
Pool Safety Factors
As all homeowners want to be responsible. The Insurance Information Institute offers several suggestions for improving pool safety as well as controlling the cost of insurance.
- Provide adequate fencing around the pool and include locking gates
- Maintain adult supervision when children are in the pool
- Encourage swim lessons and CPR training for all members of the household
- Consider using a pool cover during off-seasons
- Install a pool alarm that activates when there is an unexpected intrusion into the pool
Swimming pools offer a wonderful activity for families. The homeowner has the responsibility of maintaining a safe environment and weighing all the factors regarding this addition. Insurance agents can provide a full review of policy coverage and premiums to provide the best protection against the risks involved.