The IA Newsletter, September 2011
Installing a Pool? Buying a Trampoline? Make Sure to Let Your Insurance Agent Know!
In This Newsletter
If you install a swimming pool without notifying your homeowner's insurance company, it could result in any claims involving your pool -- or even your roof --being denied. The same goes for trampolines.
"When additions are made to your property, it's important to notify your agent," said Jeff McCarthy, with Harrington Insurance Agency in Cambridge, Mass. "If you don't, you're open to a possibility of misrepresentation, and the insurer could deny your claim.
"You might have a big problem if someone gets hurt using your pool."
MarketResearch.com reports the number of pools in this country has reached 8.6 million. Trampolines also have grown in popularity, but figures are unavailable.
Homeowners don't realize the liabilities they create by adding these amenities, said Etti Baranoff, an associate professor of insurance and finance at Virginia Commonwealth University.
"Even if an uninvited child drowns in your swimming pool because you didn't lock the gate, you can be sued for any amount," said Baranoff, co-author of "Risk Management for the Enterprise and Individuals," a textbook on homeowner policy issues. "If the homeowner's policy covers you for only $100,000, you would be responsible for the rest."
Insurance carriers want to make sure that a pool has proper fencing with a locking gate and that a trampoline has proper safety netting. Diving boards are a big no-no for most companies because they increase the risk of injuries.
Statistics compiled by the U.S. Consumer Product Safety Commission show that in 2004, the latest year data is available, 89,000 individuals were admitted to emergency rooms for trampoline-related injuries. From 60 to 65 percent of the victims were children under 14. Injuries ranged from strains, sprains, deep cuts, fractured bones to broken bones, concussions and injuries to the spine and head. Since 1990, there have been 11 deaths related to trampoline accidents.
Some homeowners ask their guests to sign waivers before using the pool or trampoline, but that is probably a futile exercise.
"A waiver doesn't remove liability," McCarthy said. "If you are liable, you're liable. A waiver doesn't change anything.
"I have 20 different insurance carriers, and 13 will say they don't want to cover you if you install a trampoline, while seven will take you with no premium increase as long as you have a safety net and it's anchored to the ground."
Homebuyers also tend to have mixed reactions to pools and trampolines. Some see them as attractive features. Others would not want a home with either.
"They are considered attractive nuisances," said Kevin Lynch, an assistant professor of insurance at American College in Bryn Mawr, in southeastern Pennsylvania.
He noted that "in many instances, state regulations prohibit insurance companies from having exclusions" for swimming pools, trampolines or other items -- "as a part of their policies. ... They have to decide either to write the policy or not."
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