The problem with having people over

By Susan Ladika Posted : 10/29/2014

guests and home insurance liability claims

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Hanging out with guests, sipping cocktails, while your dog romps nearby might seem like the perfect way for a hospitable host to spend the evening at home. But it might be a series of accidents waiting to happen.

Dogs, pools, alcohol, slipping and falling -- all can be the source of lawsuits and homeowners insurance liability claims.

Often, preventing those claims is as simple as exercising caution and performing proper maintenance. No one wants to be the cause of someone's injuries so it's prudent to prep your home prior to a party or get-together.

Bad dog!

More than one-third of all liability claims paid out last year by homeowners insurance companies were the result of dog bites, according to the Insurance Information Institute (III). The latest data show the trend is not changing any time soon. 

Dog-bite claims cost more than $483 million in 2013, with the average cost paid out for dog bite claims reaching $27,862.  The III notes that the average cost per claim nationally has risen more than 45 percent in the last decade (2003-2013). 

Because of the prevalence of dog bite claims, some insurance companies have restrictions on the breeds of dogs they'll insure.

Regardless of the breed, if you know your dog is aggressive you should keep it on a leash, and out of situations in which it might bite.

And if you don't tell your homeowners insurance company that you have a certain type of dog, you might discover you don't have any liability coverage if you file a claim.

How's the water? Pools, Jacuzzis and hot tubs

If you own a pool, Jacuzzi or hot tub, you need to take preventive steps to decrease the chance of an accident before guests arrive. You should also be sure to notify your home insurer if you've added a pool, hot tub or Jacuzzi since you took out the policy.

The area around your swimming pool should be secured with fencing or a wall so it's not easily accessible to small children, and youngsters should always be supervised when they are around a pool. Jacuzzis and hot tubs can also pose risks, and they should be securely covered when not in use.

Swing sets, trampolines, slip-and-falls

Swing sets and trampolines can also be alluring to children, and fences should be installed around them to reduce your risk.

Slip-and-fall claims are also something you should safeguard against. Steps, sidewalks and railings should be secure, tree roots shouldn't be growing out of the ground and buckling driveways and sidewalks, and toys shouldn't be left strewn around.

Guns and cocktails

Guns and other weapons can also pose major risks, and should be kept under lock and key, so children and visitors can't get access to them. Even your antique hunting knife collection could be a problem if it's not properly secured.

Alcohol should also be kept locked away if minors are around. There's always the chance your teenager and his pals will try to sneak drinks while Mom and Dad are away, so it's important to keep liquor secured.

Intentionally serving alcohol to minors is illegal, and should be avoided at all costs. If something happens to a teen who you've been serving, your liability insurance policy won't cover it because it's related to a criminal act.

Even serving alcohol to adults can pose its own set of potential problems. According to the III, 43 states have "social host liability laws" in place. While the details of the laws differ, most allow the victim of a drunken driver to sue the one who served the alcohol. In some cases, the host may also be criminally charged.

Homeowner liability coverage and umbrella policies

Many of these situations essentially come down to exercising common sense to protect yourself and your guests. But you can also take other measures.

Standard homeowners insurance policies typically carry $100,000 or $300,000 in liability coverage.

Typically, umbrella policies require that you carry a minimum liability limit of $300,000 on your primary policy. Once damages exceed this limit, your umbrella policy should kick in to cover the excess. Umbrella policy liability limits generally start at $1 million and can climb to $10 million or even $20 million. A typical $1 million policy will cost about $150 to $300 a year, with the next million costing about $75 and $50 for every million after that.

 

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