The true cost of insuring your pool

By Melissa Neiman Posted : 07/29/2011

Pool home insuranceAs record heat has scorched a large swath of the country this summer, you may have dreamed of cooling off by adding a new backyard swimming pool to your home.

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Millions of Americans already have taken the plunge. There are 5.3 million in-ground and 4.9 million above-ground privately owned swimming pools in the United States, according to the Association of Pool and Spa Professionals.

But before you join this club, remember that pools are costly to build and maintain. And if you fail to secure the proper home insurance, damage to your pool – or an accident or injury to someone swimming in it – could leave you with a potentially disastrous financial headache.

"The biggest risk is the risk that someone is injured or killed in your pool and you are sued," says Loretta Worters, a spokesperson for the Insurance Information Institute (III).

Liability issues and your pool

Used responsibly, pools can be great fun. But the harsh reality is that they also can be dangerous. In 2007, there were more than 3,400 drownings in the United States, according to the CDC. Drownings are the leading cause of injury death for U.S. children between ages 1 and 4.

If someone is hurt or killed in your pool, you could face hundreds of thousands – or even millions – of dollars in potential damages and legal costs.

The risk of death or injury is significant enough that many insurance companies are skittish about covering pools with diving boards, Worters says. She recommends removing your diving board as way to increase your odds of getting good coverage.

Other precautions also are necessary to keep your pool safe and insurable.

"Some insurance companies may refuse to insure the pool if you neglect to do certain things such as have a lock and fence around the pool," she adds.

Communities typically have laws requiring pool owners to keep such safeguards in place, she says. Check with your local town or city hall to see if any such regulations exist.

If someone is hurt or killed in your pool, the liability portion of your home insurance policy will offer some protection in a lawsuit. But the standard minimum amount of liability coverage – typically $100,000 – may be too little to shield you from the cost of a large liability judgment.

For that reason, many pool owners increase their liability coverage to at least $300,000 or $500,000.

An even better idea is to purchase an umbrella insurance policy that will increase your total liability coverage to up to $1 million or more, says Steve Witmer, a spokesperson for American Family Insurance.

"An umbrella policy is a good idea for many reasons, and even more so for pool owners," he says.

Damages to your pool

A pool is a big investment, so make sure your insurance protects it from potential damage due to storms, fires or other events.

"We see quite a bit of damage from lightning strikes that inflict damage to pumps, filters and heaters," Witmer says. Falling tree limbs and wind-blown patio furniture also may damage pool covers or liners, he says.

Scott Spencer, a spokesperson for the Chubb Group of Insurance Companies, says the weight of soil surrounding the pool can cause a costly pool collapse, which sometimes occurs during renovation work on the pool or the concrete surrounding it.

"The potential for collapse is real and happens more often than people might think," he says.

A pool is covered under the "other structures" portion of a home insurance policy. Most policies offer coverage for such items equal to 10 percent of the total amount of insurance written for the dwelling.

Spencer says it typically costs between $35,000 to $65,000 to install a pool. Adding related features such as patios and fences can double the cost, he says.

When you combine the pool's value with the cost of other items covered under the "other structures" part of the policy – including fences, detached garages and sheds, and even driveways and sidewalks – you may need to increase your coverage level beyond the 10 percent benchmark. 

"It's relatively inexpensive to increase the coverage,"' Spencer says.

Many home insurance policies cover the pool from all perils except the exceptions specifically listed in your policy. But other types of policies may limit your protection to 16 perils. Knowing what your policy does and doesn't cover is crucial.

For example, Witmer says it's not unusual for animals to fall into pools, then cause damage to pool covers as they try to climb out onto dry land. Is such damage covered by insurance? It depends.

"Many insurance policies exclude damage if [it's] caused by a rodent but cover damages caused by a raccoon, deer or other non-rodent," he says.

So, it's important to talk to your insurance agent to make sure you have the right type of coverage – and an amount adequate to your needs.

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