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The relationship you have with your home or renters insurance company is basically an exchange of responsibility and premium. In the simplest of terms, the premium you pay is represents what kind of customer (risk) you represent to your insurance company. This risk can be measured by a range of details such as who you are individually (marital status or age) as well as what you own. Because your homeowners or renters liability coverage can protect you in the event you are responsible for bodily injury or property damages, some of the items you own may give your insurance company cause for concern. So, what are some of the things your insurance company might consider uninsurable?
Even while you may view your filled pool as a go-to summer necessity, your insurance company views it as a danger (and a potential claim payout). Pools are also a huge source of unintentional drownings among adults and children across the U.S. According to the CDC, 10 people die from non-boating related drownings every day; of these 10, two are among under-14-year-olds. Despite this risk, most insurance companies will still cover a filled pool if it is fenced in for an additional premium.
However, drained pools are another story. Because a drained pool, fenced-in or not, is essentially a giant hole in your backyard with a concrete bottom, insurance companies see them as huge risks. The likelihood of your insurance company being on the hook for a liability payout after someone injures themselves in your empty pool are considerably high, given its characteristics.
For kids and even adults, trampolines are a great way to burn off some energy, kill a couple of hours, and practice your bounce-flips. But to an insurance company, a trampoline looks like a claim waiting to happen. And while not always a no-go for home insurance companies, trampolines are a bit more hit or miss.
If you or someone on your insurance policy is dead-set on getting a trampoline, you should consult with insurance company to see if there are any specific rules regarding ownership policies. Some insurance companies will require you to get additional paddings over the springs or a netting that surrounds the trampoline. Others, however, see them as too big of risks and will either cancel your policy or issue a non-renewal notice.
Now, we are using the word “pet” here in a pretty broad sense. This could mean owning a dog your insurance company classifies as “dangerous”, such as:
Or it could mean your pet tiger. Here is a generalized list of non-dog pets that your insurance company may not like:
Similar to owning a trampoline, there isn’t an across-the-board guaranteed answer to if your insurance company will cancel your policy because you own any of the above-mentioned pets. Some, however, will cancel your coverage because of what they see as an uninsurable risk. Others might charge you a higher premium or exclude any type of coverage specifically for the pet. In this sense, if your tiger mauls your next-door neighbor, your insurance company will provide zero coverage.
Owning a business is not an outright death sentence for your homeowner’s insurance policy, but running certain businesses out of your home can be. One of the most common businesses insurers have a problem with is a daycare.
Because your liability coverage protects you if you are sued due to a guest injuring themselves at your residence, running an at-home daycare opens your insurance company to a myriad of potential risks and claims payouts – and with kids, the behavior is unpredictable. Namely, children falling and injuring themselves or parents of injured children filing a lawsuit are the risks insurance companies most want to avoid. Because of these additional risks, many insurance companies will flat-out deny you coverage for your home if they find out you are using it for more than just your home.
The common theme with these above-mentioned items is the position it puts your insurance company in. Having a drained pool, a trampoline, a tiger, or a daycare (an alarming combination, especially when you put them all together) creates an environment in which the probability of your insurance company being on the hook for a claim is too high to insure.
Still, as each insurance company has its own underwriting department and thus its own way of handling these cases, owning these items is not a guaranteed dismissal. Here are a few scenarios you might expect:
You maintain insurance contract after you make some changes in your home. Some companies will ask you to make adjustments within your home to comply with their requirements. This could mean filling in the pool, putting a net around your trampoline, or excluding your pet from any liability coverage. Usually, they will give you a future cancellation date in order for you to make the necessary changes.
The insurance company issues you a non-renewal notice. In this case, you have until the end of your policy period to work with your insurance agent to find a new insurance company.
The insurance company cancels your policy (effective immediately). They might give you a few days to find a new one, but insurance companies can terminate your policy right away, if they wish – regardless of whether or not you are able to make any changes. If you have paid any premium in advance, you should be issued a prorated refund for the remainder of the policy contract.
It is important to consider the relationship among you, your property, and your insurance company. Insurers assume a portion of responsibility for your actions through your liability coverage, which gives them some right to assert the things they will and will not cover. Having an empty pool, a trampoline, a presumed dangerous pet, or a home-operated business can be considered too risky for your insurance company.
Despite this, you should always be honest with your insurance company in regards to your belongings as each company has its own operating rules. And some may even let you list some of these “risky” items on your policy. Keep it honest, and you will be in the best shape.
At Martin Insurance Agency, we represent over 30 different insurance companies with whom we can “shop” your homeowners insurance. Contact us today to see how we can help you find the right fit for your homeowners insurance.