Don’t let policyholders get burned this summer
It’s summertime and kids are splashing in the pool, chasing the dog in the backyard or jumping on the trampoline. If they’re not, then they’re asking, “Can we puh-leeez get a pool/dog/trampoline?!” But summer isn’t all fun and games. Trampolines, swimming pools and some breeds of dogs can translate into increased danger for policyholders and increased risks for agents.
Why it pays to be careful
Because of the likelihood of injuries and severity of potential losses that can come from these “attractive nuisances,” or potentially dangerous attractions that can draw others onto an insured’s property, many insurance companies are cautious when writing coverage for homes with certain breeds of dogs, swimming pools and trampolines. Some do not insure homes with trampolines or may exclude or require extra coverage for the items. It’s vital that agents understand why these restrictions are in place and exercise the same caution with their new and current policyholders, too.
Backyard dangers
Many property and casualty companies do not insure trampolines. The American Academy of Pediatrics (AAP) recommends trampolines aren’t used at home and reports that more than 100,000 children were injured on trampolines between 1991 and 2002. The resulting legal, medical, disability and insurance expenses exceeded $270 million. Approximately 71 percent of these injuries occurred at private homes.
Dogs are also a costly danger. According to the Centers for Disease Control and Prevention, there are approximately 4.5 million dog bites per year costing more than $1 billion. Property and casualty companies paid around $345.5 million in liability claims in 2002. As a result, many insurance companies don’t insure breeds of dogs known to exhibit vicious tendencies or any animal with a bite history. Certain breeds or cross-breeds that should raise a red flag include: American Stafford Terrier (or pit bull), Rottweiler, German Shepherd, Doberman Pinscher, Chow Chow, Wolf, Akita and Fila.
“A lot of these breeds may seem friendly when they’re with their owner. But if they need to be restrained when around people outside the household, we’re going to be concerned,” said Bill Fitzpatrick, senior vice president of personal lines at General Casualty. He noted that in addition to some dogs, some companies, including General Casualty and sister companies Southern Guaranty and Unigard Insurance Companies, don’t insure exotic pets, such as snakes, spiders or lizards, for similar reasons.
Swimming pools can also be a danger if not properly equipped. The Insurance Information Institute reports that every year about 43,000 people are injured in or around swimming pools. More than 300 people drown in backyard single-family pools every year. Insurance companies often require that a number of safety standards are met before insuring a pool, including:
- An in-ground pool must have a fence with a locking gate that meets individual state height requirements.
- An above-ground pool requires a fence that meets state height requirements, locking gate and lift-up stairs or removable ladder.
- Pool entrances must be locked when the pool is not in use.
- Pools with diving boards and slides must be at least nine feet deep.
- Pools must be well supervised when in use.
“Some children aren’t under parental supervision during the summer and are home alone during the day while their parents are at work. Lack of supervision can make pools and trampolines even more dangerous. Insuring proper supervision for children is the hardest requirement to enforce,” said Toni Rotz, vice president of personal lines for Unigard Insurance Company.
Security for the agent and policyholders
To protect the agent’s bottom line and ensure policyholders stay safe and receive the coverage they need:
- Inform policyholders about items that their policy doesn’t cover or their insurance company is cautious about insuring and explain the dangers that these items can pose. If an incident were to occur involving an uninsurable item, such as a trampoline injury or dog bite, it could be difficult for them to purchase insurance in the future or they could pay more for coverage.
- Remind policyholders to consult their homeowners policies and their agents before purchasing potentially dangerous items, such as pools, jet skis, all-terrain vehicles (ATVs), trampolines or pets.
- Keep up to date with policyholders’ purchases. Sometimes insureds don’t realize the insurance impact of their purchase or simply don’t remember to inform their agent. Many of these high-risk purchases are also highly visible, such as a trampoline or swimming pool in the backyard.
Stay safe all year long
In addition to these popular summertime activities, some insurance companies consider several other items high-risk. Some additional items that may affect policyholders’ coverage include:
- High-performance personal watercraft, including jet skis
- High-performance motorcycles
- ATVs
- Snowmobiles
- Exterior Insulation Finishing System (EIFS) synthetic stucco structures
- Log structures
- Wood-burning stoves
- Non-domesticated or wild animals kept as pets
If policyholders have purchased an uninsured item, contact an underwriter immediately. “Keeping high-risk customers off the books helps agents meet their loss ratio goals. Fewer losses can mean lower rates for all our policyholders and more stability for the agency,” said Rotz.
For more information please contact Anne M. Smith.