Labor Day Safety and End of Summer Hazards Insurance Report 2021
BY MICHAEL GIUSTI
As summer comes to a close, Labor Day is a great opportunity to kick back, maybe take a trip, light up the grill, and to do it all while you are properly insured.
Whether the festivities are the traditional ones in the back yard, or the ones that feed your wanderlust, many come with risks that fall under insurance lines as varied as homeowner’s, renter’s, umbrella, auto, and even travel.
Understanding what goes into those policies will help end your summer on a high note if anything unexpected tries to rain you out.
Don’t Forget About the Insurance Risks in Your Back Yard
Lighting up the grill is perhaps the most iconic way to spend the Labor Day weekend. In fact, about seven in 10 adults own a grill or smoker, and according to the Hearth, Patio and Barbecue Association, 58% of grill owners plan to fire them up for Labor Day.
Whenever there is fire involved, the potential for disaster will follow. But thankfully if a flame jumps from a grill to a nearby structure, homeowner’s or renter’s insurance would be there to cover the damage.
But less obvious is what would happen if a guest gets hurt during that cookout. In these cases, homeowner’s and renter’s policies can come to the rescue too. Small injuries would be covered through the medical payments portion of the policy, while catastrophes would fall under the liability portion.
The medical payments portion of a homeowner’s or renter’s policy is a no-fault medical coverage, meaning that if someone is injured on your property, regardless of whose fault it is, your homeowner’s or renter’s policy can step in to cover a portion of their bill without them having to file a liability claim against you.
Medical payments policies are typically capped at $5,000 or less, meaning that if someone burns their hand or sprains an ankle, everyone is covered. It is important to know that this only applies if the injured person is someone who does not live in your household. If it was your daughter, then it will be up to your health insurance to pick up that bill.
Now, if the injury was serious and resulted in a larger claim – say someone fell off your deck, breaking both legs and couldn’t go to work for a month – this is where a liability claim would come in.
The liability portion of your homeowner’s or renter’s policy has a much more generous coverage limit – typically $100,000 or more. But keep in mind, a liability claim can only step in if the injury was the homeowner’s fault.
Also keep in mind that both the liability and the medical payments portion of the policy may decline to cover the claim if the injury was on purpose or involved illegal controlled substances.
A similar situation applies if you choose to fire off illegal fireworks. If the fireworks you shoot comply with local laws, but then land on your neighbor’s house, causing a fire, your homeowner’s policy would step in to cover that damage. However, if you are shooting otherwise illegal pyrotechnics, don’t expect your policy to protect you.
If you are looking at a particularly risky life – say you have a trampoline that all the neighborhood kids come and play on, or if your pool’s diving board is the must-do attraction, or even if you just have substantial personal assets and are worried you might be a tempting lawsuit target, an umbrella policy may make sense.
Umbrella policies are add-on policies that cover your liability over and above your other policies, and they protect you for $1 million or more in liability. They are also relatively inexpensive for the protection you get, often costing $300 per year or less.
Dog Bites and Alcohol Are Often Insurance Claim Culprits
It may not be obvious, but dog bites account for about a third of all homeowner’s insurance liability claims, and they can be substantial when they happen. According to the Insurance Information Institute, the average dog bite claim in 2020 cost $50,425!
One important caveat is that not all dogs are covered. Make sure your dog’s breed isn’t included in the insurance policy’s list of excluded dogs, or else you may be holding the liability yourself.
Another area of liability comes in if you are serving your guests alcohol and then letting them drive home. In many states there are laws called “social host liability” that say that if someone gets drunk on your property and then gets in a wreck driving home, you may be held responsible for their actions.
So, needless to say, if your guests overindulge, grab their keys and call them a cab or ride share. The consequences of driving under the influence are far more costly than paying for a ride.
Plus, if that guest gets pulled over and gets a DUI, the additional wreckage it does to their auto insurance premiums would be felt for many years to come.
Renting Out Your Property for Summer Fun Needs Insurance
If you decide to make a little extra money this Labor Day by renting out your home or your pool, it is best to understand the insurance implications.
New services, such as Swimply make it easy to rent out your pool for the day, and many pool owners are discovering they can earn some substantial cash by letting other people borrow their back yard oasis.
Before renting out your pool, though, take a look at your homeowner’s policy. In nearly every policy, liability stemming from a commercial use of your property is excluded, meaning that if you took money in exchange for someone using your pool, and then they slipped on the pool deck and broke an arm, you would be on the hook for that liability claim.
Going through a service, such as Swimply can help here, because they offer a $1 million liability guarantee for claims that happen while someone was using their service.
A similar situation applies for short-term home rentals. If you let another family use your house for a fee, your homeowner’s insurance becomes null. However, services, such as Airbnb offer their own $1 million guarantee if the worst happens while someone is renting your pad through their service.
The important takeaway here, though, is that if you decide you want to forego using these services and rent out your home or pool on your own, it would be best to consult your insurance agent first to make sure you get appropriate home insurance riders that would ensure you are properly covered if the worst happens.
On the Road Again…. with the Right Auto Insurance Coverage
The road trip is about as iconic a way to spend Labor Day as it comes. If that road trip involves a rental car, take a second to consider insurance. If you have your own auto insurance policy, start by knowing that it will almost certainly extend its coverage to your rental.
That said, it may still make sense to opt for the rental company’s insurance. That is because, while you would be covered if you backed into a tree, it might translate to years of higher premiums after your insurer pays for the damage. That extra $100 may have paid for itself relatively quickly if it meant that the $1,000 claim was covered and you didn’t have to face 20% rate hikes for years.
Whether getting additional coverage makes sense really comes down to your risk tolerance and your budget.
Either way, it is a great idea to do a video walk around of your vehicle before driving off the lot. Just pull out your phone and roll camera. That way, if the rental company comes back to claim you caused some pre-existing damage, you will have a better case to protect yourself.
If your trip is of the higher-end variety, trip insurance may make sense. Trip insurance is designed to reimburse you for any covered event that is out of your control, such as a weather event or a sudden illness or death in the family.
These policies reimburse you for your up-front costs. So, if you have to prepay for that beachfront condo or a cruise ship, trip cancelation insurance may make sense. However, if you are taking a road trip to grandma’s house, there won’t be many up-front deposits to justify buying trip coverage.
What trip insurance won’t cover you for is if you are worried that Florida is now a COVID-19 hot spot and now want to back out of your trip. Fear of travel is never covered by trip insurance unless you opted for the more-expensive “cancel for any reason” policy.
Do keep in mind that it is wild fire season in the West and hurricane season in Atlantic States and the Gulf South, so paying attention to weather conditions may be in order before heading out. But also know that if you opt for travel insurance, you likely have to book it shortly after paying the deposit on your trip. If you paid for your trip in April, but now are watching a disturbance in the Gulf of Mexico, it is likely too late to buy a travel insurance policy to protect you.
Look Back on Your Summer with Confidence
Everyone is ready for a little relaxation this Labor Day. Whether it is a back yard cookout, a poolside retreat, or even an iconic road trip, understanding risk, and the insurance policies that mitigate those risks, can be the difference between a lazy end-of-summer weekend and an unmitigated disaster.