Picking the right insurance for summer
Woo-hoo! Winter has become a distant memory, and it’s time for backyard pools, boat rides and road trips. But before you take a dip, go out on the open water or take your brand-new motorcycle for a spin, be sure you and your loved ones are covered in the event of a summer mishap.
It’s important to evaluate your insurance needs for the season of sun and fun, says Lynne McChristian, Florida representative for the Insurance Information Institute.
“Safety does not take a summertime break,” she says. “That includes knowing your risks and considering your insurance coverage and liability.”
“I don’t think the vast majority gives (insurance) a thought,” adds Bill Wilson, director of the Independent Insurance Agents & Brokers of America’s Virtual University.
But that majority doesn’t have to include you. Here’s what you’ll need.
Pool insurance to keep you afloat
It may offer refreshing breaks from scorching summer heat, but a sparkling backyard pool can put you in the financial deep end if you don’t have the right amount of insurance.
Regular homeowners insurance may not provide enough coverage for a pool, and some policies may even exclude pools, says Kevin Smith, a spokesman for Allstate.
Pools can be dangerous, so they increase your liability risk because you stand a greater chance of being sued or having to pay someone’s medical expenses. Nearly 400 children under 15 drown each year in pools and spas, according to the U.S. Consumer Product Safety Commission.
Boost your liability coverage when you put in a new pool, Smith suggests. And consider an umbrella policy, which increases your liability coverage beyond what you have on other policies.
“For instance, a few hundred dollars a year may allow you to get up to $1 million in additional liability protection beyond your existing auto and/or property insurance coverages,” Smith says.
Before installing a pool, review the standards and codes where you live. Those could include requirements for safety equipment, such as fences and locks.
It’s not just any ol’ car
A classic car waiting in the garage for its chance in the sunlight demands separate and special auto insurance because of its limited use and higher value.
Insurers offer agreed-value or stated-value policies:
- Agreed-value means you and your insurer agree on what the car is worth. In case of loss, the company will pay you the full amount on the policy, minus your deductible.
- Stated-value policies leave your classic car’s value open to interpretation by the insurer, according to the Insurance Information institute, which adds that these policies are rarely sold.
See if your insurer has the resources to help find rare parts and mechanics with the know-how to handle any damage to your baby. Ask if you’d be able to send the car across state lines to the garage of your choice.
Liability coverage is especially important with collector cars, which may have small windows or lack mirrors, making them more difficult to drive, notes Jay Quail, executive director of the Classic Car Club of America.
Boat coverage from stem to stern
If you buy a watercraft for summer fun off dry land, you’ll find yourself taking on a boatload of risk.
Home insurance or renters insurance may provide all the coverage you need. But the Insurance Information Institute says for larger and faster boats, or personal watercraft — like Jet Skis — you’ll need a separate marine policy.
Your premiums will depend on your boating background, type of boat and where you’ll use it.
What this all means is that sailboats cost less to insure than riskier speed boats.
The National Boat Owners Association says your age, credit history, driving record, boating certifications and whether you own or rent a home can affect your policy cost, too.
You can keep tabs on your credit for free at myBankrate.
Proper boat insurance will pay if your boat is accidentally lost or damaged and will cover damage or injuries to others, as well as your legal costs, if someone takes your boat for a joy ride without permission.
Easy ridin’ the right way
Thinking about buying a motorcycle to rev up your summer recreation? Weigh your coverage options first.
All motorcyclists are required to have liability coverage for property damage and bodily injury that they may cause in an accident, Allstate’s Smith says. Check with your agent to see if that coverage also would protect passengers on your bike.
In Northern states, bike owners who ride mostly during the warm-weather months may be able to get what’s called a “lay-up” policy, which suspends all coverage during the winter except for comprehensive. That can help cut the cost of insurance.
But a part-year rider may want to consider full-year coverage anyway, even though comprehensive covers nonaccident damage, such as from fire, vandalism and theft.
“A 12-month policy is priced to reflect the length of the riding season and risks during the nonriding season for each state,” says Smith.
Your accident history, where you ride, your age and how you store the bike all affect your motorcycle insurance premiums. Discounts are available if you’ve taken a safe-riding course, are a member of a motorcycle organization or club, or if you own more than one bike.
Hit the road with the insurance you need
What’s more iconic than a summer road trip? But when you go to rent that convertible, be sure you understand what your own auto insurance covers before you accept the rental company’s policy.
The insurance sold at the rental counter typically includes, among other things, liability protection for lawsuits, personal accident insurance for medical or ambulance needs, and personal effects coverage for theft of your belongings in the car, says the Insurance Information Institute.
You may not need all of that. Check your auto policy and your credit card agreement, which may provide some car rental coverage.
If a rental is damaged, will you have to pay upfront for repairs and wait for reimbursement, or will your insurer cover the costs right away?
“That’s a huge issue, and if you are ever caught in it where you decline the car rental company’s insurance, thinking you are covered and you find out you are responsible for paying thousands of dollars in costs, that’s a huge reality check,” says Cynthia Brough, a consultant and former national spokeswoman for auto club AAA.
Crossing into Canada or Mexico? Look into insurance requirements and whether you need to take proof of coverage.
That home away from home
Renting out your home for vacation use can be cost-effective for everyone involved.
Thanks to Airbnb and similar sites, vacation rentals are growing in popularity. Insurance requirements vary considerably, depending on the length and frequency of the stays.
Some insurers may allow a short-term rental (a week or several weekends) of your primary home under your home insurance policy. Other insurance companies may require additional coverage.
For longer rentals, you’ll need a landlord or rental-dwelling policy, which can cost 25 percent more than a standard policy. But you’ll get more protection against property damage and liability.
Regular rentals, whether short- or long-term, won’t be covered by your homeowners insurance. You’ll have to buy the sort of business policy appropriate for either a hotel or bed-and-breakfast, according to the Insurance Information Institute.
If you’re renting someone else’s home as your own summer vacation lodging, talk to your agent about whether your own home insurance covers damage or theft where you’re staying. If you book through an online vacation listing website, it may offer a property damage policy as part of the package.
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