Sparklers and Statutes: Managing Homeowner Risk This 4th of July
We are less than two weeks away from the 4th of July, and the temporary firework stands are already popping up in parking lots across the country. While fireworks are a quintessentially American tradition, they are also a leading cause of Homeowners Insurance claims in early July. Before you light the fuse, it is critical to understand how your policy views the “Red Glare” of backyard pyrotechnics.
- The “Illegal Act” Exclusion
This is the most important paragraph in your policy this month. Most homeowners insurance policies contain an exclusion for “Illegal Acts.” If you live in a municipality where certain types of fireworks are banned and you use them anyway, your insurer may have the right to deny your claim if a fire starts. If $$50$ worth of illegal bottle rockets causes $$50,000$ in roof damage, you could be left footing the bill entirely. Always check your local ordinances before you shop.
- The “Neighbor’s Nuisance”
What if your house is damaged by a firework launched from three doors down? In this scenario, your insurance will likely pay for the repairs under your “Fire” coverage, but your insurance company will then pursue the neighbor’s insurance for reimbursement—a process called Subrogation. If your neighbor is uninsured or their policy denies the claim due to the “Illegal Act” clause mentioned above, things can get legally complicated very quickly.
- Liability and the “Sparkler Myth”
Many parents view sparklers as “safe” alternatives, but they burn at temperatures exceeding $1,200^circtext{F}$ (hot enough to melt some metals). If a guest’s child is burned by a sparkler on your property, your Medical Payments coverage will handle the initial doctor’s visit. However, if the injury is severe and leads to a lawsuit, your Personal Liability limits are what protect your retirement savings and home equity.
This 4th of July, leave the big shows to the professionals. If you do host a backyard celebration, keep a bucket of water nearby, stay legal, and ensure your liability limits are at least $$500,000$.