Good reminders from Money Magazine’s article from the June 30, 2016 issue.

 

For many Americans, the Fourth of July holiday means cookouts, family get-togethers, and a nighttime fireworks show. If you are putting on your own fireworks show for your family, friends and neighbors, your first thought should be about safety. Your second thought might well be about insurance.

In general, fireworks affect two different policies – your homeowner’s insurance policy and your health insurance policy. Injuries to yourself or your family are going to be covered by your health care policy. Damages to property and injuries to others will be covered under separate sections of your homeowner’s policy.

The medical payments section will cover injuries to other people caused by your actions – for example, if you are setting off fireworks with neighbors and one of their children is injured by an errant bottle rocket, their medical bills are covered under your policy.

The liability section handles the collective sources of damage, although the most obvious one is fire. It covers accidental damage to your own home, as well as damage to any other neighborhood homes – and for any resulting damage of spreading fires. Many areas in the West are banning fireworks by consumers because of extreme fire dangers caused by years of drought.

Lawsuits that are filed against you for fireworks-related issues are also covered under the liability section of your homeowner’s policy, whether the issues are with medical treatment, property damage, or both. Coverage amounts will vary, depending on the amount of premium you want to pay. You will also want to check for exclusions in the coverage – for example, are sheds or outbuildings covered, or damage to landscaping?

If you have larger assets that need to be protected from legal actions, you may want to consider an umbrella policy. These policies can be written to handle most situations and cover damages into the seven-figure range – obviously, that will come at the cost of higher premiums.