I consider myself lucky to live in close proximity to Lake Carasaljo in Lakewood, NJ where the annual fireworks display is held in honor of Fourth of July. This year, as I started my trek towards the specially designed site together with a friend, I was notified of an unfortunate episode.
"I heard that someone living in the vicinity of Pamela Ct in Jackson, NJ experienced a loss due to fireworks set off earlier in the day," my friend confided.
"What happened?" I asked.
"The homeowner that suffered the loss had a shed in her backyard that stored cans of paint," continued my friend. It seems that a spark from the fireworks lit by a neighbor landed on the shed and the flammable matter exploded along with the shed that housed it! "
"Who will pay for the damages? I asked." Will it be the insurance company or an out of the pocket thing for the guy that is responsible? "
"In case you do not remember," explained my friend, "individual use of fireworks is prohibited in the state. So no one came forward admitting to liability. to approach the shed owner. "
The conversation ended in silence as we walked between the throngs gathered to witness the spectacular show of lights set off by the professional pyrotechnics company on the national holiday that commemorated America's victory of independence.
Later that evening, I contemplated the situation.
It was more than likely that the homeowner that incurred the loss would get compensation from her own home insurance because she was a totally innocent victim. In the same vein, should get coverage from her auto policy if damage was related to her car.
From my own knowledge, incidental fire damage resulting from firearms is covered in states where it is a legal activity – even if the fireworks originated from the homeowners own driveway or lawn. The same goes for losses or injury from an accident resulting from defective fireworks.
The only exception in places where individual fireworks are permitted is if the damage or injury was caused intentally. Standard homeowners insurance does not cover these instances.
But here's the problem even if your homeowners insurance covers a related event: it will only cover up to the limits on your policy!
The other alternative for those that determine they need more protection is a personal umbrella policy. This type of coverage will kick in after your home insurance meets its limits and provide you with more coverage so you will not be left with a hefty out-of-the-pocket bill.
Of course firearms use is prohibited to the individual in the state of NJ. But the same concept can be applied to any other event.
In the meantime, celebrate the freedom of insurance choices while you celebrate America's Independence Day!
