Home Insurance

So you want to get a pool. Here's what it will do to your home value and insurance premiums

By: Desirae Odjick on May 10, 2017
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Even though we Canadians have a woefully short season in which outdoor water isn’t frozen, that doesn’t stop us from spending on pools, ponds, and waterfront properties.

If anything — and I think everyone who’s enjoying the spring weather as much as I am will agree — our shortened season makes us treasure our open-water activities even more. It’s no surprise that adding a pool or a pond to your backyard might be on your mind right about now.

But before you grab a shovel and start DIY-ing a backyard pond oasis, let’s talk about the two things that should be top of mind whenever you undertake home renovations (and yes, landscaping more than qualifies): insurance rates and home values.

Also, don’t dig your own backyard pond, I guarantee you that won’t go well. Call a professional.

Will adding water to your backyard impact your insurance rates?

Since I’m no insurance expert, I turned to Jennifer Beck at belairdirect with my laundry list of curious homeowner questions about water and your house. Specifically, I wanted to know if the backyard water oasis of my dreams would send my insurance rates sky-high.

“Ponds can have an impact on insurance premiums most likely due to liability and other risk conditions,” she says. “Ponds (similar to swimming pools) can have an increased risk of people injuring themselves or drowning, or attracting unwanted trespassers to whom you may still have a legal responsibility.”

“For this reason, some insurers may choose not to accept the risk at all, while others may do so with an increased liability premium.”

Ponds (similar to swimming pools) can have an increased risk of people injuring themselves or drowning , or attracting unwanted trespassers

So not only will my dream backyard raise my premiums, it might disqualify me from insurance altogether? Good to know. I asked Beck to dig a little deeper into what, specifically, could raise the insurance rates I’d hopefully still qualify for, to help get a bit more clarity.

“The general rule to consider is that the more an item costs in terms of labour and materials, the greater impact on the premium will be,” she says. “The cost to replace a pool in terms of labour and material is most likely greater than the cost to replace a pond.”

This isn’t altogether surprising, since as with any renovation, if you’re pouring money into your house (or in this case, a hole in your backyard) it’ll cost more to replace in the worst-case scenario.

How can you protect yourself if you’re buying a backyard with existing features?

If you’re evaluating a property that has existing water features in the backyard, because you’re fancy like that, Beck also recommends you get clear on the details of your new backyard water feature during the home inspection.

She recommends asking the following questions during your home inspection:

  1. Should the pool or water feature leak, has the lot been graded to disperse the water away from the home as not to cause damage?
  2. If there were to be a leak, where would the water flow and what might get damaged as a result?
  3. Are there specific instructions with regards to winterizing the pool or water feature? And, how do you regularly maintain the feature?
  4. When installed, were there building permits required and have they been signed off by the local building inspector?
  5. Does the installation conform to all current local building codes and bylaws?

And last but not least, what will this do to your home values?

So sure, you want a pool or a pond, but will future buyers of your home care enough to pay a premium for your house because of it? To find out, I turned to Randy Richardson, a certified home appraiser and owner of Richardson Real Estate Ltd.

“Water features don’t add value,” said Richardson via email, wasting no time at all dispelling our dreams of increasing our home’s value with a lovely koi pond. But it’s not all bad news!

“They make for better salability, and therefore shorter marketing periods. Generally, in negotiations, the buyers are willing to accept its existence but not pay for it, knowing that an owner won’t pay the added cost of removing it.”

As for pools, Richardson’s best advice is to understand your home and its place in the market before making any rash decisions.

Water features don’t add value, said Richardson via email, wasting no time at all dispelling our dreams of increasing our home’s value with a lovely koi pond

“Pool-fanciers are usually larger families or people who need to impress,” he says. “ Most two or three bedroom homes are over-improved by adding a pool, whereas a 4-bedroom home in a family district will benefit from having a pool — as will an expensive custom design.”

If you’re still considering a pool in your immediate future, Richardson has some further advice when it comes to who really benefits from a pool.

“My experience has seen swimming pools used by children 7 to 13, after which time the children graduate to other interests and the pool sits idle — at which time the properties generally are sold.”

Bottom line: your backyard is for you, not your resale value

If you’re reading this and you’re still gung-ho about the idea of a backyard pond or pool, power to you!

You’re now going into this with a clear idea that yes, your insurance rates will likely go up by adding water to your backyard in any way, shape, or chlorine-scented form, and that your resale value isn’t likely going to reimburse you for the cost of your oasis.

And also, since it just snowed in May (in Ottawa, at least), you’re probably well aware it’s only going to be usable for two months of the year.