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Holiday lawn decoration disaster? Check your home insurance

home insurance christmas lightsInflatable snowmen, twinkle lights and animated reindeer look great on your front lawn, rooftop or deck. But holiday decorations can quickly add up to costing hundreds -- even thousands -- of dollars, making them ripe for the picking by neighborhood vandals lacking the holiday spirit.

 If a lawn holiday decoration tragedy happens to you, don't panic.

 Dan Weedin, a Seattle-based insurance and risk management consultant with over 23 years experience as an underwriter and agent, says whether you put out one or 100 on your lawn, decorations are covered under your home insurance or renters insurance policy, up to the personal property limit listed on your declarations page. "They are protected for theft and vandalism just like any other personal property. The coverage is similar to that of a car or television if you're burglarized."

 Insurance claims today lead to higher rates tomorrow

But agents caution against submitting a minor claim for broken or stolen yard ornament. "There are many instances where you should think twice before turning in a home insurance claim," suggests Deborah Becker, a State Farm agent in Eau Claire, WI. "You should gauge the situation carefully because the financial reimbursement might not be worth the potential hit you could take in premium rates."

The dollar amount of your loss and your deductible should also factor into the decision to file what Becker calls a "small claim". Most homeowners insurance or renters insurance policies carry deductibles that range from $250 to $1,000. If the damaged or stolen decorations are valued at $2,000 and you have a $500 deductible, a claim might make sense. "But the opportunity to recover a few hundred dollars could cost you much more than that in the long run," says Becker.

Your claims history will help determine your home insurance premium. If you’re shopping around, an insurance company can access your claims through databases shared by insurers. "So recovering a few hundred dollars might not be worth paying that much -- or more -- additionally every year," says Becker.

 Too many "small claims" could also spur your insurer’s decision to not renew your home or renters insurance policy. "If you've had more than three in the past five years, it's smart to skip filing a claim for a holiday decoration loss," Becker adds.

Becker says a $100 to $500 payout isn't worth the possible long-term consequence of an insurance rate hike. Likewise, several claims in a short period can compel an insurer to decide not to renew your home insurance policy. "Consumers should save filing a claim against their homeowner's policy for a claim they can't financially recover from, like if a tree falls on the roof, a natural disaster, fire, etc.," he says.

Decoration or hazard?

Weedin says in addition to being the target of theft or vandalism, elaborate holiday displays may be a fire hazard, too. "That also plays into your insurance exposure," he says. 

Fire to your home or your neighbor's could also force up your premiums. "All those huge displays with electrical outlets all over the pace add more exposure than just higher energy bills. If any of them are damaged, frayed, or just bad, a fire to your home and neighbors is a real concern," explains Weedin.

His advice is to "decorate with care and follow all manufacturer's safety guidelines to reduce your chances of a tragedy."

Decorate to avoid an insurance claim

Want to reduce the chances your decorations will be damaged or fall victim to a Scrooge? Weedin says there are ways to reduce holiday decoration-related claims. "Keeping your home and decorations well lit, checking periodically to make sure they're secure and having neighbors take part in watching for suspicious behavior always helps [reduce] vandalism and malicious mischief," he says.

 And check the weather forecast. If high winds are on the horizon, consider not operating inflatable décor and instead placing a heavy object on top of the deflated item so it doesn't blow away or tear during a storm.

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