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What Homeowners and Renters Insurance Might Cover
A typical homeowners insurance policy has two coverages.
One is possessions: your home and its contents. The second is liability; this insurance covers you if you are responsible for injury or property damage to someone else (perhaps a friend or neighbor who was injured by the wrong fireworks).The latter type of coverage is generally available wherever your liability occurs in the U.S.
Rental policies are similar, but do not cover the physical structure of the home, only the contents of the home.
In 2021, the direct property damage caused by fireworks and firecrackers reached 59 million U.S. dollars, according to The latest data from the National Fire Protection Association.
Robert Passmore, vice president of personal lines for the American Property Casualty Insurance Association, an industry group, said the fireworks-related damage was likely caused by fires sparked by the fireworks.
In 2021, there were 12,264 reported fireworks-related fires in the United States, according to NFPA. 28% of all fires from 2014-18 were caused by report July 4th.
Passmore said homeowners insurance typically covers fire damage, whether it’s the house, patio furniture or other property. Policies usually have a deductible; the policyholder is usually liable for the first $500 to $1,000 in losses.
This is true whether the policyholder lights the fireworks or someone else, such as a neighbor or friend, does, Passmore said.
“This happens every year, and people need to be aware that it can cause a lot of problems, especially if they live in a wildfire-prone area,” Passmore said of the fireworks fires.
Policies may also cover other damage, such as cracked windows due to a misfired projectile, he added.
Fireworks-related injuries have also “increased significantly” over the past 15 years, with 10,200 reported in 2022, the NFPA said. Liability insurance may cover if the policyholder is legally responsible for such injuries, experts say.
Illegal discharge of fireworks and firecrackers shall not be covered
However, as is often the case with insurance policies, there are exceptions.
Insurance policies generally have exclusions. The fine print outlines the circumstances in which an insurance company does not pay a claim.
Insurers use exclusions more frequently, and the details vary from policy to policy, Kochenberg said.
For starters, a policy may not cover damage caused by deliberate acts, such as intentionally firing a bottle rocket at someone’s house, experts said.
In rare cases, the policy may also explicitly exclude coverage for fireworks, experts say.
You need to make sure that the fireworks you buy are legal in your state.
Peter Kulkenberg
Executive Director, Insurance Law Program, University of Connecticut
More likely, says Kochenberg: Your policy may not cover “improper or criminal conduct,” meaning the insurer won’t pay claims for damage or injury caused by illegal fireworks.
Coverage for situations related to fireworks will depend on the circumstances, the type of fireworks, how the fireworks are used and how state courts interpret the policy exclusion, he added. Such exclusions typically apply more frequently to liability claims and less often to personal property, Kochenberg said.
However, you can avoid the risk and uncertainty by using legal fireworks.
“You don’t want to be excluded because of wrongdoing or criminal behavior,” Kochenberg said. “You want to make sure that the fireworks you buy are legal in your state.”
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