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Underage drinking is risky business for homeowners

(May 4, 2012) —Some parents enjoy planning celebrations for their high school-aged children, whether it's for a birthday or school-related event like prom or graduation, or a team or club gathering. Unfortunately these celebrations can also mean underage drinking. Some adults believe if they supervise drinking of young people in their homes, that's a better or safer alternative to unsupervised parties.

But is it? You may be trading one type of risk for another, with potentially serious consequences.

Your homeowners insurance policy protects you from many instances of fire, burglary and weather-related storms and may also protect you from civil liability that results from accidents that occur on your property. But don't assume your policy protects you from losses or civil liability that results from allowing the consumption of alcoholic beverages by an underage person on your property.

Many homeowners policies have a clause stating they won't cover losses that occur in this situation. Laws vary from state to state; and, according to the Drug-Free Action Alliance, a statewide, non-profit ageny working to prevent substance abuse, in some states you could be held liable even if you're aware of drinking being done at another location other than your home, and do nothing to prevent it.

Allowing an underage drinking party could mean an accident or property loss that could result in crippling legal expenses, lawuits and monetary judgments that may have to come out of your pocket. Your insurance company may also decide to discontinue your policy. This is in addition to the burden of having to live with the guilt and shame of knowing an accident or injury occurred because of your poor decision.

Protect yourself - and the young people who may take part - by saying no to hosting underage drinking parties, and encourage the young people in your life to obey the law and celebrate responsibly.

Be sure to speak with your insurance agent to review the specifics of your homeowners policy, along with the terms and conditions that could affect your coverage.

Based in Madison, Wis., American Family Insurance offers auto insurance, homeowners insurance, life insurance, health insurance, business and farm/ranch insurance in 19 states. American Family Mutual Insurance Company is the nation's third-largest mutual property/casualty insurance company. Web: www.amfam.com; Facebook: www.facebook.com/amfam; Twitter: www.twitter.com/amfam.