If you own separate structures like a detached garage, pool house, shed, or guest home, it’s crucial to understand how your homeowners insurance covers these structures. Imagine this: you’ve just added a stunning pool house, perfect for relaxing summer afternoons and lively gatherings. But when a storm rolls in and damages the roof, you discover that your insurance only covers a fraction of the repair costs. Why is that?
Many standard homeowners insurance policies allocate a limited percentage, often around 10%, of your dwelling coverage for detached structures. This helps insurers manage risk while keeping premiums more affordable. However, if you had opted for increased coverage, your beloved pool house could have been fully protected.
This scenario reveals why it’s essential to review your insurance policy to confirm that all your structures have adequate coverage, so you’re not caught by an unwelcome surprise!
What Are Separate Structures on Your Property?
Separate structures, often referred to as other structures in homeowners insurance, are buildings or constructions located on your property that are not physically attached to your home. Understanding what qualifies as separate structures is important to ensure you have adequate insurance coverage. Separate structures can include:
- Detached garages
- Sheds
- Guest houses
- Fences, gazebos, or pergolas
- Workshops or barns
- Pool houses
- Greenhouses
- Driveways
- Carports
If you’ve built a workshop on your property to store valuable tools and equipment for your home projects, it’s essential to know how your homeowners insurance covers these structures. For example, imagine a scenario where a tree falls during a storm, damaging your workshop and ruining your high-value tools inside. This highlights the importance of understanding separate structures insurance to protect the things you love. Let’s dive into the specifics of what a standard home insurance policy may cover and how to get the right coverage for your property.
Does Homeowners Insurance Cover Separate Structures?
Typically, standard homeowners insurance policies offer coverage for separate structures, but this coverage is often limited to a percentage of your dwelling coverage, usually around 10% of your total dwelling coverage. For instance, if you insure your home for $400,000, your separate structures might have coverage up to $40,000. Still, this coverage might not be enough if you have larger or more valuable structures, like your handy workshop or luxury guest home.
When Should You Consider Additional Coverage?
There are a few situations where the standard coverage for separate structures may fall short. You should consider increasing your coverage or adding endorsements if:
- Valuable Structures: If your detached garage or guest house would be expensive to replace, 10% of your dwelling coverage might not suffice.
- Business Use: If you use any of these structures for business purposes (such as a home office or workshop), you’ll likely need additional business property insurance, as a standard homeowners policy typically doesn’t cover business-related damages.
- Renovations: If you’ve recently upgraded any of your structures, make sure your policy reflects their increased value.
How to Ensure Adequate Insurance Coverage for Separate Structures
- Evaluate the Value of Your Structures: Take an inventory of all your separate structures and estimate how much it would cost to replace each one. Be sure to factor in any custom features or upgrades.
- Review Your Policy: Check your homeowners insurance policy to see the current coverage for other structures. If it’s not enough, speak to your agent about increasing the limit.
- Consider Policy Endorsements: Depending on the value of your structures, you may want to add endorsements to ensure full coverage. These endorsements can cover specific high-value structures individually.
- Special Uses: If you’re renting out a guest house or using a structure for business purposes, you’ll likely need additional coverage or a separate commercial policy.
Common Exclusions for Separate Structures
Yet, even if your separate structures have enough coverage under your homeowners policy, some exclusions and limitations still apply. That’s why it’s important to regularly maintain your separate structures, weigh out your risk for natural disasters or acquire a business policy if needed. Here’s why:
- Wear and Tear: Insurance policies won’t cover damage from regular wear and tear. Ensure that you maintain your separate structures to avoid issues.
- Natural Disasters: Flooding and earthquake damage are often excluded from standard homeowners insurance policies. If you live in a high-risk area, consider adding flood insurance or earthquake insurance.
- Business Equipment: If you run a business from a separate structure, your homeowners insurance might not cover your business equipment or inventory. For that, you may need business property insurance.
Because standard homeowners insurance usually doesn’t cover business equipment or inventory, you could lose valuable items if something happens.
Why Ensuring Your Separate Structures Are Properly Insured is Crucial
Ensuring that your separate structures are adequately insured is essential for protecting your precious investments. By taking the time to evaluate the value of your detached buildings, reviewing your homeowners policy, and discussing your needs with your insurance agent, you can avoid costly surprises when disaster strikes. If you have any questions or need help, you can call a YourPolicy agent at (866) 236-0203.
Frequently Asked questions (FAQ)
Interested to know more about insuring your separate structures?
Does it cost more to insure separate structures on my property?
Yes, it may cost more to insure separate structures depending on their value and use. Standard homeowners insurance covers about 10% of your dwelling coverage for separate structures. However, higher-value structures or those used for business may require additional coverage, increasing premiums.
How to Insure a She-Shed
Insuring a she-shed involves including it under your homeowners policy’s “other structures” coverage. If it’s used for personal enjoyment or as an office, consider increasing coverage to reflect its value or adding endorsements for adequate protection.
How to Insure a Property Workshop
For personal use, a workshop can be insured under the “other structures” portion of your homeowners policy. If it’s used for business, additional business property insurance or a commercial policy may be necessary for full coverage, protecting tools and liability risks.
What constitutes as a detached structure?
A detached structure is any building on your property that isn’t connected to your main house, such as a shed, guest house, or detached garage. Separate structures are typically covered by the “other structures” section of your homeowners policy.
Is my guest home a separate structure or is it included in my home policy?
A guest home is usually considered a separate structure if not attached to your house and falls under “other structures” coverage. If used for business or rental purposes, additional coverage may be required for adequate protection.
What is separate structures insurance?
Separate structures insurance is part of your homeowners policy that covers buildings like sheds, detached garages, and fences. It typically provides 10% of your dwelling coverage but can be increased for high-value structures or specific uses.
How to calculate other structure coverage?
Other structure coverage is generally 10% of your dwelling coverage. For instance, if your home is insured for $300,000, your separate structures would be covered for up to $30,000. Increase coverage if you have high-value structures.
What is the limit of liability for other structures?
The limit of liability for other structures is typically 10% of your dwelling coverage. For a home insured at $400,000, your other structures would be covered for up to $40,000, but you can raise this limit if needed.
What is a building vs. outbuilding?
A building refers to any structure on your property, while an outbuilding is specifically a detached structure like a shed, barn, or garage. Outbuildings are covered under the “other structures” section of your insurance.
Is a garage considered other structures?
Yes, a detached garage is considered an “other structure” under homeowners insurance. Items like fences, in-ground pools, and sheds also fall under this category. Attached garages are covered under the dwelling portion of the policy.
Is a patio considered another structure?
Yes, a detached patio is considered an “other structure” in homeowners insurance, similar to detached garages, sheds, and decks. These structures are covered separately under the “other structures” section of your policy.
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