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Homeowners insurance protects your house and the personal property in it in case of damage from weather, theft, and all kinds of unforeseen circumstances. But should that policy include other structures coverage? And if so, just how much of it do you need?
This guide will dive into these questions and more.
Learn more about other structures coverage, as well as when it’s needed and what it can protect you from:
What is other structures coverage?
Other structures coverage, also called Coverage B by some insurers, is the part of your homeowners insurance policy that protects structures on your property other than your primary dwelling.
Typically, other structures coverage will protect your structures against any perils covered in your main homeowners policy. So if your larger policy covers things like fire, wind, theft, or vandalism, those protections would extend to other structures that exist on your property as well.
What are other structures in home insurance?
Lots of things can fall under the “other structures” umbrella, as long as they’re on your property and they’re detached from your main home.
Here are a few things other structures coverage might protect:
- Detached garages
- In-ground swimming pools
- Pool houses
- Retaining walls
Other items may be covered as well, so ask your insurance company if you have any other detached structures on your property you’d like to protect.
What is covered by other structures coverage?
Other structures coverage percentages vary by insurer, but typically, you can expect your policy to cover up to 10% of your dwelling coverage’s limits by default. So if your home is covered for up to $350,000 on your main home insurance policy, your other structures coverage would extend to 10% of that — or $35,000.
This $35,000 could be used to cover damage and repairs due to the following events:
- Burst pipes
- Falling objects (like trees, for example)
- Snow, ice, or sleet
- Electrical currents
As long as your main homeowners insurance policy covers the above, your other structures coverage should extend to those events, too.
What is not covered by other structures coverage?
Other structures coverage typically won’t apply to structures that you use for business. This means a structure you use for Airbnb or rental income or one you run your Etsy shop out of would not be covered in most circumstances. For these structures, you’ll likely need a separate business insurance policy to ensure you’re fully protected.
Additionally, a number of events (also called a covered peril by insurers) are typically off-limits on these policies as well. In most cases, your other structures coverage will not pay for damage due to:
- Flooding: If the flooding is due to a burst pipe, you’re usually protected. If it’s flooding due to rain or hurricane, though, you’ll need a separate flood insurance policy to cover that.
- Earthquakes: Earthquakes are similar to floods in that they require a separate type of policy. If you’re in a region that’s prone to earthquakes, talk to your insurer about getting this add-on coverage.
- General wear and tear or neglect: Damage that happens as a part of normal use or due to your own neglect isn’t covered by general home insurance nor other structures coverage. These should be considered part of the out-of-pocket maintenance costs of being a homeowner.
- Pests: These aren’t covered either. If your home’s in an area where pests may be a problem, consider getting on a regular pest treatment schedule to prevent infestations and damage.
All insurance companies vary, so talk to your agent about what is and isn’t covered. If there’s a certain coverage you need, you should be able to add it on for an extra fee. Remember to keep in mind what’s contained in your structures, too. If you have jewelry or other valuables in your outdoor shed or pool house, you may want to get extra personal property coverage to ensure those items are protected.
Learn More: How Much Is Flood Insurance?
Do you need other structures coverage?
If you have detached structures on your property, then typically, yes — you’ll need this type of coverage. In most cases, your insurance company will want you to have coverage for at least 80% of your other structures’ replacement value. Some insurers also automatically include this coverage as part of their basic home insurance policies.
In the event your insurer doesn’t require the coverage, you’ll want to take stock of your property. Are there any detached garages, sheds, gazebos, or other structures on your land? If so, what’s the total replacement value of each structure? Unless you’re prepared to pay that amount out of pocket should the unthinkable happen, purchasing Coverage B/other structures is probably a smart move.
How much other structures coverage do you need?
To determine how much coverage you need, you’ll first need to tally up the total replacement value of all your detached structures. If your insurance company requires coverage for at least 80% of their replacement value, do the math. Say your structures would cost $60,000 to fully replace. That’d mean you’d need $48,000 (60,000 x .80) in other structures coverage — at a minimum.
You’d then need to ensure you have the funds to cover any outstanding balance beyond that $48,000. If you don’t have the cash in savings to pay the additional $12,000 your $60,000 repair would require, you might want to consider increasing your other structures coverage just to be safe.
Other structures coverage policy limits
Typically, other structures coverage limits you to 10% of your larger dwelling coverage. This means if your main home is insured for up to $500,000 in replacement value, your Coverage B would offer up to $50,000 in protections for your other structures.
If that’s not an adequate amount given the replacement value of the structures on your property, you can always purchase additional coverage through your insurer. There are two ways to do this, and we’ll walk through each below.
What if you don’t have enough other structures coverage?
One option to increase your other structures coverage is to simply increase the overall coverage for your main dwelling. By increasing your homeowners insurance, other structures coverage increases in step.
If that’s not cost-effective (you can ask your insurance provider to price it out for you), you can also purchase additional coverage specifically for your other structures. This typically costs around $4 per $1,000 of coverage. So, if your structures required an additional $20,000 in coverage, you’d pay another $80 on your premium (20 x $4). Again, this varies by insurance company, so make sure to have your agent price this scenario out before adding on extra coverage.
Whichever route you choose, you can expect a higher premium for increasing your other structures coverage.
To make sure you receive the best pricing, get quotes from your existing insurer, and then shop around with other insurance carriers as well. Prices can vary from one insurer to the next, and many offer discounts, too (for bundling policies or having an alarm system in your home, for instance). Comparing your options is critical to getting the best coverage at the lowest rate.