Homeowners insurance for other structures

A standard homeowners policy consists of several coverage types. The “dwelling” portion of your policy, for instance, provides coverage for the main structure of your home. But for items on your property that aren’t directly attached to your home, such as detached garages, sheds and fences, the “other structures” portion — sometimes called Coverage B — likely provides coverage up to a certain amount. Understanding how the different parts of your homeowners policy work together may help you feel more confident in choosing the right coverage for your needs.

What is other structures coverage?

Other structures coverage is part of your standard homeowners policy — the most common type of homeowners insurance. Standard homeowners policies are broken into several parts, including the following:

• Dwelling coverage: This covers the main structure of your home and any attached structures, like a deck or porch.
• Other structures coverage: This offers coverage for physical property not attached to your home, like a detached garage, fence or shed.
• Personal property coverage: This coverage includes personal items like furniture and clothing.
• Liability coverage: This coverage typically pays for injuries or damages for which you are legally liable, as well as legal fees.
• Medical payments coverage: This coverage may help pay for medical expenses if a guest is injured on your property, but you are not legally liable.
• Additional living expenses coverage: Additional living expenses coverage, also known as loss of use, is designed to cover housing, food and transportation expenses while you are displaced. This may be necessary in the event of a covered peril where you have to leave your home while damage is being assessed or fixed.

Other structures on your property are generally covered for up to 10 percent of the dwelling coverage amount listed on your homeowners insurance policy. For example, if your home is insured for $300,000, other structures would be listed at $30,000 on your homeowners insurance policy.

If you have high-value detached structures on your property, you may be able to raise your other structures coverage percentage. Some companies even offer a 20 percent coverage option as standard. Although increasing your coverage will likely increase your cost of homeowners insurance, additional coverage could provide you with extra peace of mind.

If you have an HO-3 or HO-5 home insurance policy, your other structures coverage is likely automatically included, and it is probably written on an “open perils” basis. This means that any peril not specifically excluded in the policy is covered.

Two notable common exclusions are flooding and earthquakes. Standard policies do not cover these perils, so you may want to ask your agent about purchasing a rider or separate policy. Some other exclusions may include normal wear and tear, insect damage and gradual water damage (such as wood rot caused by seepage).

Learn more: How to buy flood insurance coverage

What is considered an “other structure”?

Other structures in home insurance are defined as anything not attached to the home but on your property. A standard home insurance policy may be sufficient to cover your other structures, but if you have several, you might need to increase your coverage. 

Other structures may include:

• Gazebos
• Detached garages
• In-ground pools
• Sheds
• Guest houses or in-law structures
• Mailboxes or light posts
• Detached patios or decks
• Fences
• Driveways

One caveat: if you are using a structure on your property for business purposes, it may not be covered under your standard homeowners policy. Something as simple as a shed converted to an office may need an additional rider in certain cases. The same applies if you rent out an in-law apartment or accessory dwelling unit through a vacation rental service like Airbnb. In these instances, you may want to speak with your insurance agent about a business or rental rider to ensure that you are adequately covered.

How much other structures coverage do you need?

A standard homeowners policy typically includes coverage for other structures at 10 to 20 percent of the dwelling coverage on your policy. This amount is usually part of the policy  whether you have detached structures on your property or not.

What if you have a structure on your property that is worth more than your coverage limits? For instance, maybe you own a large detached garage with indoor plumbing and electricity. In this case, you may want to speak with your insurance agent to discuss increasing your separate structures coverage.

Learn more: How much homeowners insurance do I need?

Other structures: ACV vs RCV

It may be worth checking with your agent to see if the other structures coverage in your policy is based on actual cash value (ACV) or replacement cost value (RCV).

If you file a claim for other structures based on actual cash value, depreciation and wear and tear can affect your claim payout amount. For example, if your 20-year-old shed needs to be rebuilt due to a fire, the insurance company may only pay for the value of the aged shed.

Replacement cost value, on the other hand, pays you what it would cost to build a new shed, regardless of the actual value of the burned building. So if you built that shed 20 years ago for $3,000, but now it will take $15,000 to rebuild, then you would get a check for $15,000, minus your deductible (if that amount doesn’t exceed the coverage limit of your other structures coverage). Adding a replacement cost value endorsement may not afford you the cheapest homeowners insurance, but it could provide more robust financial protection.

It is important to note that some insurers may only cover other structures at actual cash value, even if your home is covered with replacement cost coverage.

Frequently asked questions