The average property damage homeowners claim costs $13,687 with a frequency of 5.53 claims per 100 policies. If a claim happens causing property damage to your home, are you covered? The basic homeowners insurance policy offers dwelling coverage, personal property coverage and liability insurance. Optional insurance, like other structure coverage, protects structures not directly attached to the dwelling, like a shed, detached garage, fence or swimming pool. Choosing the right homeowners insurance company and coverage options is the best way to protect your home and the structures on your property.
What is other structures coverage?
Other structures coverage is usually part of your standard HO-3 homeowners policy — the most common type of policy in the U.S. Your average policy is broken into several parts, including the following:
- Dwelling, or hazard insurance, which covers your home
- Other structure insurance
- Coverage for your personal belongings
- Liability protection in case someone is hurt while on your property
- Additional living expenses, if you had to leave the home while it was being repaired
Other structures on your property (anything not connected to the house itself) are generally covered for around 10% of the total insured value of your home. So if your home is insured for $300,000, the maximum you could receive as a claim payout for damage to another structure on the property would be $30,000. However, if you need more coverage for other structures, you can increase the amount independently for a nominal cost.
Other structures coverage is not required by law in any state, but your mortgage holder may want you to have it if you have unattached structures on your property. You make a claim on this portion of your policy as you would any other claim — either with a phone call to your agent or by way of your insurer’s online claims management system.
If you have a standard policy, coverage for other structures is related to a list of named perils. These generally include:
- Fire and lightning, along with smoke damage
- Wind or snowstorm, hail, freezing, and the weight of ice, snow or sleet
- Aircraft or vehicles
- Vandalism or theft
- Falling objects
- The accidental overflow of water or steam
- Accidental tearing, burning, or cracking
- Sudden damage cause by short circuiting
Two notable exceptions to this list are flooding and earthquakes or mudslides. Average policies do not cover these perils, and if you live in a flood zone or a region where earthquakes are common then talk to your agent about purchasing a rider or separate policy to cover you.
Your other structures are also not covered for normal wear and tear to the buildings or for gradual water damage, such as seepage from a spring that slowly rots out a wooden foundation. Pests such as termites or other damaging insects are also not covered.
What are other structures on homeowners insurance?
What are considered other structures on a homeowners insurance policy? First of all, any structure that is attached to your home, whether a fence or an enclosed porch, is covered under basic dwelling insurance. The limits mentioned above do not apply to a claim made for an attached structure.
Other structures are defined as anything that is not attached to the home, including:
- Detached garages
- Permanently installed pools, in-ground or above-ground
- Guest houses or in-law structures
- Mailboxes or light posts
- Detached patios or decks
If you are in the process of building another structure on your property, your homeowners insurance other structures coverage should be applicable to the construction materials as well.
One caveat: if you are using a structure on your property for business purposes then you will want to talk to your agent about getting a rider, whether a shed was turned into an office or you are renting out an in-law apartment on Airbnb. A business or rental rider, or endorsement, on your policy will be necessary to cover any structures that are used for business.
How much other structures coverage do you need?
Your insurer assumes that your other structures are not worth as much as your home and thus that they are appropriately covered by 10% of the value of your policy.
So what can you do if you have a structure that is worth considerably more? Perhaps your writing retreat has expensive options, extensive wiring and plumbing and more. If so, a chat with your agent is in order, because most insurers will allow you to increase your other structures coverage if you need to. You may also opt for guaranteed replacement cost value, which allows you to be paid a certain percentage over the coverage limit on a claim.
Other structures: ACV vs RCV
If you file a claim for other structures based on actual cash value, depreciation and wear and tear can be used to diminish the amount the insurance company will pay on the claim. For example, if your 20-year-old shed needs to be rebuilt, 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 and it cost you $3,000 then — but now it will take $15,000 to rebuild, then you would get a check for $15,000, minus your deductible, and only if that amount isn’t more than 10% of your insured value.
The tricky part, however, is that with some insurers, even if your home is covered with replacement cost, the other structures coverage may only be covered at actual cash value. The only way to know for sure is to check out all the fine print on your policy documents or talk to your agent.
Frequently asked questions
Is other structure coverage required?
No, not by law. But if you carry a mortgage on your property, your mortgage lien holder may require you to have a valid homeowners insurance policy with other structure coverage for as long as the mortgage is active.
Is a pool considered an other structure?
Sometimes. Some insurers include above-ground pools in their personal property coverage, along with your other belongings. But in-ground pools are usually included in other structure coverage.
What about driveways? Are they included in other structures?
Yes, generally they are. If your driveway is damaged in some significant way, you should be able to file a claim under your other structures coverage. If your driveway is very long or expensive, you may want to increase your coverage so that you’re able to replace it if something should happen to it.
Is the shed where I keep my landscaping business supplies covered under other structures insurance?
If you are using a structure on your property for business purposes, you’ll need an endorsement, or add-on, to your policy to cover it. This includes private structures that you rent out as well.