Other structure insurance

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In a standard homeowners insurance policy, the dwelling coverage refers to the main structure of a home. For detached garages, sheds and even swimming pools, other structures coverage is designed to insure structures that are not directly attached to the main building. The amount of this coverage, as well as what constitutes an “other structure,” can help you make sure you have the best homeowners insurance for your home.

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. Average homeowners policies are broken into several parts, including the following:

Other structures on your property (anything not connected to the house itself) are generally covered for around 10%-20% 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 range from $30,000 to $60,000, depending on the limits set by your home insurance company. 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 require 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 an HO-3 or HO-5 home insurance policy, your other structures coverage is likely “open perils.” This means that any peril that is not specifically excluded in the policy is covered. Two notable common exclusions 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 garage 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:

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

If you are in the process of building another structure on your property, your homeowners insurance other structures coverage may also cover the lumber and other materials that will make up the new structure.

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 purposes.

How much other structures coverage do you need?

A standard homeowners policy will typically include coverage for other structures at 10% of the dwelling coverage on your policy. This amount is automatically included whether you have detached structures on your property or not.

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 over the coverage limit on a claim to whatever is necessary to replace the structure.

Other structures: ACV vs RCV

It is worth checking with your agent to see if the other structures coverage in your policy is actual cash value or replacement cost value.

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 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 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 doesn’t exceed the coverage limit of your other structures coverage, whether that’s the standard 10% or if you purchased increased limits.

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 structures coverage required?

Other structures coverage is not one that is required by law, but insurance companies include it as part of their standard homeowners insurance policy. However, if you have a mortgage on your property, your lienholder may require you to have a homeowners insurance policy with other structures coverage.

Is a pool considered an other structure?

How your homeowners insurance covers swimming pools will largely depend on the insurance company and the type of pool you own. Above-ground pools (or any pool that is considered portable) may be included in personal property coverage, while in-ground pools (which are considered a more permanent fixture) are typically included in other structures coverage. Any injuries sustained by guests as a result of the pool may fall under liability coverage. The best way to understand how your pool is covered is to talk to your home insurance company.

Is it possible to increase other structures coverage?

If you feel that the current other structures coverage amount is not enough, there are ways to increase the amount. Other structures coverage is typically calculated as a percentage of the dwelling amount, but if that percentage would not be sufficient to cover an outbuilding, most insurance companies will allow you to increase the other structures coverage amount or specifically schedule the outbuildings.

I have belongings in my outdoor shed or separate garage. How are they covered?

The other structures coverage in your homeowners policy is specifically for the structure itself. Anything within it is still covered by your personal property coverage amount. If you run a business and store work equipment inside the structure, you will want to ensure that you have a home business policy endorsement to cover your belongings, as the personal property coverage on the homeowners policy is generally only for personal belongings.