What Is Other Structures Coverage?
If you’re a homeowner, you know that your home insurance policy covers the exterior of your home. That’s called dwelling insurance, and it also covers attachments to your home, like a garage or porch. But what about structures on your property that aren’t attached to your main dwelling? That’s where other structures coverage comes in.
Other structures coverage specifically covers structures that are not attached to your house. That could include a detached garage, swimming pool, backyard shed or fence. This type of coverage comes standard in all basic home insurance policies. Keep in mind that other structures coverage is usually limited to certain residences. For example, a vacation home that you’re renting out through Airbnb may not be covered by insurance because most home insurance policies don’t cover short-term rentals. You’ll need a special policy for that.
How does other structures coverage work?
Other structures coverage protects detached structures from the covered perils that are listed in your homeowners insurance policy. Common examples of covered perils include fire, theft, vandalism, smoke damage, lightning and hail or wind damage. If a covered peril damages or destroys a structure on your property, the insurance company will reimburse you for the cost.
Like all types of insurance, your other structures coverage has a policy limit, which is the highest amount of money the insurance company will pay for a covered loss. According to the Insurance Information Institute, most insurance companies offer other structures coverage for 10% of your dwelling coverage. For example, if you have $300,000 in dwelling insurance, you would likely have $30,000 in other structures coverage.
Some homeowners have no detached structures on their property, while other people have multiple structures. If you have a separate garage, pool, patio or guest house the basic coverage limits for your other structures coverage may not be enough to provide adequate protection. For an added cost, you can increase your policy limit for more coverage.
What does other structures insurance cover?
Other structures insurance covers all of the structures on your property that are not attached to your main home. In addition to structures, it also covers certain home features like sidewalks and driveways. Here is a list of the structures that are covered:
- Detached garages
- Guest houses
- Pools and jacuzzis
- Pool houses
When it comes to swimming pools and jacuzzis, the rules around coverage tend to differ between insurance companies. For instance, in-ground pools are sometimes covered by your dwelling insurance, but it could also be covered under other structures. The only exception is for above-ground pools and jacuzzis, which are always covered by your personal property coverage.
Even if you don’t currently have any detached structures on your property, it’s still important to be familiar with your policy limits. If you did decide to build a fence in the future, or even upgrade your front walkway, you should ensure you have enough coverage in the event of a covered loss.
Limitations to other structures coverage
Other structures coverage protects your detached structures from the same perils that are listed in your homeowners insurance policy. Typically, that includes things like fire, theft, vandalism, lightning, smoke damage, wind and hail, weight of snow and ice and more. However, your insurance policy covers limited events. Here are some of the losses that aren’t covered:
- Flood damage
- Wear and tear
- Water damage
Standard homeowners insurance policies never cover earthquake or flood damage. You’ll need to purchase a separate policy in order to get coverage for that. You can usually purchase earthquake insurance though your homeowners insurance provider and flood insurance is available through the National Flood Insurance Program.
If you need to file a claim, you’ll either be reimbursed through actual cash value (ACV) or replacement cost value (RCV). ACV factors in the cost of depreciation while RCV reimburses you for the full value you originally paid for an item. RCV will increase your payout after a covered claim, but it will also raise your annual premium making ACV the cheaper policy option.
However, you don’t always have the option to choose between ACV and RCV. Some insurance companies may designate certain structures as one or the other. For example, your insurance company may only offer RCV for larger structures, like garages and sheds, and only offer ACV reimbursement for smaller items, like a mailbox. You can read your policy to learn about the specific limitations.
Can you remove other structures coverage?
Even if you don’t have any detached structures on your property, your insurance company will not let you remove the coverage from your policy altogether. However, that doesn’t mean you’re stuck paying for coverage you don’t need. Other structures coverage is automatically built into your home insurance policy, meaning you don’t pay extra for it. At the same time, not using your other structures coverage won’t lower your premium.
It’s also important to note that while you might not think you have any detached structures, you probably do. If you have a driveway, walkway or mailbox in front of your house, those are considered detached structures. Most people are unaware that small fixtures like a brick walkway are actually covered by their home insurance.
There’s also the possibility that you might add a detached structure to your home in the future. The insurance company includes this coverage in your policy so you can see how much damage would be covered if you experienced a covered loss.
If you’re looking for ways to save on your home insurance premium, you might be able to lower the amount of other structures coverage you have. Keep in mind that not all insurance companies allow this. If you can lower the amount, it will most likely still have to be a percentage of your total dwelling coverage.
There are many other efficient ways to lower your insurance premium. Most insurance companies offer discounts that are easy to take advantage of, like signing up for paperless billing, installing fire alarms and making certain home improvements to avoid a claim. If you can afford to pay more out-of-pocket towards a loss, you can also raise your deductible.