When you buy homeowners insurance, your primary objective is to protect your house itself. Numerous hazards, such as fires, severe weather, falling trees and vandalism, could damage the house, cause massive repair bills and cause a lot of inconvenience for your family.
However, what many people don’t think about when insuring their home is that their property might contain a lot more than just a house. There might be a carport, storage shed, fencing and other construction that, while perhaps small, still contains value. Your homeowners insurance makes accommodations for these items by allowing you to insure them under a type of coverage called detached structures insurance or other structures insurance.
Though the names might differ, detached or other structures insurance work in generally similar ways. However, depending on your policy, the benefits provided will vary. Therefore, you should always closely examine both how this coverage works, and how much assistance it will provide you.
We believe that the best way for you to optimize your insurance benefits is to know what you are looking at. So, let’s take a deeper dive into the finer points of detached structures insurance together.
What is detached structures insurance?
When you buy homeowners insurance, the policy will be divided into several sections. Each section will insure a different asset or liability present in your home. Most policies offer numerous benefits, including dwelling and possessions coverage, and of course coverage for other structures.
Your dwelling is your house itself. Therefore, it is insured by itself, usually for its replacement cost value. However, on your property, there might be numerous other structures including:
- Carports & detached garages
- Storage sheds
- Certain landscaping
Items such as your swimming pool or a deck might also be considered detached structures for insurance purposes, depending on how they are constructed.
Because these items are not attached to your home itself, they will be insured separately from your dwelling. Other structures insurance is designed for this purpose, and it will provide you with exceptional protection without cutting into your dwelling insurance benefits.
When are detached structures covered under my plan?
Your home insurance will not cover you from every type of damage that might affect detached structures. To qualify for a claim, structures will have to be damaged by a peril that your policy recognizes as unpreventable and unavoidable. Common hazards that generally qualify a for coverage include:
- Falling trees
- Structure fires
However, depending on how the policy is written, covered perils could be restricted. Some policies will only include coverage for a defined list of perils. On the other hand, others will list perils that are specifically not covered, and if a peril is not listed, then it will have coverage. Normal wear & tear, because it is damage that you can usually prevent through normal maintenance, will not have coverage.
How much will my other structures coverage pay me?
Other structures insurance will have defined limits that determine how much your plan will pay you for a given claim.
Generally, your dwelling insurance will need to include enough coverage to pay the home’s replacement cost in case of a total loss. This is the amount of coverage necessary to rebuild the structure following a total loss. The amount of dwelling coverage will directly influence your detached structures coverage.
Usually, the limit included on your detached structures coverage will be a percentage of your total dwelling insurance. For example, if you have $300,000 in dwelling coverage, then your detached structures coverage might be 10% of that, $30,000. However, your detached structures limit will not reduce your overall dwelling insurance limit.
Most of the time, your detached structures coverage will pay you for the replacement cost value of the damaged structure, up to its limit. Therefore, if a single claim damages several items, and you have $30,000 detached structures coverage, then you will receive at most $30,000 for all your damage, not $30,000 per item.
Are there other limits on what my plan will pay?
Additionally, deductibles and other limitations might apply to your eventual settlement. For example, if you have a $1,000 detached structures deductible, and your detached garage sustains $5,000 in damage, then your payment from the insurer will be $4,000. By agreeing to take the $1,000 deductible, you give your insurer permission to subtract that amount from your settlement. If damage value falls below the deductible value, then your plan will not cover you at all.
In some cases, certain detached structures will be insured at their actual cash value, rather than their replacement cost value. In these cases, if a detached structure is destroyed in an accident, then you will receive coverage based on the value of an item at the time of the loss, which is the value of a used item.
Still, even though your detached structures coverage might seem limited, you can still customize it to your advantage. Policy endorsements and other perks can help you increase your coverage to adequately protect detached structures of value, and the increased coverage will likely only cause a nominal change in your policy’s premium.