What is Other Structures Coverage?

Homeowners insurance and other structures coverage

If you’ve just enrolled in homeowners insurance, you may notice amongst the coverages detailed in your policy something called Coverage B — also known as other structures coverage. While it sounds rather vague, it’s actually quite straightforward.

“Other structures” refers to property that’s not attached to the structure of your home (which is your dwelling, or Coverage A). Essentially, other structures coverage is an extension of your dwelling coverage. It is unique to homeowners insurance and is not part of condo or renters insurance policies.

We’ll explore the details of this coverage, how it works to protect your property, and its limitations.

 

Coverage B in home insurance — table of contents:

1. What is Coverage B: other structures coverage?
2. What’s covered by other structures coverage?
3. What is excluded from other structures coverage?
4. Do I need other structures coverage?
5. Can I increase coverage for other structures?

 

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How does other structures coverage work?

Your home insurance policy covers more than just the structure of your home. Other structures coverage is a part of every homeowners policy and covers property that is detached, like fences and sheds. Coverage B will only apply to detached structures used for leisure or personal use — which is typical of any type of personal insurance policy. If you’re running a home business in the guest house, it would be exempt from coverage should you experience a covered peril — unless you add a commercial endorsement to supplement your coverage for business use. 

Claims payouts for other structures are usually based on replacement cost value — just like your dwelling coverage. However, this may vary by company and policy. Some insurers will calculate the value of your loss using actual cash value, which deducts for depreciation.

Examples of other structures covered by homeowners insurance

As previously mentioned, detached property like fences, sheds, and guest houses are covered by other structures coverage. It also includes the following:

• Detached patios
• Detached garages
• Gazebos
• Sheds
• Barns
• Mailboxes
• In-ground swimming pools (depending on your insurer, swimming pools may be covered under the dwelling provision of your policy instead)
  
  

How much coverage do I need for other structures?

Your coverage limit for other structures depends on your coverage limit for Coverage A. Coverage A refers to the structure of your home — your dwelling — and is the cornerstone of your home insurance policy. Your Coverage B limit is calculated as a percentage of your Coverage A limit; the default amount is 10%. So if your home is insured for $200,000, you will have $20,000 towards other structures coverage.

If you need more coverage for your other structures, see more here.

 

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What perils does Coverage B cover?

The perils covered by your dwelling coverage also applies to other structures. If you have an HO-2 homeowners policy, it will protect your property from the standard 16 named perils that qualify as covered losses:

• Lightning or fire
• Hail or windstorm
• Damage caused by aircraft
• Explosions
• Riots or civil disturbances
• Smoke damage
• Damage caused by vehicles
• Theft
• Vandalism
• Falling objects
• Volcanic eruption
• Damage from the weight of snow, ice, or sleet
• Water damage from plumbing, heating, or air conditioning overflow
• Water heater cracking, tearing, and burning
• Damage from electrical current
• Pipe freezing

Homeowners with HO-3 and HO-5 policies have expanded coverage because these are open peril policies. This means any peril is covered — including the named perils above — unless it is specifically excluded from the policy.

 

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Exclusions for Coverage B: what is not covered by other structures coverage?

Even with a more comprehensive homeowners insurance policy, there are always exclusions in what insurance will cover. These exclusions apply to all the property-specific provisions of your policy — your dwelling and personal property coverages. Home insurance will not cover the following perils:

• Flood — homeowners can purchase flood insurance separately.
• Hurricane
• Mold
• Vandalism to vacant dwellings
• Wear and tear
• Property damage caused by pets
• Earthquakes — homeowners can purchase earthquake insurance separately.
• Enforcement of building codes and similar laws
• Intentional acts
• Neglect
• Government acts
• Nuclear hazard
• Off-premises power failure

It’s also important to remember that any property utilized for business use — like running an Airbnb out of the guest house — will be excluded from coverage.

 

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Do I need other structures coverage?

Let’s say that apart from your house, your property doesn’t have many detached structures outside, and you don’t find this coverage necessary. Unfortunately, your insurance company will not allow you to completely take Coverage B off your homeowners policy. This is because other structures coverage is part of a package deal — and thus, you are not being charged an additional premium for it.

Homeowners tend to underestimate how much property they have; this holds true for other structures, as well. You may not realize you have additional structures around your home until you need to make a claim. Coverage B will ensure you’re sufficiently protected by way of a full replacement of what you lost — for not just the structure of your residence, but everything around it, too.

 

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How to increase insurance coverage for other structures

If 10% of your dwelling limit won’t be enough to replace the additional structures around your home, it would be in your best interest to increase your Coverage B limit. By increasing your Coverage A limit for your dwelling, you will raise your limit for Coverage B.

Let’s use our previous example of a $200,000 dwelling limit and $20,000 other structures limit. If you need double the amount of coverage to cover a newly built detached patio and garage, you will need to increase your dwelling value to $400,000 to commensurately raise your other structures coverage to $40,000.

Increasing your home insurance coverage is never a bad thing — as long as it's affordable, it's a great way to safeguard your investment. If you're unhappy with what you're paying, it's worth shopping around for a better home insurance price.