Insurance for outbuildings and other structures: What is covered?

If you just bought a sprawling property with several barns that you plan to fill with ATVs or just finished building a brand-new in-ground pool and pool house oasis, you might be wondering how your homeowners insurance policy and premium will adjust to compensate.

Thankfully, homeowners do not need to purchase additional insurance for outbuildings on their property, as these structures are protected under traditional homeowners insurance policies. However, insuring these additional structures will likely affect your premium. In this article, we’ll break down how you can insure your outbuildings under other structures coverage.

What is considered an outbuilding?

An outbuilding is a shelter located on a property that stands separate from the main building. It’s not the main dwelling or office building on the premises. Outbuildings can range from a detached garage to a guest house. The size of the structure doesn’t determine whether or not it’s considered an outbuilding.

How insurance for outbuildings works

Homeowners insurance can be broken down into six different types of coverage: Coverage A, Coverage B, Coverage C, Coverage D, Coverage E and Coverage F.

Coverage B, otherwise known as other structures coverage, is the aspect of homeowners insurance policies covering all outbuildings on a property used for leisure or personal use. Coverage limits are calculated by determining the cost of replacing or rebuilding the home and its additional structures if severely damaged or destroyed.

Other structures insurance protects your outbuildings against the same list of perils as the house itself. Basic policies cover losses against instances beyond your control, such as some weather-related damages, water damage from appliances, vehicle damage, theft and more. It’s important to note that damages from natural disasters, such as hurricanes and flooding, are not covered under basic policies and require additional policies for coverage. 

Now that you know how insurance for outbuilding works, let’s see if your outbuilding is covered.

What other structures are covered by homeowners insurance?

You may be surprised to know that other structures insurance covers more than just buildings on an individual’s property. In fact, most detached structures are protected under Coverage B.

Non-buildings

Fences and driveways are two examples of structures that aren’t buildings, but that are protected under other structures coverage. Even invisible, electric pet fences may be covered, but this may vary between insurance providers.

Other non-building types covered include mailboxes, patios, decks, swing sets and treehouses.

Detached garages

Whether you have a detached garage filled with vehicles and ATVs or have it set up as the ultimate party spot, you’ll be happy to know that your garage and belongings are safe under other structures coverage.

All garages, whether attached or not, are covered by a homeowners insurance policy. However, since attached garages are considered part of a house’s structure, it falls under Coverage A, whereas a detached garage falls under Coverage B.

If you run a business out of your detached garage, you should add a commercial endorsement to your policy. Without the endorsement, your building would not be protected against the standard perils under other structures coverage since it’s used for business. This is typical for any home-based business.

Gazebos and pavilions

Gazebos and pavilions are typically built in backyards or on patios for added shelter. Both could be considered outbuildings and are protected by other structures coverage. Keep in mind that this only applies to gazebos built onto a property, usually from wood or vinyl materials. The pop-up tent type of gazebo would not be protected. 

Pools and pool houses

Pool insurance is commonly misunderstood, as many homeowners believe they need an additional insurance policy for an in-ground pool. This is false, and pools, along with pool houses, both fall under other structures coverage.

It is common for properties with pools to face higher premiums. This is because insurance companies label pools as attractive nuisances, which means they increase the property's appeal while also increasing the risk of danger and accidents. Since there is a higher risk of accidents, insurance companies charge more to make insuring a home with a pool worthwhile. 

On the other hand, pool houses are also protected from perils under Coverage B but do not affect your premiums the same way as the pool would, except for adding more to your home's overall value. The same goes for guest houses, like granny pods.

Although your insurance provider may see your pool as a risk, there are steps you can take to implement proper poolside safety. Check out the infographic below for tips on keeping your family safe around your pool.

Sheds

All types of sheds — for storing lawn maintenance equipment or a getaway for crafting — are considered outbuildings and are protected by other structures coverage. 

Barns and greenhouses

If your property has a barn or garden greenhouse on-site, these also fall under other structures coverage. However, farms and gardens are often used to make a profit. Therefore, depending on how you use the barn or greenhouse, you may need to purchase additional coverage.

Farmers with large or commercial farms should invest in the proper insurance to ensure their farm's safety. Other structures insurance may cover some of the additional outbuildings on your farm, but further coverage is needed for equipment and employees.

Adding new outbuilding to your policy

Typically, other structures coverage equates to 10% of the dwelling limit. If you need more coverage because the combined value of your outbuildings and other structures is higher than the 10% value, you would need to increase your dwelling limit. 

It's important to keep this in mind if you are adding a new outbuilding or structure to your property. Be sure to call your insurance provider to check if your addition is protected through Coverage B and request an increase to your dwelling limit if needed.

If your insurance costs seem to rise significantly with a new outbuilding, it may be time to check out the best insurance companies for a new homeowners policy. Or, you can try bundling your home and auto to get lower rates.

Sources: CDC | CDC | HomeGuide | LiveAbout