“Other Structures” Coverage Explained

Written By Charlotte Insurance on August 18, 2021. It has 0 comments.

a shed that would be covered under a homeowners insurance policy's "other structures" coverage

You know your home and everything inside is protected by your home insurance under “dwelling” coverage. But what is “other structures” coverage and what exactly do you get with that coverage?

Here’s what you need to know about this very important but often misunderstood part of your homeowners insurance policy.

What is “Other Structures” Coverage?

“Other structures” coverage, also known as “Coverage B” provides insurance coverage for structures that are not attached to your home dwelling. This includes:

  • Detached garages
  • Fencing around the property
  • Sheds
  • Guest houses
  • Detached patios
  • Gazebos
  • Mailboxes
  • Barns
  • Walkways
  • Swimming pools*

*Swimming pools are handled differently by your insurer depending on the type of pool, proximity to your dwelling, and other factors. To understand how your swimming pool is covered under your home insurance policy, talk to your independent insurance agent.

How Does “Other Structures” Coverage Work?

In many ways “other structures” coverage works like the rest of your home insurance policy.

  1. Perils included in your policy will cover the other structures. Likewise, perils not covered still do not apply, either. This includes floods, earthquakes, normal wear and tear, and more.
  2. The amount you receive to repair or replace the other structure will be determined by your policy type: actual cash value or replacement cost.
  3. You can increase your coverage amount if you need more than what your standard policy provides.

In one very key way, however, “Other Structures” coverage is very different. Your policy limit will be a percentage of your total dwelling coverage. For example: If your dwelling coverage has a limit of $300,000 in coverage, and the limit for Coverage B is 10 percent of that, you only have $30,000 in protection. You’ll need to decide if that’s enough insurance for the other structures on your property.

Using “Other Structures” for Home-Based Businesses

Do you have a shed or workshop where you make products you sell? Are you using your detached guest house as an AirBnB rental? It’s important you understand what your home insurance covers and what it doesn’t.

In general, home-based businesses should be protected by a business insurance policy. It’s likely less expensive than you’re thinking. Give us a call and we’ll talk you through it!

Why does it matter? If your home insurance policy covers your business at all, it will likely only be a small amount for equipment, usually about $5,000. For many business owners, this isn’t enough to replace equipment, supplies, and inventory. It also won’t cover any lost business income the way some business insurance policies do. Worse, you won’t have the protection of business liability coverage either.

Need more home insurance protection for your “other structures” than your standard policy offers? Ready to better protect your home-based business? Contact Charlotte Insurance today for a free quote!

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