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We are all looking for places to save some money these days.
So we certainly don’t blame you for reviewing your insurance policies and looking for places to cut costs. After all, your insurance policies probably seem like they are packed with coverages that you don’t understand and that you’re not even sure if you need.
If you’re like many of our clients, the “other structures” coverage on your home insurance policy might be one of them. You have home insurance simply to protect your home, and may not really care about covering anything in your yard. So you might be wondering if you can ditch the coverage altogether.
At Berry Insurance, we get that all the time. And while we understand, our goal is to help our clients understand what the coverage actually is, and why it is important they have it.
In the following article, we’ll outline what other structures coverage is, what it covers (and doesn’t), if you need it, how much you need, and how much it costs.
What is other structures coverage?
Other structures coverage is a portion of a homeowner’s insurance policy which covers structures on the policyholder’s property that are detached from their home. Under this coverage, items in your yard such as sheds, detached garages, pools, fences and driveways are covered from a variety of causes of damage (which we’ll get into below).
If something damages one of these structures, your insurance will pay for the damage up to your policy limits, after you pay your deductible.
Covered causes of other structures damage or loss:
Items on your property are covered from a variety of causes of damage, including:
Storm damage:
Damages to other structures caused by most types of storms, such as rain, wind, hail, hurricanes, tornadoes, and blizzards are covered by other structures coverage. However, it has to result from a sudden cause, not gradual damage. For example, rain damage from a hole in your shed roof after a tree falls through it would be covered. Rain damage from a gradual leak you could have sealed up months ago would not be.
Fire damage:
If a fire damages your detached structures, you will be covered.
Sudden or Accidental Discharge:
Other structures covers damage from sudden water discharge in your detached structures, such as from a burst pipe, water heater rupture, or washing machine or dishwasher failure. However, while the policy covers the damage, it will not pay to replace the faulty water heater, washing machine, dishwasher, etc.
Overflow:
If water overflows from a clogged toilet or sink in a detached structure and causes damage, that damage will be covered.
Sewer backup or water backup (available at an additional cost):
While not automatically covered in your homeowners insurance policy, water backup coverage can be included for an additional cost. This insurance will cover you if a pipe, drain, sewer line or sump pumps backs up and causes an overflow in a detached structure such as a shed. This is different from the “overflow” coverage listed above because the backup occurs deeper within the plumbing system than the drain.
For more on the differences between backup and overflow - and how to respond to or protect from both - read this article: Water Overflow vs. Water Backup: What’s the Difference?
Not covered causes of other structures damage or loss:
Homeowners insurance includes certain coverage exclusions, including the ones listed below:
Floods:
While most weather events are covered under home insurance, for some reason, floods just aren’t, even when it comes to other structures. Even if you have a separate flood insurance policy to cover those types of damages on your home, it might cover flood damage to detached garages, but won’t cover damage to other structures.
Earthquakes:
Earthquakes are also not generally included on a homeowners policy. However, it is usually offered as an optional coverage you can add on to your policy.
Wear and tear/damage from lack of maintenance:
Homeowners insurance typically only covers damage and losses that are considered “sudden and accidental.” Because damage that happens over time can be prevented and maintained, it will not be covered by homeowners insurance. Some of these examples may include gradual water damage caused from slow leaks (like mold, staining, rusting, etc.), rotting or deterioration, peeling paint, loose handles or hinges, scratches and scuffs, and more.
Damage caused by pests:
Unfortunately, homeowners insurance also does not cover damage to other structures caused by pests such as birds, rodents, or insects.
Do I need other structures coverage?
Whether you have structures in your yard you want covered or not, the answer is yes.
While there may be some outlying circumstances, most insurance companies will not write a homeowners insurance policy without other structures coverage. Generally, it is automatically built into your home insurance policy with coverage limits determined based on your dwelling coverage limits (usually around 10 or 20% of dwelling).
So while you may want to ditch the coverage, it is usually not an option, and actually wouldn’t really save you too much money anyways (but we’ll get into that more shortly.)
How much other structures coverage do I need?
As we said, other structures coverage limits are generally 10 or 20 percent of dwelling coverage, but you can choose to buy more if you need it.
For example, if your other structures coverage is $30,000 (10% of $300,000) your insurance will cover up to that limit for damage to any detached structures. But, if you have more valuable structures in your yard, you may want to get even more.
Let’s expand on the example above. Say you have a dwelling coverage of $300,000 and an other structures coverage limit of $30,000 … but you also have a pool that would cost $50,000 to replace.
In this case, your policy would not fully cover your pool, so you may want to pay for extra other structures coverage specifically assigned to the pool to ensure it would be completely covered in a disaster. For more on insurance for swimming pools, read this guide: Swimming Pools and Insurance: What You Need To Know.
How much does other structures coverage cost?
As we mentioned, other structures coverage is built into your homeowners insurance, so having it doesn’t actually increase your premium, and removing it (if you were allowed to) wouldn’t save you any money either.
If you need more other structures coverage beyond what is included, that will increase your premium, but not by much.
In most cases we see coverage cost around 40 cents for every additional $100 of coverage.
The cost of other structures' coverage varies based on your coverage limits, but it won’t drive up the overall cost of your insurance policy too much.
Cover those structures -- it’s worth it:
For such an affordable coverage providing vital protection, it really doesn’t make sense to turn down other structures coverage (plus your insurance carrier probably won’t even allow you to.)
Being outside and probably not as structurally sound as your home itself, structures in your yard can be susceptible to several types of damage, so if anything, other structures coverage will provide a peace-of-mind that your property will be covered and you won’t be faced with an out-of-pocket bill.
Still looking to save money? There are other places you can do that. At Berry Insurance, we are continuously helping our clients identify the best ways they can save on their insurance policies.
