What is Other Structures Coverage?
Other structures coverage covers damages to other detached structures on your property, such as fences, sheds, or in-ground swimming pools. If you plan on borrowing money to purchase a home, your mortgage lender will likely require you to secure homeowners insurance. Though not legally required, most homeowners policies include some level of other structures coverage, also known as coverage B.
Coverage B ensures you receive reimbursement for all aggregate structural damage incurred by a covered peril such as a storm or fire, not just for losses to your primary residence. Without coverage B, homeowners would have to repair or replace these other structures out of pocket, tentatively costing upwards of tens of thousands of dollars.
Table of Contents
- What is Other Structures Coverage?
- When More Than Just Your Home Needs Coverage
- How Does Other Structures Coverage Work?
- How Much Does Other Structures Coverage Cost?
- How To Get Other Structures Coverage
- Should You Get Other Structures Coverage?
- Does Other Structures Coverage Work for Renters?
- All in All
When More Than Just Your Home Needs Coverage
About 1 in 20 homeowners policyholders file a claim every year, typically in response to perils such as fires and windstorms capable of exacting widespread and unpredictable damage. Elemental barrages of this magnitude threaten your entire property, not merely the house you live in. Homeowners should ensure sufficient other structures protection as a financial buffer against unforeseeable losses resulting from a disaster.
Suppose a tree falls into your backyard, crushing your fence and shed and scraping the walls of your house. While your dwelling coverage would pay for the damages to your actual home, other structures coverage guarantees additional reimbursement for repairs or replacement of the shed and fence.
How Does Other Structures Coverage Work?
Coverage B offers protection against all the same covered perils that would qualify for reimbursement under your dwelling coverage and automatically comes included in most homeowners insurance policies. Usually, coverage B will pay to repair damages to separate structures from your home at about 10% of your dwelling coverage limit.
For example, a homeowners insurance policy with $300,000 of dwelling coverage would pay to repair other structures on your property up to a $30,000 limit. Homeowners could simply file a standard homeowners insurance claim for such damages, and their provider would determine how to pay for repairs or replacement.
What Qualifies as an “Other Structure?”
Most features of your property not directly attached to your home qualify as other structures, including:
- Detached garages
- Separate guest houses
- Detached patios or decks
- Driveways or docks
Some insurers may also consider an in-ground swimming pool as a qualified structure and factor them into coverage B, while other companies will roll them into their policies’ general dwelling coverage.
What Does Not Qualify as an “Other Structure?’
However, not everything on your property will qualify for coverage B. Common exclusions include:
- Above-ground pools that typically require personal property coverage.
- Business structures, such as sheds converted into offices or rental properties.
- Personal items stored within structures. This coverage only protects the structures themselves; everything inside requires separate personal property insurance.
What Is Covered by Other Structures Coverage?
Most homeowners policies reimburse damages on an open peril basis, meaning losses from perils not explicitly excluded from your policy will qualify for coverage. Common covered perils include:
- Fire or smoke
- Wind and hail
- Structural collapses from heavy ice, snow, or sleet
- Windstorm or hail
- Water damage from burst pipes or appliance failure
- Falling objects
- Frozen plumbing or other household systems and appliances
- Vandalism or theft
- Damage caused by vehicles or aircraft
- Volcanic eruption
For example, say a thick sheet of ice accumulated atop your guesthouse began to melt. If the weight of the melting ice were to collapse the roof, coverage B would reimburse you for repairs or replacement.
What Is Not Covered by Other Structures Coverage?
Alternatively, perils almost universally excluded from dwelling and other structures coverage include:
- Earthquakes and other tectonic movements such as sinkholes
- Gradual water damage
- General wear and tear or neglect
- Intentional damage caused by a resident
- Damage to homes with prolonged vacancies
- Government acts
Homeowners must buy separate coverage for floods, earthquakes, or similar localized threats, as insurance providers view these as too high-risk and costly to cover through one conventional policy. Additionally, these providers typically exclude pest damage and wear and tear from coverage, considering general maintenance and attention to the home as the homeowner’s responsibility.
How Much Does Other Structures Coverage Cost?
Coverage B almost always comes included in standard homeowners insurance policies and rarely necessitates a separate purchase. Since coverage B directly correlates to your dwelling coverage limits, it does not significantly factor into your overall insurance costs.
In 2023, the average cost of homeowners insurance with a $250,000 dwelling limit is $2,234 annually or $186 per month. However, premiums can vary widely depending on numerous factors, including your state, the age of your home, your insurer, your credit and claims history, deductible amount, and much more. To raise coverage B limits, you must buy more dwelling coverage.
How to Determine How Much Coverage You Need
Occasionally, the value of other structures on your property will exceed your reimbursement limit, so take stock and compare their worth against 10% of your dwelling coverage. If you need more protection, talk to your insurer about increasing your dwelling coverage limit or switching to a special policy that allows a higher other structures coverage percentage. If that still doesn’t meet your needs, inquire about supplemental other structures coverage options that could make up the difference.
Other Factors to Consider
Replacement Cost Coverage
Your insurer will either reimburse you the actual cash value (ACV) of damages to other structures or their replacement cost value (RCV). ACV factors depreciation and general wear and tear into your final payout, whereas RCV reimburses you the total amount of repair or replacement, regardless of age. Opt into a replacement cost coverage endorsement to maximize protection for other structures under your homeowners policy.
Home Business Coverage
Homeowners coverage B typically excludes separate structures on your property utilized as offices or storage units for a home business. So if you store dry goods for your restaurant in your home shed or have tenants renting out a detached in-law unit, you will need separate home business coverage to guarantee these structure protection from covered perils.
How To Get Other Structures Coverage
As mentioned earlier, this coverage comes included with almost all homeowners insurance policies. In fact, most companies will not allow you to remove it from your policy, even if you have no separate structures on your property. Therefore, to secure other structures coverage, simply find and purchase a homeowners policy following these steps:
- Determine the amount of dwelling coverage you need and can afford.
- Compare quotes from at least three insurance companies online.
- Explore options within each homeowners policy, such as ACV vs. RCV reimbursement or bundling discounts, and note perils excluded from coverage.
- Talk to a trusted insurance agent to help you purchase a homeowners insurance policy that fits your needs.
Should You Get Other Structures Coverage?
Homeowners with other structures on their property, from small mailboxes or fences to freestanding barns, directly benefit from this additional coverage. Luckily, almost all insurers roll this coverage into their homeowners insurance policies as a percentage of each policyholder’s dwelling coverage limits. As long as you have homeowners insurance, albeit in rare situations, you should have some degree of other structures coverage.
Coverage B specifically applies to people who own homes, not condominiums. Separate structures and shared spaces on condo property see coverage through their COAs’ master policy and the loss assessment endorsements of all residents therein.
Does Other Structures Coverage Work for Renters?
Renters insurance policies only reimburse renters for personal belongings stored on rental property grounds. Landlords bear responsibility for structural damage to all other aspects of their property. If a tree falls on a shed you were using as a storage unit, your renters insurance will cover the items inside, and your landlord’s property insurance will pay to repair the shed.
All in All
Unless you feel prepared to pay for significant, unforeseeable damages out of pocket, ensure you have coverage B included with your homeowners insurance policy. This essential protection reimburses you for damages to detached structures outside your home, such as fences and sheds, typically at 10% of your dwelling coverage limit.
If your insurer does not automatically include this type of coverage in your homeowners policy or you want more than a 10% share of your dwelling coverage, take stock of the total replacement value for all separate structures on your property. Deduce how much protection you’ll need and speak with a trusted insurance agent about increasing your homeowners dwelling limits, thus expanding your coverage B limit, or purchasing standalone other structures coverage.