Your homeowner’s insurance policy extends beyond just your actual home, and can offer coverage to structures that are separate from your home, such as a guest house, shed, or detached garage. Included as part of a standard home insurance policy — along with dwelling coverage, personal property coverage, and liability coverage — Other Structures coverage offers these constructions financial protection if they are damaged from major storms, theft, vandalism, and other covered perils.
Learn more about what Other Structures coverage, also known as Coverage B, includes, how this kind of insurance works, and how to choose the amount of coverage you will likely need.
- What Does Other Structures Coverage Insurance Cover?
- What Doesn’t Other Structures Coverage Insurance Cover?
- How Does Other Structures Coverage Insurance Work?
- How Does Coverage B Work for Condos and Rental Property Owners?
- How Does Coverage B Work for Renters?
- How Much Other Structures Coverage Do You Need?
- How to Buy Coverage B
What Does Other Structures Coverage Insurance Cover?
Homeowners Coverage B applies to structures that are detached from your home. This includes:
- Driveways and walkways
- Detached garages
- Detached decks or patios
- Pool houses
In-ground pools are sometimes covered under Other Structures insurance. However, some insurers may include the swimming pool under Dwelling coverage instead. It should be noted that above-ground pools are typically categorized as personal property, which is included under Coverage C rather than under Coverage B.
For these additional structures on your property to be covered by your homeowner’s insurance policy, a covered peril must be the cause of the loss or damage. For standard insurance policies, this typically includes:
- Fire and smoke
- Water damage caused by appliance overflow or burst pipes
- Lightning strikes
- Wind and hail
- Weight of ice, sleet, and snow
- Falling objects, including trees
- Theft or vandalism
- Damage caused by vehicles or aircrafts
- Frozen plumbing or HVAC systems
- Volcanic eruptions
Typically, your Other Structures coverage percentage is set at 10% of your insurance policy’s dwelling coverage. For example, if your dwelling coverage is $500,000, then your Other Structures coverage would be $50,000. If you find that this is not enough, you can purchase additional coverage from your insurer.
Because Other Structures coverage is included in standard home insurance policies, there is no additional cost for it unless you increase the coverage limit. Your current premium would already include Coverage B.
What Doesn’t Other Structures Coverage Insurance Cover?
Generally, Other Structures coverage does not apply to any structure that’s used for business purposes. This may include a backyard guest house that you rent out, a detached studio used for work, or a separate space on your property where you work and see clients.
Coverage B also does not cover the items inside the structures. For example, if your shed burned down and ruined all of your lawn equipment, the shed may be covered under Other Structures coverage, but the equipment would be covered under your personal property insurance.
Other Structures coverage does not cover damage from excluded perils, either. While these may vary depending on your policy, damages caused by the following events are typically excluded:
- Gradual water damage, such as a slow-leaking pipe
- Maintenance issues
- Mold damage
- Pest infestations
- Homes that are vacant for more than 30 to 60 days
- Intentional damage caused by a member of your household
If damage occurs due to an excluded peril, you will not be able to make a claim against your Other Structures coverage.
How Does Other Structures Coverage Insurance Work?
As part of your homeowners policy, Other Structures coverage applies any time your home and property incur damage. Since Other Structures coverage is a part of your standard homeowner’s insurance policy, the same set of perils applies to both your home and the additional structures on your property.
When purchasing your insurance policy, you can choose whether to elect a named peril or open peril policy.
Named vs. Open Perils
A named-peril policy only covers losses or damages that occur from a peril that is specifically listed in the policy. Some common named perils include fire, lightning, windstorms, hail, explosions, smoke, theft, vandalism, and damage caused by vehicles or aircraft that you do not own. Damages caused by anything else are not covered under a named-peril policy.
In contrast, an open-perils policy covers losses or damages from all perils except those that are specifically excluded in the policy documentation. Some commonly excluded perils include normal wear and tear, flooding, earthquakes, rust, mold, intentional acts, war, and nuclear damage. This means as long as the damage was not caused by something on the exclusions list, your homeowner’s policy will cover it.
Overall, open-peril policies offer more comprehensive protection, but as a result they tend to cost more than named-peril policies. When comparing the two, keep common risks to your home in mind.
How Does Coverage B Work for Condos and Rental Property Owners?
Condo owners purchase condo insurance, which works the same way as standard homeowner’s insurance but without irrelevant coverages, including Coverage B. Other Structures coverage is excluded from condo owner insurance because condo residents do not own property on which to build detached structures.
Those renting out property, even if it is on the same plot of land as their primary residence, will need a separate landlord policy to protect that structure. Standard homeowner’s insurance policies do not cover properties that are used for business purposes. Landlord policies provide Dwelling and Other Structures coverage, as well as rental reimbursement and coverage for certain personal items left on the rental property.
However, keep in mind that landlord insurance does not cover any of the renter’s personal belongings, whether they are inside the dwelling or in a detached structure. Renters need to purchase their own separate renter’s insurance policy for personal property protection.
How Does Coverage B Work for Renters?
A renter’s insurance policy only provides coverage for a renter’s personal property and does not cover detached structures or the main dwelling. Instead, this coverage falls under the landlord’s property insurance. For example, suppose lightning strikes a detached garage and damages all of the tenant’s items inside. In this case, the landlord’s policy covers the garage but not its contents. If the tenant has renter’s insurance, that policy covers their personal belongings that were inside the garage at the time of the incident.
How Much Other Structures Coverage Do You Need?
Other Structures coverage is typically equal to 10% of the total dwelling coverage on your homeowners insurance policy. In some cases, this may not be enough. For example, if you have $300,000 in dwelling coverage, $30,000 (10%) may be insufficient to cover the cost of replacing an expensive in-ground swimming pool or a large shed.
It’s also important to consider whether you have actual cash value or replacement cost coverage. Actual cash value coverage reimburses you for the value of the structure with a deduction for its age and condition. Replacement cost coverage, on the other hand, provides reimbursement equal to what it would cost you to replace the structure with a similar structure today. Upgrading your policy to replacement cost coverage can provide you with additional protection, particularly if your structures are older or have a high value. However, this also increases the cost of your home insurance coverage.
When you’re purchasing your homeowners insurance policy, be sure to review the type of other structures you have, along with its limits, to be sure you’re buying enough coverage for your needs.
How to Buy Coverage B
Since Other Structures coverage is already included in your standard homeowner’s insurance policy, there’s no need to shop for it separately. However, you may wish to increase your coverage or upgrade from actual cash value to replacement cost coverage. If this is the case, contact your insurer to make the necessary changes. That coverage will go into effect when you begin paying the updated premium.
For those looking to decrease their homeowner’s insurance premium, it should be noted that you typically cannot opt out of Coverage B entirely or decrease the default coverage amount.