The Ins and Outs of Other Structure Coverage

Your Homeowner's policy has Other Structure coverage automatically included. It covers the various buildings on your property that are detached from the house, but is it enough? How is Other Structures coverage determined? Are there any exceptions to the coverage?

Other Structure coverage, like most insurance terms, is very unimaginative in its name. It covers most Other Structures or buildings on your property, most likely being a detached garage or shed(s).  It is an extension of your main building coverage (Coverage A). The amount of Other Structure coverage you have is almost never calculated as a set amount. Instead, your insurer will typically use 10% of your main dwelling coverage (Coverage A) to find the amount for it (Coverage B). So, if you home is covered at $150,000, you would have an automatic $15,000 of coverage for Other Structures. The amount of Other Structure coverage can typically be increased (for a fee), and the coverage covers all the buildings on your property that are separate from you home, up to the designated amount for Other Structures.

The caveat to Other Structure coverage is in the use of the building. If the main use of the shed/detached garage/etc. is for business purposes, then the Homeowner’s policy will not cover it. A standard Homeowner’s policy will typically cover approximately $1,000 of Business Personal Property you have on the premises of your home, but it will not cover a building that is used primarily for business purposes.

To illustrate this, an easy example would be a contractor: the contractor uses his detached garage exclusively to store his work truck and tools. To have these properly covered, the auto would need to be on a Commercial Auto policy, and the detached garage and tools would need to be insured as business property on a Commercial Property policy. (Note: come claim time, if there was a mix of business and personal items in a separate building from the home, it would take debating by the insurer and adjuster to determine what is and isn’t covered. Please talk to your agent if a situation like this is currently occurring, especially if you are running any type of business out of your home.)

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