Most people assume that their homeowners insurance automatically provides full coverage for their shed and garage. However, all insurance policies differ as do the clauses and terms within them.
Let’s take a look at what’s typically covered and when you might need additional coverage.
Your shed, detached garage, deck, fences, and other unattached structures are usually covered for the same perils as your home under a standard homeowners insurance policy.
These may include, fire, lightning, smoke, hail, explosion, and more. If the contents in your shed or garage are damaged by a peril not listed in your policy, your claim will likely get denied. For instance, damage caused by animals or insects typically wouldn’t be covered.
Most policies provide 10% of your dwelling coverage for all these structures, not including the contents. If you have a custom garage and fencing and an elaborate deck and shed this might not cover the cost to rebuild. Calculate the cost to rebuild based on today’s prices or get an estimate. You can increase coverage if the value is higher.
The contents of your outbuildings fall under your homeowners insurance’s contents coverage. Most policies allot 40% for an actual cash value policy or 70% for a replacement cost endorsement. It is important that you inventory the contents of outbuildings and estimate their current value to ensure your policy provides sufficient protection.
Standard homeowners policies exclude many perils. If you’re not covered under your homeowners policy, your shed and detached garage aren’t covered either.
Fortunately, in many cases it is just a matter of adding an endorsement to your homeowners insurance policy to protect your home and its adjacent structures. Some specific perils require a separate policy.
Flooding & Earthquakes
Homeowners insurance policies do not cover flood damage. If you already bought a flood insurance policy, you may be able to add an endorsement to include your outbuildings. Consider mudslide, landslide, and sinkhole coverage too if you live in a vulnerable area.
In addition, earthquake coverage can be added as an endorsement on your homeowners policy or purchased separately.
Sewer backups aren’t covered under a homeowners insurance policy, either. However, you can add an endorsement to your policy to protect outbuildings from sewage water seeping into these structures.
Your insurance company will deny a claim if you’re operating a business from one of these structures as this is excluded from a homeowners insurance policy coverage.
Generally, this isn’t an issue unless you have a freezer or refrigerator in your garage stocked with food. You can add an endorsement to your policy to cover spoiled food.
Ordinance & Law
Bringing your garage or shed up to code is not included in a standard homeowners insurance policy. However, you can buy an endorsement and it’s recommended as building codes and ordinances change often and it can be expensive to do the needed upgrades.
Any problems caused by a homeowner’s failure to maintain their property is not covered under their policy. For instance, if you put off pruning a dying tree and it crashes into your garage, you’ll be on the hook for repairs or replacement.
Don’t guess when it comes to protecting your home and property. Talk to an independent insurance agency like ours. We can help you align your coverage to your needs, eliminate insurance gaps, and find the best possible rates, too.