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Other Structures Need Other Coverage

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by Stephanie Olsen - Central Insurance Companies on Nov 11, 2016

You’ve found the perfect homeowners policy for your needs – that’s great! But did you consider your ‘other structures’ needs? Do you know what are considered other structures?

Other structures in general are any man-made structures that are separated from your dwelling by a clear space. This includes, but is not limited to, structures such as a detached garage, shed, guest house, outdoor kitchen, or entertaining area. It can also include sidewalks, patios, swimming pools, driveways, fences, retaining walls, and sprinkler systems. All of these items can be damaged by perils that are covered by your homeowner’s policy, but may require further review to determine the best way to insure them.

Other structures insurance, or Coverage B, can come into play in various ways as part of your homeowner’s property coverage and is an important step in the evaluation of your insurance needs.

Other structures covered with an automatic percentage of coverage based on the insured value (Coverage A) of your home.

  • In this example, the homeowner’s policy includes a set percentage of insurance for other structures (Coverage B) based on the insured value of your home (Coverage A). Generally this is set at a minimum of 10 percent but could be higher. For example, if your home is insured for $150,000 and your policy has this 10 percent clause, you have $15,000 in coverage for other structures on your property.

What if 10 percent is not enough for your detached structures? Use an endorsement to add additional coverage!

  • If the other structures limit that is built-in to your policy is not sufficient for your needs, the limit can be increased. This is quite simple but often overlooked when reviewing insurance coverages.
  • Do you own a boat dock on a lake? It’s possible this is considered ‘off premises’ other structures (often lake shores are technically owned by the Army Corps of Engineers). There is a separate endorsement available for this exposure!

What if 10 percent is too much coverage? Do I have to keep the 10 percent coverage B limit?

  • The short answer is no, you don’t, but that depends on your insurance carrier and state regulations. Some insurance companies have recently introduced more flexibility in coverage options for other structures, including the option to eliminate it altogether. This is dependent upon state laws (some require you to maintain the 10 percent automatic limit), and should be carefully evaluated to see if it is in your best interest to eliminate the coverage. While it’s unusual that there would not be any other structures on your property, it does occur and there are insurance solutions to fit those needs.

As always, the best advice I can give is to contact an independent agent to help answer all your insurance questions! A trusted advisor is invaluable for your peace of mind!



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