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What is “Other Structures” Property Coverage on my home insurance?

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While looking at your homeowner’s insurance policy, you notice a particular coverage called “Other Structures.”   Several questions pop into your head. What is it?  What’s covered under this feature?  Am I paying extra for this?  Don't worry you are not alone. This is a very common question for a homeowner.

"Other Structures" is defined by the insurance industry as structures which are on the property that do not share a foundation with the home. 

It is safe to say that almost everyone needs Other Structures coverage. It’s also important to make sure you have enough coverage and to know what is covered and what is not covered.

"Other Structures" can include: 

  • Detached garages
  • Storage sheds
  • Barns
  • Guest houses
  • Pool houses
  • Gazebos
  • Fences
  • Driveways
  • Sidewalks
  • Patios
  • Swimming pools
  • Retaining walls

Most Illinois homeowners insurance companies provide this coverage, which is 10 percent of your dwelling coverage, at no charge. This automatic percentage is both a good and bad thing. The good part is that the policy recognizes that almost everyone needs at least some coverage for other structures, and therefore provides it to you automatically at no cost. The bad part is, because it is automatically provided, many people do not think about whether or not the coverage being provided is enough.

For example, if your home is insured for $100,000 and your policy is providing 10 percent of this coverage for other structures that gives you $10,000 automatically. This may sound like a lot of coverage to replace a garden shed; but it may not be enough to replace a swimming pool, a gazebo, or an extensive retaining wall structure. 

To be covered under the standard homeowner’s policy the structures must be used for personal use, not business. However, depending on who owns the business and what the business is, you may be able to endorse the coverage onto the homeowner policy. Otherwise, structures used for business need to be covered under a business insurance policy. Your insurance agent should be able to help you understand which structures are, or are not, covered. It’s not uncommon for there to be confusion in certain situations:

  • Storage sheds which are used to store the home's garden equipment would be covered. However, a storage shed used to store garden equipment for a landscaping business would not be covered under the homeowner's basic homeowner’s insurance policy.  
  • Barns to store supplies for animals would be covered; however, they would not be covered if the animals were kept for profit.  For example, horse trainers would need a business policy to cover them properly.

Additional coverage for Other Structures can be added for an additional charge. The cost to increase the coverage is usually $4 per $1,000 of coverage. It is good to note that while detached buildings can be covered at replacement cost (which will pay for the repair or replacement of the building without a deduction for depreciation), other structures which are not buildings are covered at Actual Cash Value (which depreciates the amount the carrier will pay out based upon the age and condition of the structure prior to the loss). These items would include fencing, driveways, and other man-made structures that are not buildings.  Also, detached buildings have to be insured to 80% of the replacement cost as of the date of loss to avoid a coinsurance penalty.

So the next time you are puttering around your yard, take stock of what you have on the land and contact your insurance agent to discuss these structures and whether or not you should increase your Other Structures coverage to be properly protected.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois. Insurance shopping is easy when the Protection Team provides you with multiple quotes to choose from. You will always know you are getting the best coverage at the lowest possible price.

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Rueck Insurance is your independent, one-stop insurance center for all your personal and business insurance needs in Illinois.

702 Bloomington Rd#205
    Champaign, Illnois
(217) 355-9075
dave@insuringchampaign.com

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