If you scrutinize your home insurance policy, you will find that it includes coverage for structures in your home other than the main house. Many homeowners don't fully understand "other structures" coverage; here are a few things you should know to boost your understanding of the coverage:
The Structure Shouldn't Be Connected to the House
For a building to be considered under "other structures," it needs to be detached from the main house. Therefore, you can't extend your house and classify the extended portion under "other structures." In the same way, structures such as tool sheds, garages, or stores that are connected to the main house aren't "other structures." The only way such buildings may be classified under "other structures" is if they are connected to the main house by a wire or fence.
The Coverage Is Part and Parcel of Your Homeowners Insurance
You should also know that you can't remove "other structures" coverage from your policy. This is the case even if you don't have additional structures in your compound. This is because the coverage is integrated into your homeowner's insurance policy; it isn't an add-on. Insurance companies consider it an intrinsic part of homeowner's insurance and calculate their rates with it in mind. Therefore, it is automatically rolled out to all homeowners who purchase insurance.
The Limits Are Relatively Low
"Other structures" coverage is relatively low and may not be adequate for expensive buildings. Home insurance companies typically offer "other structures" coverage as a percentage of the overall home insurance limit. For example, if you have an overall limit of $150,000, your "other structures" coverage limit may only be 10% of it ($15,000). This may not be enough for, say, a state-of-the-art detached garage, a secure tool shed, a kennel, and other structures you may have in your home.
It Doesn't Apply to Commercial Structures
Lastly, you should also know that "other structures" coverage only applies to structures used for personal purposes; it doesn't apply to structures that earn you income. For example, "other structures" coverage will not cover your detached garage if you are renting it out to a neighbor. Similarly, it won't cover a barn inhabited by livestock for sale.
Now that you understand what "other structures" coverage applies to, analyze your home insurance policy to certify that you have adequate coverage. If not, then talk to an insurance agent to help you upgrade your coverage as necessary.
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