Your homeowner's insurance policy protects you from having to pay on your own for damage to your home caused by fire, wind, smoke and other causes.
However, your home might not be all you have to worry about. Does your property have a gazebo? A deck? A pool? An outside kitchen? A shed? A fence?
If you answered "yes" to any of these, the good news is that your policy covers those structures, too. The real question then becomes whether it's providing enough insurance to cover the cost of rebuilding or repairing them.
The standard Insurance Services Office (ISO) Homeowners 3 - Special Form, which many insurance companies include in their policies, covers "other structures" on the grounds where the home sits.
The insurance company will consider a structure to be an "other structure" and not part of the house if it is separated by clear space from the house. They will also consider it to be separate if it is connected to the house only by a fence, utility line or something similar.
It is common for a policy to insure all of these structures for an amount equal to 10% of the amount of insurance on the house. For example, if the policy provides $300,000 coverage on the house, it will provide $30,000 for other structures.
Whether that will be enough depends on how much it will cost to repair or replace them, and how many there are. If a home has a stockade fence, a large deck and a shed, the cost of replacing all of them after a fire may wipe out the amount of insurance.
Some other things to know about other structures coverage:
Actual cash value is typically the cost of replacing an item minus an amount for depreciation. If a 10-year-old fence would cost $10,000 to erect today, and it has a useful life of 15 years, the insurer can deduct two-thirds of that amount from the $10,000.
The result is approximately $3,333. The company would compare that to the cost of repair. If repairing it would cost more, the insurer would pay the lower amount.
What you can do
Your homeowner's insurance should provide you with as much protection as possible for the price you can afford. Find out before something happens how well it protects the valuable structures on your property besides your house.
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501 Bell St.
Dubuque, IA 52001
Phone: (563) 556-0272
An AssuredPartners Agency
In February 2020, The Friedman Group joined AssuredPartners, the 11th largest insurance brokerage in the U.S. This partnership provides us access to additional capital and a national footprint that enables us to continue to negotiate the most favorable coverage terms and conditions for our clients, and allows us to provide an even broader spectrum of risk management support services.