Understanding Secondary Structures Coverage in Your Homeowners Insurance Policy: A Detailed Guide
When you purchase a homeowners insurance policy, it’s not just the Primary Dwelling—the main structure of your home—that’s protected. Many policies also include coverage for secondary structures on your property, such as detached garages, sheds, fences, and other outbuildings. This coverage, often referred to as Coverage B, is an important aspect of your overall insurance plan. Understanding how Secondary Structures coverage works will help ensure that all aspects of your property are adequately protected in the event of damage.
This detailed guide will explain what Secondary Structures coverage is, how it applies to different types of structures, and provide specific examples to help you understand this essential component of your homeowners insurance policy.
What is Secondary Structures Coverage?
Secondary Structures coverage, also known as Coverage B, provides financial protection for structures on your property that are not attached to your main home. These can include a variety of buildings and structures, such as:
Detached garages
Sheds
Gazebos
Fences
Guest houses
Barns
Swimming pools and associated equipment
Detached decks or patios
Similar to your Primary Dwelling coverage, this only protects the structure itself and items that are permanently attached. For instance, (again) sinks and sconces attached to your barn would be covered here, however, the associated tools inside the barn are protected under your Personal Property coverage.
Key Components of Secondary Structures Coverage
1. Coverage Limit
What It Is: The coverage limit for Secondary Structures is usually a percentage of the primary dwelling coverage limit (Coverage A). Typically, this is set at 10% of the dwelling coverage, but this percentage can vary depending on your policy or if you have specifically adjusted this limit.
Example:
If your dwelling coverage (Coverage A) is $300,000, your Secondary Structures coverage (Coverage B) would likely be $30,000 (10% of $300,000 unless this was edited when you opened your policy). This means that in the event of damage to your detached garage, shed, or other structures, your insurance would cover up to $30,000 in repair or replacement costs.
Action Step: Review your policy to determine the coverage limit for Secondary Structures. If you have significant secondary structures on your property that are costly to replace, consider increasing this coverage limit to ensure adequate protection.
2. Covered Perils
What It Is: Secondary Structures coverage typically protects against the same perils that are covered under your primary dwelling coverage. This includes common risks such as fire, windstorm, hail, theft, vandalism, and certain types of water damage. We will go over these in much greater detail in the chapter entitled Perils.
Example:
If a severe hailstorm damages the roof of your detached garage, this damage would be covered under your Secondary Structures coverage, provided hail is a covered Peril under your policy. The insurance would pay for the repairs, up to your coverage limit.
Action Step: Check the list of covered perils in your policy to confirm that your secondary structures are protected against the risks most relevant to your area. If necessary, purchase additional coverage for perils not included, such as floods or earthquakes.
3. Exclusions and Limitations
What It Is: Like your primary dwelling coverage, Secondary Structures coverage comes with certain exclusions and limitations. Common exclusions include damage caused by floods, earthquakes, normal wear and tear, and certain types of water damage (such as from rising water or sewer backups).
Example:
If your detached shed is damaged by a flood and you don’t have separate Flood Insurance, the damage would not be covered under your standard homeowners insurance policy. Similarly, if your Fence deteriorates due to age and wear, this damage would also be excluded.
Action Step: Familiarize yourself with the exclusions in your policy. Consider purchasing additional coverage, such as flood insurance or an Earthquake Endorsement, if your secondary structures are at risk from these types of perils.
4. Types of Structures Covered
What It Is: Secondary Structures coverage applies to a wide range of structures that are not physically attached to your main home. This includes both functional structures, like garages and sheds, and recreational structures, like gazebos or swimming pools.
Example:
Detached Garage: If a fire breaks out in your detached garage, destroying the structure and its contents, your insurance would cover the cost to rebuild the garage, as well as the replacement of any personal property stored inside, up to the coverage limits.
Shed: If a tree falls on your shed during a windstorm, causing significant damage, your Secondary Structures coverage would pay for the repairs or replacement of the shed.
Fence: If vandals damage your fence, your insurance would cover the cost to repair or replace the fence, again up to the coverage limit.
Action Step: Make an inventory of all the secondary structures on your property and ensure they are adequately covered by your insurance policy. If you have high-value or unique structures, discuss additional coverage options with your insurance agent.
5. Rebuilding and Repair Costs
What It Is: In the event of damage to a secondary structure, your insurance policy will cover the costs to repair or rebuild the structure, subject to the coverage limit and your Deductible.
Example:
Rebuilding After Fire: If a fire destroys your Gazebo, and the cost to rebuild it is $8,000, your insurance would cover this amount, minus your deductible, provided it falls within your coverage limit. If your deductible is $1,000, you would receive $7,000 from your insurance to cover the rebuilding costs.
Action Step: Understand your deductible and how it applies to claims on secondary structures. Ensure that you have funds available to cover the deductible in the event of a Claim.
Loti can help:
We provide a complete suite of tools to help you track expenses and manage your claims. We even make your claims incredibly easy to understand for your insurance carrier to ease communications and help turnaround times.
How Secondary Structures Coverage Works in Different Scenarios
Scenario 1: Windstorm Damage to a Detached Garage
A severe windstorm blows through your neighborhood, causing a large tree branch to crash through the roof of your detached garage. The damage is significant, with repair costs estimated at $15,000. Your policy’s dwelling coverage is $250,000, making your Secondary Structures coverage limit $25,000 (10% of the dwelling coverage).
Outcome: Since the repair costs are within the $25,000 limit of your Secondary Structures coverage, your insurance would pay for the repairs, minus your deductible. If your deductible is $2,000, you would receive $13,000 from your insurance to cover the repairs.
Scenario 2: Vandalism of a Fence
Vandals break several sections of your wooden fence during the night, causing $3,000 worth of damage. Your Secondary Structures coverage limit is $20,000, as it is 10% of your $200,000 dwelling coverage.
Outcome: Your insurance would cover the cost of repairing or replacing the damaged sections of the fence, minus your deductible. If your deductible is $500, you would receive $2,500 from your insurance.
Scenario 3: Flood Damage to a Shed
A nearby river overflows during a heavy rainstorm, flooding your property and causing significant damage to your shed. The repair costs are estimated at $5,000. However, your standard homeowners insurance policy does not include flood coverage.
Outcome: Because flood damage is excluded from your standard homeowners insurance policy, the damage to your shed would not be covered unless you have a separate flood insurance policy. Without flood insurance, you would be responsible for the full cost of repairs.
Wrap-Up
Secondary Structures coverage is an essential part of your homeowners insurance policy, providing financial protection for the various structures on your property that are not attached to your main home. By understanding the coverage limits, covered perils, exclusions, and how different structures are covered, you can ensure that your entire property is adequately protected.
Regularly review your policy and make adjustments as needed, particularly if you add new structures or if construction costs rise in your area. If you have any questions or need to update your coverage, don’t hesitate to contact your insurance agent for guidance.