Outbuilding insurance is a key area that is usually overlooked by most homeowners because they believe their regular insurance should cover their outbuildings. Depending on the type of insurance coverage you get for your home, various factors could determine the household insurance restrictions on outbuildings on your property. It is dangerous to assume you have coverage when you do not because you could be thrown into financial difficulty if you encounter a loss and have to pay out of pocket to have your repairs done.
Here are a few important aspects of outbuilding insurance that you must be aware of.
1. Use of Building
Some insurers will not cover some structures based on what they are being used for. You need to consider what purpose your outbuilding serves, or you may need to get separate insurance for it. For example, some insurers will not cover buildings they believe are being used for agricultural purposes. Furthermore, if you are renting your outbuilding to a third-party, some insurers view this as an extra liability and will not cover the building based on this. Any use of your outbuilding that the insurers view as an extra liability on your home insurance will require you to get a separate plan for your outbuilding.
2. Size of the Building
The size of your outbuilding will determine how much of your insurance can cover it. Some insurers set aside 10% of the total insurance coverage to cater to external structures and outbuildings (also known as Coverage A). Simply put, if the total value of your insurance is $500,000, some insurers may set aside $50,000 of the policy to cater for outbuildings. This covers a variety of building types, including sheds, shops, a pool house, or a detached garage. If your policy does not have this coverage for external buildings or if the amount is not enough to cover the value of your outbuildings, you may need to secure and insure your shed or other buildings with a separate policy.
3. Condition of the building
The condition of your outbuilding is important to your homeowners insurance. The law does not allow insurance companies to exclude private outbuilding structures from a policy; therefore, they are always wary of giving insurance coverage to houses with outbuildings in poor conditions. A poorly maintained outbuilding is a serious liability for an insurance company because they will be required to pay for the repair or replacement of the building based on the policy. If you hope to get an insurance policy for your home, you need to fix any damages to your outbuilding.
Outbuildings are an extension of your home, and therefore they need to be protected in case of damages. If your insurance policy does not cover outbuildings, it could lead to liabilities and financial obligations if disaster strikes. If you want to know more about how you can properly protect your outbuildings with decent insurance coverage, contact us at Bell Black today! We serve all insurance needs for those in Idaho Falls, Island Park, Driggs, Victor, Swan Valley, Ashton, and the neighboring communities in Idaho, as well as Jackson and Star Valley in Wyoming.