Coverage B: Don’t be fenced in
There are six parts to a homeowner’s insurance policy. Most people understand that Coverage A insures against damage to the structure itself. Coverage B offers insurance protection for detached structures, such as a garage, storage shed, swimming pool and the backyard fence. For no extra charge, almost every policy extends coverage to other structures on the property by 10 percent of the amount for which the home is insured. Is the 10 percent sufficient for your situation?
With a home insured for $200,000, Coverage B would mean there is up to $20,000 to replace or repair a detached garage, for example. And, in many instances that may be enough. But what if your detached garage was big enough to hold three cars and you used a section to refurbish fine antiques? What if there was a game room, aka man cave, above the garage with high-end electronics? That $20,000 may not be enough coverage in those situations. To be fully insured, additional coverage should be purchased.
Many insurers offer options for increasing “Other Structures” coverage, ranging from 15 percent to 100 percent more. If there is a separate guest house on the property, increasing Coverage B makes sense. It may even be a good idea to consider it if the yard is wrapped with a high-end vinyl fence. The best way to know the right amount of coverage for detached structures is to do a home inventory.