Getting Coverage Right for Your Deck, Pool, Other Structures

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One often overlooked feature of a homeowner’s insurance policy is the “other structures” coverage, which is separate from the part of the policy that covers your residence.

The coverage for damage is often significantly lower than for the rest of your home, and claims are handled differently for these structures, which includes decks, pools and fences.

It’s important that you look at the values carefully in your homeowner’s policies to ensure that your limits are enough to cover any damages should a covered event occur.

How other structures are covered

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 insurer 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.

Other structures on your property include things like:

  • Gazebos
  • Decks
  • Pools
  • Outside kitchens
  • Sheds
  • Man caves and separate quarters
  • Fences.

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 $700,000 coverage on the house, it will provide $70,000 for other structures.

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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 and you could be left holding the bag for the difference.

Other features of structures coverage include:

Water and ice — The ISO form does not cover damage to a fence, patio, pavement, swimming pool, pier, wharf or dock that results when water or ice freezes, thaws, puts pressure on or puts too much weight on them.

Uncovered events — Just like the house and the contents inside it, these structures are almost never covered for losses caused by earth movement, floods, power failure, neglect or extra costs from the enforcement of updated building codes.

Different claim amount calculation — The ISO form permits the insurance company, when one of these structures that is not a building is damaged, to pay the lower of:

  • The cost to repair or replace it.
  • The structure’s actual cash value.

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 $3,330. The insurer would compare that to the cost of repair. If repairing it would cost more, the company would pay the lower amount.

What you can do

Find out what the cost would be to replace your other structures. Compare that figure to the amount of other-structures insurance your policy provides. Your current policy may provide enough, but find out whether the carrier will depreciate the value of a deck or similar property.

The ISO form is the standard, but insurers seldom use it unchanged. Also, insurance companies’ policies are not identical. It pays to compare alternatives. Some carriers might offer larger amounts of coverage on other structures, and some policies might not permit the company to depreciate the property.

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.

We can offer you coverage options, so give us a call.

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