Property structures insurance is a type of insurance that covers structures on your property that are not the main dwelling, like fences, sheds, and mailboxes. This policy offers great protection if you have outbuildings or need extra coverage.

The perils covered by property structures insurance are similar to the ones covered by a homeowners policy (wind, theft, etc). Most homeowners policies already include a property structures coverage—but the cap is usually 10% of the total policy limit. If that’s not enough for you, you can purchase extra coverage.

Confused? Keep reading! This article will provide a basic explanation of property structures insurance, what it covers, how much it covers, whether you need it, and how to find a good policy.

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What is property structures insurance?

Property structures insurance is also known as Coverage B or “other structures” coverage.

It insures structures that are not attached to your main dwelling. This policy may apply to detached garages, sheds, fences, gazebos, mailboxes, walkways, and in-ground swimming pools.

A deck would not be covered by property structures insurance, since it is attached to your primary house. Airbnbs and backyard home offices may not be covered either. You may be able to add a specific endorsement to your policy for these types of structures.

Pro Tip If you have a pool, check your policy carefully. Above-ground pools are sometimes considered personal property. In-ground pools are sometimes covered by dwelling coverage and not property structures.

MORE: Does home insurance cover flooded basements?

What does it cover?

Property structures insurance covers the cost of damage done to your detached structures (not the things inside, which are covered by personal property coverage).

The policy is intended to cover the cost to repair, replace or rebuild detached structures on your property that have been damaged by a covered peril. As with other insurance policies, only specific perils are covered, such as theft, wind, fire, and more.

Here are examples of incidents that would likely be covered:

Your garden shed is blown over in a windstorm

Your fence is destroyed by a neighbor’s car

Your gazebo is struck by lightning

Your mailbox is vandalized

There are some circumstances that are not eligible for coverage, however. Excluded perils include floods, earthquakes, pests, wear and tear, and theft from vacant or under construction properties. Homeowner negligence is excluded, too.

How much does it cover?

This type of insurance policy usually comes with a percentage limit for damages. In a standard homeowners policy, other structures coverage may only be 10% of your overall dwelling coverage.

Here’s an example.

Let’s say your total policy limit is $200,000. Your limit of liability for other structures is 10%, or $20,000. Imagine a windstorm blows a big tree down onto your detached garage and fence. Contractors estimate the repair costs to be $35,000.

In the example above, even though the projected repair cost is $35,000, you only have coverage for $20,000—which means that you’ll have to pay the remaining $15,000 out of pocket.

This is why it’s so important to check your policy carefully and adjust it annually. You may need to tweak your limits to ensure you have enough coverage to actually rebuild damaged property.

Finally, let’s talk about how much money you will actually receive.

Your payout amount is calculated using either ACV or replacement cost depending on your policy. If you have an ACV (actual cash value) policy, you will receive a check for the value of the damaged structure minus depreciation. With a replacement cost policy, you’ll get paid as if the damaged structure was brand new.

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Do I need it?

Technically no, you do not need property structures insurance. But you should consider getting this coverage if you have detached structures on your property.

To determine whether or not you need it, answer these questions:

Do I have detached structures on my property?

Does my homeowners policy already include Coverage B?

You may already have property structures insurance as part of your homeowners policy. Start by reading your existing policy and find the Coverage B section for detached structures. Find out if there is a percentage limit for coverage.

How much would it cost to rebuild all detached structures on my property?

Is my Coverage B limit enough to cover my detached structures?

If you do not have this type of coverage—or you need a higher limit—you can get property structures insurance as a separate policy.

You should also consider coverage for specific perils that are excluded from a standard policy. For instance, wildfires, floods, and earthquakes are typically not covered. If these events are likely in your area, it may be prudent to take out a separate policy.

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