QUICK ANSWER
Homeowners must increase their Coverage B limit (Other Structures) beyond the typical 10% of dwelling coverage, as this section covers detached structures (garages, fences, sheds) but frequently leaves homeowners underinsured and excludes structures used for business or housing personal contents (which fall under Coverage C)
When most people look at their homeowners insurance, they focus on the main house. This is Coverage A. But a huge chunk of your property’s value might be sitting in your backyard. Sheds, fences, detached garages, and even in-ground pools are handled under a different section: Coverage B.
According to the experts at Cheap Insurance, this is where many homeowners face a massive coverage gap. Most homeowners insurance policies only give you 10% of your main dwelling limit for these “other structures.” If your house is insured for $400,000, you only have $40,000 to replace everything else. In 2026, $40,000 barely covers a high-end detached garage, let alone the fence and the pool house.
What Counts as an “Other Structure”?
To fall under Coverage B, a structure must be separated from your house by “clear space.” If it is connected by just a fence or a utility line, it’s still usually considered detached.
Common items covered here:
- Detached garages or carports.
- Storage sheds and workshops.
- Wood or vinyl fencing.
- Gazebos and pergolas.
- In-ground pools (depending on your specific policy language).
- Guest houses or “casitas.”
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The Pitfalls of Coverage B
You need to watch out for a few specific exclusions in a standard HO-3 insurance policy.
- The Business Rule: If you use your detached garage as a commercial woodshop or rent out your guest house on a short-term rental app, your claim might be denied. Business activities usually require a separate rider.
- Maintenance: Insurance won’t pay for a fence that rotted over ten years or a shed that has a termite infestation. These are maintenance issues, not accidents.
- Structure vs. Stuff: Coverage B pays for the walls and the roof. It does not pay for the tools or the lawnmower inside. Those items fall under Coverage C (Personal Property).
Regional Risks and State Regulations
Rebuilding a detached structure is not the same in every state. Local laws and weather patterns change the math.
- California: Under AB 1 (effective 2026), insurers must now regularly update how they reward building-hardening measures. If you have a detached ADU or garage, using fire-resistant siding or clearing 30 feet of defensible space can help you keep your coverage in high-risk wildfire zones.
- Florida: You can get significant credits if your detached structures meet specific building standards. Installing a hurricane-rated garage door or using specific roof-to-wall clips can lower your windstorm premium by as much as 60% or more.
- Texas: In coastal “Tier 1” counties, you often need a separate policy from the Texas Windstorm Insurance Association (TWIA) to cover wind and hail for your gazebo or detached workshop.
- Colorado: Hail is the number one driver of insurance costs here. In 2026, many carriers have moved to “percentage deductibles” for wind and hail. If your $10,000 fence is destroyed, a 2% deductible on a $500,000 house means you might be paying the first $10,000 out of pocket.
- New York: Labor costs in 2026 remain some of the highest in the country. A standard two-car detached garage in the New York City area can easily cost $45,000 to $70,000 to rebuild, making the 10% automatic limit a major risk for homeowners.
Checking Your Limits
Take a walk around your yard. Add up the cost of your fence, your shed, and your garage. If that number is higher than 10% of your house’s value, you should call your agent. Increasing your Coverage B limit is usually very affordable, and it’s a lot cheaper than paying to rebuild a garage out of your own pocket.
Frequently Asked Questions About Insuring Detached Structures
Are decks and fences covered by a standard homeowners insurance policy?
Most homeowners insurance policies provide coverage for decks and fences under the other structures portion of the policy. This coverage typically applies to damage caused by covered events such as storms, fire, or vandalism, though limits are often lower than the main dwelling coverage.
How does insurance coverage work for detached garages and sheds?
Detached garages and sheds are usually classified as other structures and covered separately from the main house. Coverage limits are often set as a percentage of the dwelling coverage, which means larger or upgraded structures may require higher limits to be fully protected.
Should you update your insurance after adding outdoor structures?
Adding a deck, fence, or detached building can increase the value of your property and may require higher coverage limits. Updating your policy helps ensure these improvements are properly insured and reduces the risk of out of pocket costs after a loss.
