Are Sheds Covered by Home Insurance?

Homeowners insurance provides financial protection for a homeowner’s property. This coverage safeguards against unexpected events that can cause damage or loss to the dwelling and its associated structures. Understanding a policy’s facets clarifies how it protects your property from covered perils.

Understanding Other Structures Coverage

Sheds, as detached structures on a property, are typically covered under a standard homeowners insurance policy through “Other Structures” coverage, or Coverage B. This policy section protects buildings not physically connected to the main dwelling, such as detached garages, gazebos, and fences. Homeowners insurance policies automatically include this coverage.

The coverage limit for other structures is generally set as a percentage of the dwelling coverage (Coverage A), which is the insurance amount on your main house. Typically, this percentage is around 10% of the dwelling’s insured value. For instance, if your home is insured for $300,000, your shed and other detached structures would usually have up to $30,000 in coverage. This coverage protects against common perils like fire, windstorm, hail, and vandalism, similar to how the main dwelling is covered.

Coverage for Shed Contents

While “Other Structures” coverage protects the shed itself, items stored inside are covered under Personal Property coverage, or Coverage C. This coverage extends to belongings whether located within the main house or in other structures on the property. Common items found in sheds, such as lawnmowers, tools, and garden equipment, typically fall under this protection.

The limit for personal property coverage is usually a percentage of your dwelling coverage, often ranging from 50% to 70%. While Coverage B covers the physical structure of the shed, Coverage C is for its contents. However, some high-value items within the shed may be subject to sub-limits, meaning the policy might only pay up to a certain amount for specific categories of items, regardless of their actual value.

Common Coverage Limitations and Exclusions

Certain events and situations are typically not covered for sheds, much like the main dwelling. Standard policies generally exclude damage from specific natural disasters such as floods or earthquakes, which usually require separate policies or endorsements. Damage resulting from a lack of maintenance, wear and tear, or pest infestations are also commonly excluded.

The “business use” clause is a common exclusion. If a shed is used for commercial activities, even partially, it may not be covered under a standard personal homeowners policy. For example, if a shed is converted into a workshop for a business that generates income, any damage to the structure or its contents might be denied coverage due to this exclusion. Homeowners should review their policy details to understand these limitations.

Options for Additional Coverage

Homeowners can enhance their coverage if standard limits for their shed or its contents are insufficient. If the value of the shed or other detached structures exceeds the typical 10% of dwelling coverage, homeowners can increase the “Other Structures” coverage limit through an endorsement or rider. This adjustment ensures adequate funds are available for repair or replacement in case of significant damage.

For valuable items stored in the shed that exceed standard personal property sub-limits, such as expensive tools or specialized equipment, homeowners can consider “scheduled personal property” coverage. This endorsement allows specific high-value items to be listed and insured for their appraised value, often providing broader protection and sometimes even waiving the deductible. If a shed is primarily used for business purposes, a separate commercial insurance policy would be necessary to ensure proper coverage for the structure and its business-related contents.