Can I Remove Other Structures Coverage?
Understand and tailor your homeowners insurance. Evaluate if "other structures coverage" suits your needs and learn how to modify your policy effectively.
Homeowners insurance provides financial protection for one of the most significant personal investments, safeguarding a dwelling and its contents. A standard homeowners policy includes “other structures coverage” for additional elements on the property. This article explores this coverage and considerations for modifying it to align with individual needs.
Understanding Other Structures Coverage
Other structures coverage protects buildings and features on a property not physically attached to the main dwelling. These include detached garages, sheds, fences, gazebos, guesthouses, swimming pools, or private driveways. This coverage extends to damage from perils such as fire, windstorms, hail, and vandalism, mirroring protections for the primary residence.
The coverage limit for other structures is commonly 10% to 20% of the dwelling coverage limit. For instance, a home insured for $300,000 might have $30,000 allotted for other structures. This coverage applies to the structure itself, not to personal belongings stored inside, which typically fall under personal property coverage.
Considerations for Modifying Coverage
Evaluating other structures coverage involves assessing a property’s current state and financial implications. Homeowners should determine if any detached structures exist. If there are no sheds, fences, or other independent buildings, the standard inclusion of this coverage may not be necessary.
For properties with existing detached structures, consider their current value. Assess if the allocated coverage limit is sufficient for replacement or repair, or if it exceeds their actual worth. This assessment helps determine if the cost of maintaining current coverage is proportionate to the potential benefit.
A significant factor in modifying this coverage is the presence of a mortgage. Most mortgage lenders require homeowners to maintain a certain level of insurance, which typically includes other structures coverage. Reducing or removing this coverage could violate loan agreement terms, as lenders aim to protect their financial interest in the entire property.
The decision balances potential premium savings against financial risk. While reducing or removing coverage might lower insurance premiums, it transfers full financial responsibility for damage or loss to the homeowner. Some policies include this coverage automatically, and its removal might not lead to substantial savings.
Adjusting Your Homeowners Policy
To adjust other structures coverage, contact your insurance provider or a licensed insurance agent. This direct communication is essential to discuss available options and understand the implications of any changes.
Homeowners should be prepared to provide details about their existing policy and explain their reasons for seeking a modification. This might include information about the presence or absence of specific detached structures on the property, or their estimated replacement values. The insurance representative will then outline potential adjustments, such as altering coverage limits or, if permissible, removing the coverage entirely.
The insurer will typically provide a revised premium quote reflecting any proposed changes. Homeowners should carefully review these adjustments and understand how they impact both the coverage and the cost. Upon agreeing to any modifications, requesting written confirmation of the policy changes is a prudent step.
A thorough review of the updated policy documents is advisable once they are issued. This ensures that all agreed-upon changes to the other structures coverage are accurately reflected in the official policy. This process helps confirm that the insurance coverage aligns with the homeowner’s current needs and financial objectives.